1- DON’T USE THE WRONG EXCHANGE : To put this particular tip into perspective, not every cryptocurrency exchange is designed to be used for various altcoins. There are some clear market leaders who can be trusted when it comes to trading alternate cryptocurrencies, whereas others seem slightly shady. Using the wrong exchange can result in withdrawals not being honored or trading markets becoming inaccessible at the wrong time. Always do your own research before trusting an unknown company with your money, as it can be difficult- if not impossible – to get it out again when things go awry.
2- BUYING INTO SCAMS : The world of alternative cryptocurrencies is filled with many opportunities, although not everything is what it seems. Unfortunately for novice traders, it is rather difficult to distinguish between a worthwhile and useless attacking. At the rate at which coins are being “developed” these days, any new coin should be avoided until it properly establishes itself in the market. At the same time, investors and speculators want to buy potentially powerful coins as cheap as possible. Getting in at a later stage will decrease the chances of making a big profit along the way. There is a very fine balance to walk between buying coins cheap and investing in a pump-and-dump scam at the wrong time. Most novice traders experience the latter option well before they will make their first major profit.
3- PANIC-BASED DECISIONS: One thing every cryptocurrency trader needs to keep in mind is how panic can be one of the worst motivators to make the right trade. Markets are very volatile in the altcoin scene, and it doesn’t take much volume to send things in either direction. There is nothing wrong with trusting a gut feeling, but panic should never determine how and when one trades. To this day, a lot of novice cryptocurrency traders let their actions be guided by panic and fear
Topic: 5 errors when buying crypto currency - page 8. (Read 1326 times)
1. thinking the market CAP has meaning
2. not noticing the trade volume
3. not reading the white paper
4. investing in something that has no actual demand
5. selling when everyone else is selling
2. not noticing the trade volume
3. not reading the white paper
4. investing in something that has no actual demand
5. selling when everyone else is selling
Very in depth study buddy! Thats a good analysis and representation of the whole thing. Yup, your description with the conclusion part is the most beautifully put here and hope that it help many traders that are new on the forum.
I liked this one. It relates to one of the project in which I invested heavily recently and I expected a lot form the same. The project was complete success in the beginning but later on it dropped like crazy. However, I did not bother to buy it on mass level because I was expecting that it will renounce surely. But it was really really foolish to over trust it and now I'm completely in the loss.
Yes, you have made good point really and wish I would have read it earlier. I mean at least it would have given me some spark not to buy.
This guide will surely help others. Keep it updated.
Quote
Mistake № 4. Buying leaders who have recently sank to the bottom.
I liked this one. It relates to one of the project in which I invested heavily recently and I expected a lot form the same. The project was complete success in the beginning but later on it dropped like crazy. However, I did not bother to buy it on mass level because I was expecting that it will renounce surely. But it was really really foolish to over trust it and now I'm completely in the loss.
Yes, you have made good point really and wish I would have read it earlier. I mean at least it would have given me some spark not to buy.
This guide will surely help others. Keep it updated.
Everyone who comes into the crypto business makes almost the same mistakes because of his inexperience, patterned thinking and, panicking under the influence of the crowd. If discard all illusions about our own "EGO", we are all imperfect people and prone to make mistakes. The financial market likes such amateurs and absorbs them with guts, because it is the only one which is always right and remains in a huge plus. And the question is - how to deal with it? It's quite simple – rule out these mistakes and you will defeat a crowd of losers and climb to the top of financial success.
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. Of course, in each case there is still a chance for profit from further coin growth, but the probability of a decline in this moment is usually very high. Eventually, an inexperienced investor sees how the pump of the coin ends and he suffers losses of 100%. As a rule, any growth price is accompanied by an increasing volume and it is fraught - if there are buyers, then there must be seller. As a consequence, the increasing volume in the growing market may be a sign of the top achievement, as volume is a leading indicator for assessing future price development. People themselves generate volumes at a peak - see how the price increases, experience a "loss of profit syndrome" and soon receive losses.
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.
Mistake № 3. Growth leaders sale
It often happens that the investor, instead of long-term investments, is limited to short-term investments. Having received the coin's growth in 3-5 times, he sees a small drawdown after growth and makes the assumption that this is a signal for sale, the coin should fall. To his great disappointment, after some period of calm and movement in the lateral range, the price soon easily rushes to new heights. And what about trade on the correction, you ask? Gentlemen – this is an art that you still need to master, because you are starting a dangerous game against the trend. As a rule, the growth leaders do not go for a turn, but stop in a narrow corridor for a short respite and a further jump up. Of course, reversals of leaders happen, but most often this is due to SCAM of the project itself or serious security problems of the technology itself.
Use the following rules for this item:
1. Do not take short positions on the growth leaders, this is an investment for 6-12 months minimum.
2. If an outset emerged on the uptrend, you can count on a new breakthrough up (the longer the lateral trend lasts, the more chances to go higher up, breaking through the resistance level on the top).
Mistake № 4. Buying leaders who have recently sank to the bottom.
This error is a consequence of the newcomer's greed and rashness. Typically, the crypto business comes, hearing in the news of super profits, for example, about how Bitcoin did 18000% for a paltry 5 years. Looking at the Bitcoin, Etherium, Verge graph, the newcomer looks and imagines that he now had if he bought Bitcoin for $1000 in 2010-2011 or Etherium for $2, and even just investing in Verge $100, now he could drive on a steep wheelbarrow. In such moments, as a rule, we would like to think that the price always comes back and it is necessary to find a coin with a drawdown of 99%, of the latter, it is a sensational BitConnect project. I will not write about it, this coin refers to 5-th error. (This paragraph does not apply to the situation with Bitcoin in 2013-2014, when there was a hard correction).
