Let’s be honest, understanding and trading crypto can quite difficult. Today we are going to speak about some mistakes that beginners and even experienced trader make 😎⠀
Mistake 1️⃣ When you trade without a stop loss.
Beginning traders usually trade emotionally, which manifests in refusing to accept their losses. The most important skill that a trader must have is the ability to accept a loss and move on to the next trade. Failure to do this is the main reason traders lose money. You have to set a stop loss, and do not move it when the trade goes against you.
Mistake 2️⃣ When you trade worthless cryptocurrencies.
Until 2016, BTC was the only crypto in town. Today, there are more than 2,000 cryptocurrencies. Some of them are very promising, but some are just worthless. You have to be careful so that you do not fall victim to the pump and dump common to these altcoins.
Mistake 3️⃣ When you don’t understand the difference.
Keep in mind that investing and trading are different things! Investors average down positions in fundamentally sound assets with a long time horizon. Traders have defined levels of risk and invalidation for their trades. When their stop loss hits, the trade has been invalidated and they should move on to another asset.
Mistake 4️⃣ When you fail to keep a trading journal.
Successful traders have a plan. The only way to do this is by recording the details of a trade. This is the best way to learn and avoid repeating trading mistakes. Keep a journal, where you will put all the information about the prices, charts and even your emotional state, and refer back to it.
Mistake 5️⃣ When you risk more than you can afford to lose.
In crypto trading, people are drawn to the idea of earning a lot of money by being in the right place at the right time. As a result, they go all-in on crypto, risking everything on what can be a lottery ticket, especially if we speak about some unknown currencies.
Have you ever made any of these mistakes? 🤔