5 Common mistakes new traders in crypto make

in bitcoin •  20 days ago

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These are some of the common mistakes I believe that new cryptocurrency traders make. This isn't a complete list and there are plenty of other mistakes that some new traders make such as cloud mining, buying into pump and dump coins etc.

---- Searching for that coin that will make you a millionaire

While I believe it is possible to find that one coin that will make you a millionaire, it is also possible to constantly be investing in coins that offer little value or utility to the crypto marketplace as a whole.

Searching for that one coin that may make you a millionaire in just a few weeks is difficult as most of these types of projects are scam projects and will pump up the price only to run away with all of your money.

A better long-term strategy is finding a good project with a great use case and investing more of your money into a fairly valued project, and waiting until the experts believe that the price is fairly valued. Also, you should do your own research here including technical analysis.

---- No source of income from job, business, etc.

Keep working- find a way to make a decent income and invest some of that money into crypto. If you find your pockets empty all the time, then when you find the perfect investment it will be essentially useless. Continue to make money and work and then when you find the perfect investment you will be able to take advantage of it.

---No diversification or too much diversification

Investing all your chips into just one cryptocurrency or 1 blockchain might not the best way to go. It is important to gauge your risk tolerance and decide which investing strategy works best for you. Typically for me investing in 3-5 projects is the way to go. Some diversification, but investing in 20+ projects will probably kill your expected ROI on projects you invest in.

---Buying a coin at an all-time high- not using any technical analysis or charts when making a decision to buy

Buying at an all-time high is one of the biggest mistakes new investors make in cryptocurrency. It usually isn't very easy to find the best time to buy however, but if you look at the history of the cryptocurrency market you can try and time your purchases better by realizing that with Bitcoin there is typically a new all-time high price every 2 years, followed by a crash of about 70% or more. While, history doesn't always repeat itself there are some patterns happening in cryptocurrency that you should pay attention to.

---Buying coins only based on hype

Buying coins based only based on hype may work sometimes and other times you will lose badly. If you're only buying on hype then you probably aren't considering things like which exchanges the coin is listed on, how much trade volume there is for the coin, and what the team has actually accomplished vs. what they plan to accomplish. Some coins/tokens with low trade volume will be extinct, and even if there is $50,000 of trade volume for a coin in 24 hours, it is still possible that there are only a handful of people trading this coin.

These are just my opinions it is always important that you do your own research before making any new investments.

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I respect your opinion becouse its true and everybody should do his search

The biggest lesson I learned from trading cryptos this year is never ever leave your coin unattended for too long. This is the practice of hodler. I have lost 70% just letting it sit.

Lately I have been buying in when the market is red. Then hop out when I gained about 7%-10%.
Then repeat. It takes discipline, but it works for me for now.

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Yeah taking profit when you can is really the lesson I've had to learn as well, but buying good projects at a fair price is important. Better take Warren Buffet's advice here: "I'd rather buy a good company at a bad price than a bad company at a great price."

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That exactly what I thought when I made a big purchase of STEEM at $1.49. And with every big drop, I have been buying more to average out, but it kept dropping. Now here we are at 27 cents. Ouch!

Nicely explained. It's true that most of the coins are scam but we need to be very careful while selecting coins to invest. Better we should invest in top 10 or top 20 coins so there would be low chances of scam. Trading is tedious task but it can be easy if done with proper research. Thanks for the post @the4thmusketeer

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Hi

I think most of coins out there are not necessarily scam, but those are projects run by people with no experience in managing large money. Wouldn't you agree?

Cheers @alokkumar121

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I didn't mean to say exactly that these are scams but as you said that these are managed by people who don't have that much experience to manage in the proper direction. I agree with you @crypto.piotr
I invested in Bitcoin Cash this year in January but after the split or you can say hardfork its a big time loss. I am still hopeful for long term but don't know bro howlong.

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hi @alokkumar121

Thank you again for your kind comment. And hope to "see you" in 2019 :)

Yours
Piotr

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Thanks @crypto.piotr for all your support this year and looking forward to work the same way or even better next year together. A very happy new year to you and your family.

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Yes, good point here crypto piotr. Most of these projects are run by people who have never had this kind of money, and they launch their $5 million ICO, and then they panic and often make a lot of mistakes.

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Yes @the4thmusketeer this is a valid point and Crypto.piotr always raise great points like and this is what I love about him. He has very good of blockchain and cryptocurrency.

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ps.
I've been surfing youtube a while ago and I've found one influencer which content I found very valuable and interesting. Especially if you're planning to be an influencer yourself.

It's min long but first 2 min are enough. Check out this youtube video:

And ENJOY your NY Celebrations.

I believe that 2019 will be difficult and challenging. Hope you will go through it without any real difficulties. I was really a pleasure to get to know you this year.

Obviously upvote on the way :-)

Yours
Piotr

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Thanks for all of your comments crypto piotr, I think 2019 will be a great year for me and I wish the same for you. Happy New Year!

I agree with you im one of them i brought many times when see coins pump and i lost but we should lose for learn

We all make mistakes but we gain experience and wisdom from them.

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Yes, I agree with you. Investing is risky, but usually you can walk away with valuable insight from this.

A few points here but mostly waffle. If you're going to trade you want to separate some money for making profit, with the money you want to invest in projects you love, (because you might want to actually use them!) There are coins like TRX, EOS, that are platforms with dapps that can be enjoyed. There is Steem that can help bring extra traffic to your online projects etc... so this is investment in long-term utility or use-case today.

Trading for profit means you're using a portion of funds, probably moving in and out of Stablecoin, to ride trends moving upwards, or short (sell) in order to accumulate.

There is no secret formula but there are multiple coins with recurring opportunities to ride, in this brilliant, volatile nature of crypto, a young market.

It's here you learn to realise that every rise in price will come down again, hence you can set several targets.
There may come a time the market will run away from you, but you have to average your losses with those opportunities you capture.

All this opportunity may not last as the market matures, but for now there is a lot of trend-riding to do! May the Force be With You!

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These are basic points I made that have helped me, but this won't work for everyone. I agree with you that Dapps are basically the future of crypto. Ethereum, Tron, EOS, and Steem are all platforms that give small businesses the technology to build and sustain a business on top of the blockchain. So all of these blockchains already have use cases as long as long as people develop on them. I'm invested in quite a few dapps myself, and I'm wondering if I should invest in dStors?

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Well put. No different than any other investing...stable/risky

Who has bought bitcoin at $19,000 ? I believe many people did that, as it rose to $20,000! Great article, upvoted and resteemed!

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Thanks for your comment. I still think we'll see an all-time high for Bitcoin, but it probably won't be this year...

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Brought to you by @tts. If you find it useful please consider upvoting this reply.

We have to be careful with the terms being used here; A trader is not the same as an investor. A trader is thinking short term and an investor is thinking long term. Most of the people who lost after the last bull run were traders. An good investor would have done his research, and brought with the intention of holding for at least a few years. It seems that your post is targeted towards investors which in that case some of the advice presented is largely irrelevant (price, TA).

Do you think joining trading competition for newbie like me is a mistake too? i cant trust myself in picking a good investments for me. https://www.reddit.com/r/kucoin/comments/a93w3i/ono_onot_trading_competition_win_7_btc_147000000/