Crtypto trading is a risky business with lack of knowledge, wrong expectations, miscalculations of the market trends, baseless market analysis and many other factors. There are many other factors that makes it risky but it is unfair to call it so without having an evidence of its risky nature. So here is the list of 3 Mistakes to Avoid while Trading Cryptocurrency.
Is it really risky?
Are you one of those who just believe it after hearing in the news and listening to your fellows?
Find logic before coming to any conclusion. It is risky when we have a little knowledge about the decisive factors which influence its value. It’s risky when you make a trade based on a blind guess. It is risky when you trade on your intuition. It is risky when your trade decisions are not driven by analysis and market knowledge.
Below are the five mistakes that every trader must consider while executing their trades and to do carefull Trading Cryptocurrency:
Never enter a trade without reason
Most of the traders look for short term trades so that they could quickly earn a profit. When they are in for a short profit, they don’t consider it worthy of being analyzed and do it blindly. This is their biggest mistake.
They forget that they are in competition with their fellow traders. It’s a zero-sum game where one’s profit basis on the loss of the traders who stand on the other side of the equation. Always assume that your rivals have entered into a trade with a better logic which could result in their win and ultimately in your loss.
3 Mistakes to Avoid while Trading Cryptocurrency
If you are not finding any logic to start a trade, don’t do it for that day. Its better to stay safe than to be victim of your own poorly devised trading strategy.
Not set a stop-loss for your trades
It is very crucial to set a proper stop-loss level for your trades. Do analysis and make a plan on where to get out of the trade if your coin takes nose-dive. The unfortunate part is that we hold on our currency in this situation with a wish that it will turn around and start going upwards. This strategy exposes us to bigger loss because crypto trading is riskier and it has the capacity to drop its value by 80% in couple of hours and sweeping away your account. So it is recommended to set a stop-loss level for your trade and do vigilant Trading Cryptocurrency.
Read Also: Cryptocurrency Wallets-Ninja Tips on Choosing the Safest Wallet for Your Digital Currency
Fear of missing out on the opportunity
It is really hard to hold our nerves when we see a price chart mounting in green and giving huge profits to the traders who participated in it. Seeing it from the outside really tempts you to enter into the market and grab your share. Seeing the big green chart you thing you are the only won missing out an opportunity and you start a trade in desperation.
Most of the traders execute their trades on intuition and at the same moment plenty of trades flood in. The price could be its saturation point where it is all set to go down on the chart and hurt all the traders who got on the train when it was near to the station. So it is recommended not to make a trade out of desperation or fear or greed. Never discredit the logic and reason before making a trade so that you could enter into the market with a knowledgeable strategy.