Topic: Beginner mistakes and how to avoid them - page 5. (Read 543 times)

You pointed out some good points. But it always amazes me when I see Newbies show up with the details of what mistakes newbies should avoid. Well, your forum rank doesn't define your trading experience. But, I would like to see such advice from more veteran traders. I am sorry if you are an experienced trader. The points you mentioned are good but can you explain the solutions as well?

If you are a professional trader, you must have a limit and target for each day unless there are some special events in the crypto market. You shouldn't go beyond the limit. About stop loss, sometimes it depends on greediness. Sometimes people want to see if market bunch back from the downtrend. They want to recover it in the same session. Which is why they end up getting liquidated.

It's really important for beginners to gain experience because sometimes they don't realize how important it is,
trading or investing long term is indeed the best option and Bitcoin is the right coin for that,
the most important thing is always learning both in knowledge and skills.

Having large capital does not guarantee that they will succeed in crypto because it depends on how good their skills and expertise are in trading. Apart from capital, one must also be able to control himself in trading so that when the market changes direction, he will not panic and can adapt to the market.

And our concern is only to use the money we can afford in trading so that if we experience a loss, the loss will not be too much. Don't trade if you have doubts about entering the market because it usually won't go well, so you better take a look at the situation first.

It is important to learn to trade more than anyone else so you can analyze the market before entering it.

With crypto there are many mistakes a new person can make. The largest is not keeping your funds safe in cold storage. Many people get their funds stolen because they keep it in a hot wallet and on Windows 10 which is full of bugs. They get it stolen even without downloading anything fishy. Hence why you need a hardware wallet to protect yourself.

Another issue is that they invest in way too many scams. Nobody wants to invest in bitcoin because the gains won't be 100x. So they invest in alt coins like Pepe and they are surprised that they end up getting rugged. And lastly the worse is leverage. Many people shouldn't be trading on 100x or 50x leverage. The markets are way too volatile and its easy to get wicked out in minutes with that leverage.

For me, my advice to beginners is to trade in the long term and stay away from scalping until they have a good experience in trading.

Patience and not being greedy are also important tips. These negative traits are the main reason why many novice traders lose.

In any case, beginners should not enter into large deals at the beginning, and it is always better to enter with what they can afford to lose.

Over trading including over doing this when you are in a win streak or revenge trading when you are in a lost streak. Both over trading types are bad as it will cause you future losses.

Making your trading plan is good but not all plans are good. So you must be flexible to change your plans when you see they are bad, close your plans instantly and take a break to think of what are wrong before you can learn  more, make better plans.

Don't over making plans too.

It should be Ignore to use stop-loss, not Failure to use stop-loss.

If you reject the idea to use stop loss, you accept risk to lose capital.

Failure of stop-loss barely occurs but it can appear if the market has very big change with Cascade effects make stop loss fails to fulfill its function. You can use Stop limit order to reduce Cascade effects.

What is a stop-limit order?
One of best weapons in trading (Stop loss order).

OP, I think the first mistake beginners make is not really having a defined knowledge of trading before they put in money to trade, and secondly, not knowing how to manage their losses before starting. Also, seeing trading as a major source of income to only rely on is a mistake newbies can make.

When they are pushing too hard to make profit every day, they encounter losses, which will lead them to over-trade like you made mention of over trading, and at some point they are not going to make the right decision for the trade as they will just be focused on making the profit and covering losses that have encountered. A newbie who has not yet developed their skills on how to handle losses can suffer countless losses.

For example, a friend invested $500 into trading, at some point he was only left with $200 due to losses, so he just came up with the decision to trade with all the remaining $200, saying "he doesn't care if that remaining fund is gone as well." Trading is not gambling, so it should not be treated as gambling, just as some newbies do.

I do encourage people to start small in cryptocurrency, everything is not just about money, you just have to understand the fundamental of trading before starting, if you are planning to trade with large capital and you don’t understand the fundamentals, don’t be surprise that you will lose all the money. It’s not about starting big, it’s all about you knowing what you are doing, you might start big and lose all your money and you might start small and grow your account, it’s about you investing big, it’s all about you knowing what you are doing.

If you are a beginner and you open too much trade, then you get confused at the end you end up losing money in all the trades, you shouldn’t be too desperate to make profit, it’s not all about you opening multiple trade, you can open a trade and make Good profit and if you open multiple trade you will endup losing money. Just make sure your analysis is right and focus on just few trades you can manage.

Newbies lack trading strategies, that’s why some of them are always ending up looking for trading signals, some of them don’t really know anything about trading before they start trading, their are lots of signal providers now, so they are being deceived by those people. Some traders don’t know anything about trading and they are not ready to learn, they just want to make money, if you don’t have strategy you will be losing money.
Stop-loss is good but not mandatory, if you believe in your analysis and you will be online to monitor your trade then it’s not mandatory to use stop loss, but if you are the busy type then stop loss is not really a bad idea, and also i do recommend newbies to use stop loss, it will help them cut their lost incase if their analysis is wrong and the trade goes against them.

It seems all these components have one source and it's "knowledge".
This is very important in trading so that you can execute very well and have minimal losses.

Those traders who didn't use stop-loss orders may also be more likely to engage in emotional trading, as they may be more inclined to hold onto losing positions in the hope of a market reversal.  It should also monitor their stop-loss orders regularly and adjust them as needed based on market conditions.

Another is to develop your trading strategy, it can help you stay focused, avoid impulsive trading decisions, and increase your chances of success.
If you don't have all of these, it's hard to deal with the market movement.

Another thing you need to add is self-control. There is one thing I have noticed regarding trading, whether futures trading, day trading, or even the forex market. 

One just needs to have his targets mapped out for the day, and once those targets are reached, you stop and close for the day regardless of whether your trade is on the positive or negative side. When most newbies are losing on trades, they get so emotional that they can't even control their anger. They just keep on trading without proper analysis of the market because they want to gain back all that they have lost, which ends up putting them at greater risk. 

My advice is that once you enter any trade and you happen to notice that your strategy is not working for you that very day, you stop for the day and take a rest, so as not to increase your chances of losing your entire fund. Which might even turn you to be looking like a gambling addict.

Overtrading is a big problem for newbie traders who think it is better to scalp on small volume pairs rather than chase a big trend. Sometimes it works but after paying so much commission to brokers they understand something is wrong and decide to change their trading style. If the trader has no trading plan, it becomes gambling which can lead to a burst account balance sooner or later, from my personal experience. Using trailer stops on profit zones and having pre-determined stop loss zone will save traders with experience in this field, IMO.

Most of the newbies in crypto space believe once they have a large capital they will definitely succeed in the crypto space, but they are wrong, not knowing that if you can't grow/manage a small account, you can't grow/manage a big account either, their are common mistakes they usually make an I will be giving out tips on how to avoid them,
* Over trading-- it's very important for a day trader to limit the number of trade he/she took in a day.
* Lack of trading plan-- develop a strategy an stick to it, do not ever enters a trade blindly, if not the market will remove you blindly.
* Failure to use stop-loss-- to me it's the most important thing I do while trading, an it's always close to my entry price, I do it that way so that if the trade didn't go as planned, I won't lose more than 10% of my margin.
I don't if anyone have more to add, so I can also learn?