Topic: 5 mistakes every crypto trader should avoid (Read 1069 times)

Every Mistakes that we can make it gives to us an idea or lesson on how it cannot do it again.

But mistakes is always there even we avoid it sometimes can still encountered it just like in trading many traders are very careful in buying coins and selling it but look at them they still making a mistake and count to think of it they are professional and expert trader what more those trader who are beginners.

But even that we still need to be vigilan or do our best to avoid mistake while doing trading because if we do little wrong move money will be involved so if we want to earn make sure you know the do's and don'ts in trading.

Be careful who you follow or take advice from. There are many scammers out there.

Project diversification is key but in terms of re-investing this can be something more challenging for people who aren't always keeping an eye on how the market is doing. Re-investing is also more risky since you really have to be an optimist and have an outweighed benefit which usually comes from long term hodling.

Thank you ! So much useful info. Personally I found some more things recently

This is an article I found at the service I use https://www.bitinsure.com/

Avoid greed

One of the most harmful feelings in your mind during trading is greed. Just remember what you think when the price rises after you opened a long position. It really requires lots of effort to close the position, as you are wishing more profit flowing into your wallet, admiring growing trading volumes and amazing news about this particular cryptocurrency which is so promising and will grow forever. Here it is necessary to take off the blinders and understand that eventually, the price stops. Be it a gradual decrease or a dump, probably technical problems on the exchange, if you are a trader (not a long-term investor), you should fix your profit not waiting for the reversal trend. The exit point should be identified in advance, basing on the previous coin dynamics, your ambitions, strategy, trading volumes, social media mentionings, the reaction of whales (huge market players) and many more, not enabling the greed to manage your actions.

Fix profit by parts

The top level of the price (or bottom in case of short) is very appealing, but keep in mind that it is seen on the chart only after the price passes it already, while during an uptrend, for example, it can be hardly ever noticed.  That is why a wise idea to benefit from the price movement is to grab profits by parts on the way to the top or bottom. If you do not have enough time to monitor the price you can set the orders one by one on the way to the rally. Here is a useful trick: Consider support and resistance lines, and set take profit orders below support (long) and above resistance (short). The amount of the part depends on your strategy and aims. The only advice is not to close the position on the way to top/bottom. Leave a part of the initial sum (like 10% of it), as you never know if there is a jackpot after.

Do not put all your eggs in one basket

One more key concept is the diversification of the portfolio and calculation of its amount. Actually, it is a wide and fascinating point to discuss, and only the core points of it are regarded in this article.

It does not matter how promising one or another asset seems to you, try to focus on a range of opportunities, as in the crypto world something can suddenly go wrong (as anything in life). Just imagine that all the hype and price growth is ruined by one negative piece of news or was created artificially! Or, for instance, the decision of a huge market player which has a tangible impact on the price fluctuations. Never go for broke!

The wisely composed portfolio implies several types of assets of different industries and risks. The number of assets has almost the only limitation which is the number of positions you are able to manage, as even profitable coins should be monitored and controlled. Otherwise, it is not as effective as it could be, but we definitely need maximum effectiveness. What is more, no control means stress, which is not what successful trading implies.

No doubt, these features are up to your aims and overall strategy, however, to minimize risks, it is better to use up to 10% on each asset. In case of your firm confidence in the asset let it be more, but remember that all the rising tendencies finally finish. Therefore, having one outstanding asset should be better supplemented by finding more new opportunities to switch the attention to.

Below you can see a balanced portfolio example with various assets included. By the way, the detailed balance is calculated in statistics module in Bitinsure and presents your portfolio in a visual way.


Be forward-looking: Reinvest, invest, convert

It is one of the most effective ways to use your gains to multiply it. There are several options to use it, some of which are the following:

30% reinvest in new prospective altcoins,
25% enlarge the most profitable positions you have currently,
25% invest in other assets,
20% convert into fiat.
Pay attention to the last two points, as they are acting as a preparation for “hard times” in crypto. Of course, it may be difficult to resist the temptation of investing all into new coins, but thinking a few moves ahead a trader uses the profit

Indeed. And that'll ruin it for the people who have already established themselves in the trading scene. As we all know trading is just basically money circulating in a group of people where the ones who gained money "profitted" and the ones who lost money "lost". There has to be equilibrium in a system to ensure its profitability, and if everyone wins, then in a sense everyone loses too. Not to sound like an arrogant prick, but I believe that losses add fun to the trading industry and it's the money losses and gains that make trading bonds and assets flavorful.

