FreshBooks banner ad

7 Mistakes Noob Crypto Traders Make and How to Avoid Them

Crypto trading is the order of the day, as many traditional investors have made the move towards virtual currency in view of the massive gains it offers. But a lot of newcomers make simple mistakes which might mean losing a lot of money.

For anyone new to cryptocurrency trading, here are the 7 biggest mistakes to avoid:

1. Ignoring to do research

Before you start trading cryptocurrency, understand the importance of your own research. Just blindly investing in popular coins or solely relying on ‘expert’ advice can land you in big trouble. There are paid promoters on the web and you could lose money if you believe them to be genuine.

Do not make investments based only on the hype around crypto prices and their movement.

Cryptocurrencies

2. Exiting and selling at the wrong time

Some newbies have no clue when to cash in their profits and exit. They stick with the market as long as they can, only to lose their previous gains. Selling when the price seems high enough is also a wrong approach. If you sell when the price seems high enough, you might regret later when it soars again. Buying cheap doesn’t always mean that the price will go up. It could easily drop and you might lose a large investment. The fluctuations in crypto prices are inevitable.

Don’t get manipulated by online hype, but give it some time to see a price surge.

3. Playing favorites with specific coins

Even the top cryptocurrency, Bitcoin sees significant price dips. Whatever advice you may heed to, remember that it is not realistic for any single coin to see a consistent rise. Price swings are unpredictable and it is not sensible to put all your investment into one coin. Sometimes, it may take months for a coin to do well in the crypto space.

Instead of getting emotionally attached to any coin, invest in multiple cryptocurrencies.

4. Not managing your expectations

As someone who is just entering Crypto trade, you must be realistic with your expectations. Your investment might take some time to earn gains on par with Bitcoin or Ethereum. Investing in a coin which is on its way to becoming the next top cryptocurrency is a wise move. But, if you expect a 2000% profit, then you will be majorly disappointed. For example, coins like Ripple are regulated to certain prices.

5. Lacking technical and analytical skills

You must be able to analyse the rise in crypto prices of your investment. You don’t need to have in-depth technical knowledge, but it is essential to understand the patterns in this highly speculated market. Sometimes, even the crypto charts fail, so it is crucial to learn about support zones, trend lines and resistance levels to improve your trading significantly.

Find a good learning community like Crypto Twitter, Cent, Decred Slack and /r/ethtrader.

6. Not following current events

If you are in crypto trading for profits, then technical analysis alone is not sufficient. You need to follow the current events in the market. Get the top cryptocurrency news from an authentic source. However, try not to be overwhelmed and stop grasping at every piece of information thrown at you.

Exchanging dollar with cryptocurrency

7. Neglecting to keep records and double-checking tokens before sending funds

Make hard copies of private keys, codes and two-factor authentication. Store them in a secure location. If your wallet service crashes or it is compromised, you can restore it onto another computer. Before sending funds to a crypto-wallet at the exchange, check if it matches with the token you are about to send.

This technical mistake can be fixed easily, but it is better to double-check prior to sending. You can send many tokens to MyEtherWallet if it is on ERC20, but not on exchange wallet.

Conclusion

These are a few major things you need to know before you put all your hard-earned money into crypto trading. You must have immense patience to reap the rewards. Even if you are trading short term, ensure you always have an end-game for each crypto investment.

About author

Ivan Widjaya
Ivan Widjaya 3498 posts

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.

Funding Note

You might also like

Tips

10 Reasons Why Recession is Good for You

Economy today causes most of us headaches – not only in the US but all over the world. In my country, the economy condition is quite severe – prices soars,

Tips

The Power of Being Nice

People easily irritated. Especially in big city living, patience is divine. Patience usually relates to being nice. In any part of the world, small city or sub-urban people always beat

Tips

Why You Should Stop Worrying About Google PageRank and Start Producing Great Content

Okay – criticise me on this. I think PageRank is bad for your health. Come on now. Every now and then you and I are always worrying about your PageRank