Here is only one rule: do not take coins, the drawdown for which was more than 70%. Any technology (project) has its beginning and end, and during the rapid development of ICO (other more advanced technologies, projects) it is foolish to expect a quick recovery of the scam position of the project that has lost the key staff of the development team or key investors. The latter, most likely, at this time invest their funds in Etherium 4.01.
Mistake № 5. Purchase coins from scam projects.
This error is a consequence of the previous one. Greed has ruined us.
Very often I hear about over profits in Landing ICO, investing in InvestBox and so on. If the project offers more profit in the shortest possible time - think! Most likely you are offered to enter the financial pyramid and will be enriched by the miracle of the project written on a cheap Internet template. Yes, you can quickly make money here, but you can lose everything quickly. Therefore, these projects do not suit us, we are investors and traders, not roulette players.
In this situation, observe the following rules:
- Do not buy unknown coins, which are not available on such authoritative resources as CoinMarketCap, Investing.com
- Do not get involved in projects that offer you an income of 10-20% per day, most likely it's a banal pyramid. If you went into it, you can never leave.
- Watch coins on CoinMarketCap, it is desirable that their daily volume was more than 1 million, the total capitalization above 60 million and they traded on leading exchanges such as Bittrex, Binance. As a rule, such coins than are backed up and the chance that this scam-project is not great.
I want to add to everything that I'm saying above: the market of crypto-currencies is still young, the total capitalization is negligible, 2% of the entire population is aware of mining and blockchain, so there is still time for investments and making money.
Good luck and profit to all and thanks for your +Merit.
Link to my original post in Russian https://bitcointalksearch.org/topic/m.29198113
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. Of course, in each case there is still a chance for profit from further coin growth, but the probability of a decline in this moment is usually very high. Eventually, an inexperienced investor sees how the pump of the coin ends and he suffers losses of 100%. As a rule, any growth price is accompanied by an increasing volume and it is fraught - if there are buyers, then there must be seller. As a consequence, the increasing volume in the growing market may be a sign of the top achievement, as volume is a leading indicator for assessing future price development. People themselves generate volumes at a peak - see how the price increases, experience a "loss of profit syndrome" and soon receive losses.
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.
Mistake № 3. Growth leaders sale
It often happens that the investor, instead of long-term investments, is limited to short-term investments. Having received the coin's growth in 3-5 times, he sees a small drawdown after growth and makes the assumption that this is a signal for sale, the coin should fall. To his great disappointment, after some period of calm and movement in the lateral range, the price soon easily rushes to new heights. And what about trade on the correction, you ask? Gentlemen – this is an art that you still need to master, because you are starting a dangerous game against the trend. As a rule, the growth leaders do not go for a turn, but stop in a narrow corridor for a short respite and a further jump up. Of course, reversals of leaders happen, but most often this is due to SCAM of the project itself or serious security problems of the technology itself.
Use the following rules for this item:
1. Do not take short positions on the growth leaders, this is an investment for 6-12 months minimum.
2. If an outset emerged on the uptrend, you can count on a new breakthrough up (the longer the lateral trend lasts, the more chances to go higher up, breaking through the resistance level on the top).
Mistake № 4. Buying leaders who have recently sank to the bottom.
This error is a consequence of the newcomer's greed and rashness. Typically, the crypto business comes, hearing in the news of super profits, for example, about how Bitcoin did 18000% for a paltry 5 years. Looking at the Bitcoin, Etherium, Verge graph, the newcomer looks and imagines that he now had if he bought Bitcoin for $1000 in 2010-2011 or Etherium for $2, and even just investing in Verge $100, now he could drive on a steep wheelbarrow. In such moments, as a rule, we would like to think that the price always comes back and it is necessary to find a coin with a drawdown of 99%, of the latter, it is a sensational BitConnect project. I will not write about it, this coin refers to 5-th error. (This paragraph does not apply to the situation with Bitcoin in 2013-2014, when there was a hard correction).
Here is only one rule: do not take coins, the drawdown for which was more than 70%. Any technology (project) has its beginning and end, and during the rapid development of ICO (other more advanced technologies, projects) it is foolish to expect a quick recovery of the scam position of the project that has lost the key staff of the development team or key investors. The latter, most likely, at this time invest their funds in Etherium 4.01.
Mistake № 5. Purchase coins from scam projects.
This error is a consequence of the previous one. Greed has ruined us.
Very often I hear about over profits in Landing ICO, investing in InvestBox and so on. If the project offers more profit in the shortest possible time - think! Most likely you are offered to enter the financial pyramid and will be enriched by the miracle of the project written on a cheap Internet template. Yes, you can quickly make money here, but you can lose everything quickly. Therefore, these projects do not suit us, we are investors and traders, not roulette players.
In this situation, observe the following rules:
- Do not buy unknown coins, which are not available on such authoritative resources as CoinMarketCap, Investing.com
- Do not get involved in projects that offer you an income of 10-20% per day, most likely it's a banal pyramid. If you went into it, you can never leave.
- Watch coins on CoinMarketCap, it is desirable that their daily volume was more than 1 million, the total capitalization above 60 million and they traded on leading exchanges such as Bittrex, Binance. As a rule, such coins than are backed up and the chance that this scam-project is not great.
I want to add to everything that I'm saying above: the market of crypto-currencies is still young, the total capitalization is negligible, 2% of the entire population is aware of mining and blockchain, so there is still time for investments and making money.
Good luck and profit to all and thanks for your +Merit.
Link to my original post in Russian https://bitcointalksearch.org/topic/m.29198113
Jump to: