After 8 years of crypto trading, I always noticed the following 7 mistakes that are made by the bank by every newcomer to crypto. However, you are already better than 99% of all crypto traders if you do not make these 7 mistakes.
Interestingly enough, everyone makes these mistakes at least five times until they are actually internalized. Even after reading this post, everyone makes these mistakes at least five more times before they understand and implement it. Even I sometimes catch myself making these mistakes.
Therefore here are the 7 most common mistakes in crypto trading, sorted by frequency:
- Emotional Bitcoin trades newbies almost always trade emotionally. The best trader, however, is the trader without any emotions, like an emotionless robot. This leads us to the second mistake.
- Buying Bitcoin and Cryptocurrencies High and Selling Low Newbies almost always buy high and sell low. However, profit traders trade like a robot that does not become greedy at a 200% increase, but takes profits without emotion or does not sell but re-purchases in a 70% crash. This seems very obvious and understandable, but most crypto traders do the opposite because of mistake # 1.
How do I know? Because everyone bought Bitcoin when the Bitcoin price was $ 15,000 and sold a lot when it dropped to $ 10,000 after that. When the Bitcoin price was $ 7,000 and later $ 3,100, almost no one bought it anymore and everyone said that Bitcoin was dead.
- All-or-nothing purchases Due to mistakes # 1 and 2, newbies buy or sell all of their cryptocurrencies at once instead of buying and selling them in small increments. That's why an experienced trader sells, for example. after 50% profit, 20% of its cryptocurrency, another 20% for 100% profit and another 20% for each additional 50% profit ( dollar cost averaging ). This way you always make profits and always have money to buy dips after a correction.
However, inexperienced traders never sell because they are usually too greedy. So they never have money for dips or they sell everything all too early. Therefore > dollar cost averaging .
- To buy cryptocurrencies that only offer hype but no technical innovations. Newcomers like to buy cryptocurrencies that make a lot of promises and use cool words, but that don't offer any technical innovations, such as EOS, Tron, NEO, Litecoin.
These are extremely centralized blockchains, e.g. EOS and TRX are extremely centralized with 21 nodes, NEO has only 7 nodes, 5 of which are controlled
by NEO itself. It couldn't be more centralized and yet so many people are so enthusiastic about these coins, especially newbies.Putting your eggs in too many baskets Newbies like to buy 20 different cryptocurrencies due to error number 4. This is bad, because on the one hand the earnings are very watered down and on the other hand there are not even 20 good cryptocurrencies. If, for example, you actually have a coin that generates a 100-fold profit, this profit dilutes by a factor of five with 20 coins in the portfolio.Therefore, you should only agree on the very best 4-7 coins that can make a 100-fold profit and throw out all the remaining shitcoins. Not many altcoins will survive the upcoming bullrun, only those that already have millions of users or millions of dollars in sales. You can count these on one hand. The rest is all shitcoins.
In the crypto world, Shitcoin counts well beyond reasonable doubt until proven otherwise. Every crypto investor should have this standard before adding new coins to his portfolio. The time of gimmicks is over.
- Putting all eggs in one basket Newcomers like to bet on only one altcoin due to the first four mistakes. However, you should make sure to have a well diversified portfolio. Furthermore, newcomers often like to have all their Bitcoin and cryptocurrencies in one wallet or on just one exchange. Nevertheless, you should keep your cryptos on at least 3 different wallets (e.g. exchanges, online wallets, cold wallets, hardware wallets, paper wallets) so that not everything is lost if one of these wallets is hacked or lost.
- Investing More Than You Can Afford To Lose Newcomers often invest more money in cryptocurrencies than they can afford to lose. As a result, they become much more emotional and make worse trades.It is a doom-loop. That's why you should never put more than 20% of your savings in Crypto for larger sums. You have seen what can happen despite good Bitcoin price development. Altcoins have had massive losses in excess of 70% only in the past month. Of course, this can go the other way as well, but crypto trading remains a high-risk matter.Therefore, you should pay attention to this 7 error checklist for your next trades and avoid these errors as much as possible. You will probably still walk 2-3 times, but that's the way it is.
