Mistake № 1. Buying on the top (loss of profit syndrome).
A huge number of people enter the market at that moment when it's time to get out of it, regardless of the scale in which they trade. If the coin has recently shown X5-X10, it makes sense to look the other way, to look for a fresh product - coins that have successfully completed the ICO, have collected HardCap, but have not yet received their Xs.
To avoid this situation, the following rules should be adhered to:
1. Never buy when volume increases if the price is at the top of the market and there are no valid reasons for further price rise, and instead an artificial pumping of the price occurs.
2. You can buy in a growing market, but only if there is a break through the resistance level (maybe for someone it's a new word, but it's better to learn the basics of trading).
3. Always remember, there are 2 sell/buy glasses on the stock exchange, which means that against your deal for a purchase is a sale, where an experienced player comes out of a long position to re-buy at the bottom.
Mistake № 2. Sale of coins on the bottom (fear of losing everything).
No less number of investors falls into this situation. Surprisingly, this is a mirror image of the "Buying on the top" scenario, the same high volume combined with the heavily falling prices. Only in this situation we already experience not the "lost profit syndrome", but "the fear of losing everything". Negative news, panic on the forums and big red candles. Typically, this situation on the market has a pointed depression, such as the letter "V" (see screenshot). Selling in this situation, you will very soon face a price reversal and regret that you have succumbed to fear, trying to leave at least something of your investment.
How to avoid such an error?
Follow the same rules as before:
1. Never sell when volume increases if the price is at the bottom of the market, especially when all support levels are broken and there is no valid reasons for further price drop.
2. Sell in a declining market, supported by volume, only if you really see that there will be a break through the support level.
3. Always remember: on your sell, more experienced players want to be proficient; for your sell is an order where another investment fund or a large trader enters a long position to buy.
I do agreed not to buying a scam project or ICOs that you dont recognize, but how can you define a project a Scam or not?? Except for lending coin which have we all know as Ponzi scheme that it is a scam project from the very 1st. Because when buying a coin you do have detailed plan about why you buying this coin.
For the first half paragraph i certainly agree with you to not buying a new ICO coin that already gaining 5-10x price from the initial ICOs price, but what about the major coin such as bitcoin, ethereum, xrp, stellar? And mostly i think this kind of technique define errors but dont define about how to fix the mistakes, support and resistance is just a minor indicator, if you're still riding the trend then i dont really have any problem buying higher when the price got a high volume, and sold all of my capital if the price declined and the trend begin shifting, start buying bitcoin since last year in $4k range when people start spouting about bitcoin wont reach higher price, it will burst into bubble and i do hold it until last week when price decreased below $10k. I believed most of people here dont even know how to indicate a top or bottom, so we got no idea if the price has reach bottom or top yet, because no one can predict a future, but instead we can make an exit plan before begin to trade and follow that plan
