As a new type of digital asset transaction, bitcoin has been sought after by many people. However, the following seven mistakes often occur in actual transactions. As traders, we should avoid them.

1. set up a reasonable trading plan

When you trade bitcoin, you should set up a trading rule for yourself and buy, hold and sell as planned. You should adhere to the plan, keep your relevant transaction and thinking log, and do not deviate from it.

The trading plan can maximize your ability to make decisions without hesitation and without greed. They allow you to benefit from probability statistics because you only make transactions that meet the predetermined set-up rules.

2. no fomo

Fomo stands for “fear of missing”. Fomo may cause you to make poor trading decisions. New bitcoin traders often see reverse operations and tend to buy when prices rise, but lose money when trends retreat. Instead, experienced traders buy when others are worried about a fall and sell at a higher price during the bullish peak.

The bitcoin market is a 365 day real-time transaction, so you can always wait for the right time to trade. The market will not always move in the same direction, so please do not use fomo.

3. do not use too many levers

Trading is a way to make a lot of money in a short time, but you can also easily lose it. If you’re not sure what you’re doing, don’t use too much leverage. Some exchanges offer leveraged trading up to 100 times, but if you are short of funds or trading volume exceeds the range of losses, you may get into trouble very quickly.

Your trading volume should not exceed 2%-5% of the total amount of the account. At the same time, if you are a new trader, you should not use more than 3-5 times the leverage.

4. don’t make wrong decisions out of fear or greed

If you feel uneasy or greedy about the status of the transaction, it indicates that you may be trading a loss you can’t afford, and this surge of emotion may lead you to make unreasonable decisions.

The reason why we have a trading plan is that our emotions will not have a negative impact on unexpected price fluctuations. If you are afraid or greedy, you should warn yourself if you have done something wrong.

5. paying attention to the market around the clock will not make you rich

If you keep staring at the computer screen to watch the trend of bitcoin, you may feel stressed, and stress is not good for you or the people around you. Similarly, it will not earn you extra income.

It’s better to take a walk to breathe fresh air and spend time with relatives. If you set a stop loss, don’t use too much leverage, stick to the trading plan, and don’t take risks to bear unbearable losses, you can relax. Trading long-term price trends, rather than entangled in short-term fluctuations.

6. be patient

The market usually enters the non trading area, and sideways consolidation does not provide too many opportunities for profitable trading. You can sit and wait for the perfect breakthrough, and then proceed to the next transaction.

Do not over trade, and do not trade in order to trade under sub optimal market conditions. This may lead to bad situations, such as untimely trade fairs, which gradually make you lose profits.

7. trading with trends

Many inexperienced traders fail to realize that when the market is a certain trend, contrarian trading is very risky. Experienced volatility traders do not have time to set their exit and entry times to make short-term profits from price fluctuations, but new traders should not try to do so.

Traders should determine whether the market is up, down or sideways, and trade according to the market momentum. It is not a good choice to fight against the market trend.

Responsible editor: CT

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