With the development of cryptocurrency becoming stronger and stronger, people will naturally be attracted by its growing popularity. Why not? It provides a very profitable transaction in terms of profit and privacy. In 2017, the value of bitcoin reached US $23762 million, a record high.
The cryptocurrency world can provide many things. The cryptocurrency market will experience significant changes throughout the day. Compared with the stock and foreign exchange markets, it changes very fast. Because of its volatility, you can make extraordinary profits in a very short time. Similarly, you may lose and lose in a few days. It is observed that 96% of traders lost and 4% won. So, how is 4% achieved? Let’s focus on what mistakes 4% of traders should avoid.
Here are the mistakes that novices, even the most professional novices in the industry, often make. You need to work hard to learn this way of trading to prevent mistakes, which may endanger your investment.
Not keeping pace with the times and blindly following the trend:
Knowledge (obtained from research and applied to the formulation of strategies) is the key to the success of investment. Therefore, keep the information informed at all times. Do not rely solely on or follow any information on social media platforms without cross validation.
Pay close attention to the news and do your homework. This is a fairly new market, so novices tend to blindly listen to the opinions of “experts” from companies such as slack, medium and twitter, who guide people when to buy or sell.
Usually, these celebrities are paid to promote specific tokens.
It’s good to listen to others’ ideas, but it’s best to verify facts, data, browse weekly newsletters, track your investment trends, and then trade cryptocurrencies. If necessary, an investment group can be formed to carry out trade and investment and do a good job in research.
Do not know how to use various market indicators:
There are indicators, such as RSI, MACD, SMAS and EMAS, which can be referred to rather than lost in the crowd. Many traders do not spend enough time observing “price movements” and then applying indicators, which is wrong. Too many indicators may cause problems. But you have to be selective, because the indicators may overlap.
Lack of strategy and over Trading:
Many people tend to enter encryption or transaction. Affected by its mystery, they do not formulate appropriate strategies in the transaction process. As a result, they are too eager to trade. If you want to make money, you should avoid over trading. You should avoid the risk of loss, otherwise your portfolio may have problems. Make a few transactions a week, which will get a better return. Plan well and don’t set unrealistic goals. For example, don’t force yourself to make a certain number of transactions every day. This will inevitably lead to wrong judgment and put you in unnecessary danger.
Stick to the original plan without analyzing previous performance:
Stay alert. Never be complacent about success. Therefore, always reassess your trading strategy. Review your past performance and find out what you did wrong or what strategies worked. Don’t repeat previous mistakes.
Continue to test your strategy. Paper trading, an online trading platform, allows you to test strategies without spending a penny.
Against the trend:
This is a very dangerous thing. Many experienced traders tend to profit by not following the general trend, but this is absolutely undesirable for novices, especially when the market is in a downward trend. Don’t gamble too long; Wait carefully for opportunities between peaks.
Stop loss close to initial purchase price:
Bitcoin and cryptocurrency are highly unstable. Therefore, closing the stop loss point may lead to a loss. The move deprived traders of an opportunity to face a slight decline before a sharp rise. When setting stop loss, the resistance line must be confirmed.
Use a stop loss in every important trade because it will protect you from a sudden collapse.
Enter the pump and dump organization:
These organizations claim that before selling bitcoin, they will coordinate actions to manipulate the price of digital assets by increasing purchases. But in reality, these organizations often make up stories and posts to show their success. Stay away from these groups. When you meet such a group, be sure to check the trading volume. Remember, any 24-hour trading volume below $1 million is a red flag.
Selling tokens at the highest price:
Don’t sell tokens during rush hours. Hold, not sell.
You never know how much a particular token can grow. For example, companies that bought ripple (XRP) and Tron (TRX) stocks at their peak in 2017 suffered losses in 2018.
Despite the loss of jobs, it continues to increase:
Never add value while losing a position. Although many people suggest buying falling stocks, it is best not to indulge when the risk is high because of personal bias.
For example, if you did buy bitcoin when it fell from $20000 to a low of $5800, you would indeed find yourself in serious danger. So don’t buy or sell emotionally. Explain your behavior reasonably based on the evidence.
Although this may seem insignificant at first, it highlights many of the fates of encrypted transactions. People finally set a portfolio multiplication goal that is theoretically impossible to achieve. Don’t expect your portfolio to double in a month. Keep your money within your reach. Even if you are affected by high returns, don’t invest too much emotionally.
People are not sages, no one can make mistakes. Understand and accept this ancient, time tested fact: mistakes are a part of life, because we have to learn from them.
Therefore, instead of making mistakes carefully, it is wisest to learn from them (whether they are mistakes made by others or yourself) and take corresponding actions.
Pay attention to your own trends when investing. Listen to your intuition. As long as you absorb the information around you, keep good knowledge and equipment, and trust your intuition, you will win.
Responsible editor: CT