Whereas crypto is becoming a gigantic space day by day, crypto holders are still habituated to some top common mistakes. The repetition of these mistakes works as an obstacle to this growth of the industry. We have talked about some serious crypto beginners’ mistakes and keep updating you on other mistakes down the road.
Some years back, cryptocurrency was a topic of whimsical, but now, it has proved itself as a strong alternative to the existing economy. With the growth of this space, many people are getting highly interested in it and involving in the space day by day. Their participation in this field is carrying a great demand for the cryptocurrency market. Speculation in the crypto market has increased several folds over the last few years.
We are now going to talk about some frequent mistakes that newcomers make. Some of the best known-mistakes are-
1: Keeping Coins in Online Wallets
Storing coins in an online wallet is a highly-practiced habit in cryptocurrency holders, but it refers to their high negligence, ignorance, and laziness. Online wallets are very much prone to hacking and such incidents are common in this space. So, coin holders should invest in an offline wallet, and after the purchase is done, they should move those coins to that wallet.
2: Losing of keys
The security of blockchain has been developed with high encryption and a person belongs to the ownership of a cryptocurrency as long as he has possessions on the keys. So, once you lose the keys, there is no way of recovery indeed which is very unlikely to password or pin system. As newbies have little or no knowledge over the issue, they frequently make that mistake.
3: Fat-Finger Error
To shortly say, fat-finger error is a human error that occurs when the wrong key is pressed on a computer or smartphone keyboard. It causes a huge destruction as every decimal is a place value that has considerable ramification in fiat currency. Thinking dealing in BTC, newbies, by mistake, sometimes enter the wrong amount while entering a trade in mBTC. Copy-pasting is a good option to be adopted to get rid of any wrong entry. To avoid certain mistakes, our advice is to keep updating your information and knowledge.
4: Not keeping hard copies of important information
One should print out one’s word document, which carries addresses, keys and other pertinent crypto information, for extra security. It keeps a person out of worry providing that the digital records get lost owing to any crash or sudden failure.
Till now, we have talked about so many mistakes that crypto-users usually commit. Furthermore, there are some more mistakes that are also commonly seen being made by crypto users.
Let’s talk about these mistakes one by one;
Starting with real money before paper trading
Do you know- what is the most quintessential aspect of crypto trading? Definitely, using paper trading before putting the real money is the answer. It helps to enlarge trading knowledge even though this part is boring to many of you. But, the considerable part is that growing skill is not the prime target of many beginners rather gambling is.
So, if wastage of time grows skill and brings money; then, why won’t you waste your time in paper trading? So, prepare yourself before jumping onto the real game.
Averse to using stop loss
No analysis can give 100% assurance to where the market will go rather than that analysis can give a nice prediction. Risk management is absent in your trading without the stop loss. Stop-loss guards against a huge loss, and that’s why many best crypto exchanges allow using a stop loss.
So, never make this mistake for your own sake.
Paying high brokerage fees
It’s a common complaint from many profit-takers that they cannot enjoy their full profit because of high brokerage fees. In this regard, we have only one suggestion for you that is, use such a broker that charges low fees and has high volume and liquidity.
No Fundamental Analysis
Trading without doing any fundamental analysis leads to a great loss after a certain time. But during the initial trading time, the impact of trading without fundamental analysis remains invisible. Every trader probably has a different way of trading, but fundamental analysis must be done in all the cases. Doing fundamental analysis will shave off huge losses at a certain time.
Trading based on Pump/dump calls
It is one of the major points that need to be discussed. There is a common tendency among beginners to buy signals from different Telegram/Discord groups. But, it is commonly seen in a majority of the cases that when thousands of traders trade following the same signal, this signal carries misfortune to them.
How worse these pump/dump schemes are for beginners cannot be described in a word. Such practice keeps beginners away from the intention to develop basic trading skills. It impedes being a pro-trader. Change in any trading situation can lead to a massive loss for those who follow pump/dump schemes.
Having no trading plan
Trading without a plan is like walking in the darkness. A trading plan means- finding out the entry and exit point, leverage amount, and backup plans. Beginners cannot make a plan for trading, and they don’t even try to learn how to make a proper plan. The thing they are habituated to do is to take risks in the expectation of getting higher profit.
You are probably laughing hearing about the revenge trade. Whatever, it is very common among verdant traders. Trade they take on the basis of emotion and high expectation ends up getting into revenge trade maximum time. This revenge trading also brings no fruition to the traders rather than that it vanishes the account balance day by day. A proper plan and risk management always pay off a better return. And the crypto portfolio remains safe and secure.
Trading many pairs
The intention of trading many pairs comes from the greed of your eyes. An expert trader never goes for trading many pairs at the same time. However, he has only one pair to trade, and he never goes for another trade until he gets outs of the previous trade. Trading many pairs at the same time lessens the equity indeed. However, when all the trades end in smoke, it lessens the account balance to a high extent.
Not maintaining a trading journal
Many traders are very much averse to maintaining a trading journal. It is because they don’t know that a trading journal helps to improve trading strategy over time. You can keep record using excel or any paper journal, and you are flexible to do this.
What is the objective of writing this article? The purpose is to make you aware of frequent mistakes that crypto users commit, and we want you not to cling to these mistakes.
Crypto users learn about these mistakes with time, but we are mentioning these mistakes to you so that it saves your time for learning about these mistakes. We are warning you against such mistakes and inspiring you to improvise. We hope our writing will help you in attaining your goal quickly, minimizing your losses.