13 Common Crypto Trading Mistakes: How to Avoid Them - TL Updates

13 Common Crypto Trading Mistakes: How to Avoid Them

Crypto trading mistakes are very common, especially among beginners. This heightens the risk of the already volatile market. Causing more harm to the trader. These mistakes have caused many newcomers to abandon trading entirely despite the future that blockchain promises.

13 Common Crypto Trading Mistakes Are: 

1. Investing without adequate knowledge of how the business is done. 

2. Failing to take their cryptocurrency business as seriously as they would other businesses, like industries or real estate business. 

3. Failing to carry out proper research on the cryptocurrency they wish to invest in. 

4. Failing to diversify their investment and investing in just one coin or token only. 

5. Having a wallet in which they do not have control of its seed words and private keys. 

6. Not securing their seed words and private keys properly. 

7. Leaving your cryptocurrency in exchanges might cause you to lose money when the exchanges fold. 

8. Going with cryptocurrency pumps out of Fear of Missing Out (FOMO) 

9. Not reaching a legal agreement before handing over their funds to the trust of a third party. 

10. Signing in to cryptocurrency doubling groups, Ponzi, and pyramid schemes.

11. Leaving a trade position quite late or too early; you’ll need to master the psychology of trading. 

12. Disregarding transaction fees while trading or moving tokens/coins.

13. Having no plans of transferring the asset in event of death.

How to Avoid The Mistakes

You must gain all the necessary knowledge so that you can manage your business by yourself without entrusting your funds to a third party. You may not be able to enjoy the full benefit of the business when you allow someone else to manage the business for you. Be sure to sign an agreement in case you choose to have someone trade for you. 

Only invest in projects you know of. Carrying out adequate research will help you not fall into crypto scams around. You’d have to cover different areas while carrying out the research, areas such as token supplies, token release, token economics, teams, project development, community engagement, etc., all of which were already discussed. 

Ensure to make use of trusted exchanges for trading. Avoid using questionable exchanges, so you don’t lose your funds. Also, avoid using margin trading until you’ve fully understood it.

Engage in different projects by diversifying your portfolio. Invest in a mixture of low cap and high cap projects.

Withdraw your profits at intervals. Ensure to have a considerate profit margin. You can store the profits as stable USD coins (PAX, USDC, BUSD) if you intend to retain the dollar value. One can also choose to store it in bitcoin just in case you wish to retain the Bitcoin value.

Sometimes, you might be tempted to go into a trade when the price is going up. Try to avoid such an urge as you might end up losing money to those who got into the trade before you. 

Many newbies have lost a huge part of their crypto investment to transaction fees. Transaction fees are paid for every transaction. These fees can spike when the network is congested. Always identify how much each transaction will cost before making it.

Ensure you make plans on how you’d transfer the cryptocurrencies to an heir in the event of death. So many individuals have had their huge cryptocurrency investments trapped after their death. You should inform someone of your seed words or private keys so that your funds are not locked up forever. You may choose to write and close up your seed words and keep them safely in the bank. Furthermore, you may be asked to pay some annual charge by the bank while you have sole access to the key. The heir should be aware of the existence of that asset.