As for FOMO, it all depends, yes FOMO is usually not a good thing one should do. But that a FOMO stops doesn’t still mean it’s late for you to buy. You can still rush in at the time the FOMO started and make profit from the market. So, it’s usually by luck, if you’re lucky it will work out for you.

Secondly, you’re right about putting in too much money too soon. I have seen people that borrowed money to use them to buy Bitcoin, including the guy that convinced his dad that they should all their savings money in Bitcoin because he thought the price would go up and he would make profit, but at the end they were disappointed. Anyone that wants to invest should start little and as time goes on you can increase the amount.

This is good advice, but it is rather difficult to implement for beginners. When prices are low and you have a certain capital to buy, then you will not think about buying in parts.
After all, if the price is now at its lowest point, then what's the point of taking risks and leaving part of the funds for the future.
However, I agree with you that it is necessary to take into account all the risks and break the portfolio into components.

I add important things to me and maybe other people also need, never make a purchase with all the funds, do it in stages. Buying in stages is important to cover losses. Except in the condition of bitcoin or altcoin the price is really low

I think most of the traders here are somehow faced with the above errors, because they are quite typical. I also fell into the trap of my ignorance of stop loss.
I was very surprised at the surprise when I found out that there is a functional capable of giving me the necessary tool for advanced control of transactions offline.
If I knew this before, I would have saved a lot of money.

I have tried this plan many times, but the prices are kept falling whenever we see an upward trend and downturn in the market. That's why we should always hold the profit we made in previous trades because trading is all buying and selling, buying again with the profits we made, whenever we lose value.

Although you lost when coin trading have lower price you must stop lost than you lost all your money in coin, I think when your coin not have bigger chance for growing up better cut lost than you must hold without have potential for growing up and you must lost all your money.

The problem is it’s rather difficult to distinguish greed from a prospective trading opportunity at the moment when you make decisions regarding opening or closing a deal.
This can only be understood by the end result. Therefore, it is extremely necessary and useful to keep a constant history of your transactions, as well as regularly analyze them.

The common mistake people make is that they don't have enough knowledge of the market as they mistake investing as trading. investing is like you throw the money and sit idly but trading is like you have to have constant knowledge of the market every time. When the market is dull, you have to hold your money. when the market is high, you have to withdraw your money immediately. Another mistake one should avoid is to stop trading in every other site. Not every site is secured and trusted, so always try to verify if the site you are trading on is trusted or not.

Exactly true, the biggest teacher of all time is life, there is no teacher that can teach anything better than life can teach it to a person.

You can try to help people as much as possible but no one will learn it better than their own trading and learning. If someone tells you to put a stop loss and you do, you will not learn anything, you just did what you were told to do and you have an idea of why you did that but not a great grasp of why.

But, if you fail to listen and you do not put a stop loss, you will eventually lose money and that will cause you to actually learn why you should put a stop loss when trading. That is basically the reason why experience triumphs over education almost in all parts of the world, I would trust a 53 year old garbage man with my money over an 19 year old economy student.

until traders do mistake and they themselves wants to improve , no words can save them from making losses they have to understand all by themselves while trading live no words will come to mind , they will do this mistakes again and again , traders who think of improving by there own interest will improve in trading

Thank you for sharing such useful information. Her real to know.

The most common reason why people get lost in trading is having a lack of knowledge about it, trading is not a simple thing, so if you don't have knowledge or skills about it then you should have not tried it because for sure you will lose your money.

Trading is not like investing, you have more chance to earn from investing because you can hold your money if the market is low, then withdraw it if the market goes high. That's it, investing is simple compared to trading, even you are a beginner you can still earn from investing, but if you are a beginner and don't have knowledge about trading then for sure you won't be able to earn from it.

You should have enough knowledge about different currencies or the currency that you are going to trade for you to earn from it. You may use the internet, this forum, etc. to learn things and basics about trading so you won't be able to lose your money.

Your all advices are correct. When I was new to trading I suffered a huge loss due to the FOMO buy many influencer  trapped me. I suffered this loss due to lack of proper guidelines. There are many traders who face huge loss because of fomo buy. And they couldn't use stoploss the right way. As a result, when the market goes down, they are loss continuously.

Start Small, Know when you are wrong and don't marry a Trade.

Mostly FOMO was the reason why traders always failed because they can't handle too much emotion, eagerness to sell and buy coins at the wrong time especially the newbies. But I cannot blame them because even I, became a victim of my own emotions.

Now talking with Diversification, I think this one of the best ways to reduce the risk exposure of our investment but we must know where to place those investments of us not just on random coins across the market. Choose those coins that you think would be profitable or you could just go visit the CMC and pick the coins who placed at the top since they have the largest volume in the market.