With global crypto adoption steadily increasing, it’s no wonder that many people are deciding to see what the fuss is all about. However, what new traders often don’t realize is that crypto trading is not to be taken lightly – there’s no miraculous “get rich quick” scheme to rely on. Like any other line of business, this one also requires plenty of learning and a substantial investment of time before you see results.
But, you do need to start somewhere. With this in mind, we’ve prepared an article aimed at traders taking their first steps in the crypto world. Read on to learn the most common mistakes to avoid in the first stage of your path to crypto trading success.
1) Unsufficient research
In crypto trading, research is key, as it will shape your trading strategy. Solely relying on tips from other traders and making investments without fully understanding why you’ve done so won’t get you far.
Before deciding on an asset to invest in, you’ll need to look into its previous performance in order to try and deduce the asset’s upcoming price fluctuations. It’s a good idea to look for patterns, such as how low did the price drop in the past before the crypto recovered, or conversely, how high it was before it shrank.
You’ll need to know what’s the current demand for an asset and to have an idea about its longevity. In addition, we advise learning about a crypto’s market capitalization (combined value of all crypto’s tokens in the market), and the developers behind the crypto. Finally, reading the crypto’s whitepaper is beneficial, as it will assist you with spotting any unique features that might set it apart from other cryptos.
All of these pieces of info will shape your trading strategy. And without a sound strategy, your cryptocurrency investments are doomed to failure before you’ve even invested.
2) Fake trading bots
But research on specific cryptos is not enough. You’ll also need to decide whether you’ll be using a crypto trading bot to help you out, and if so, conduct research to find out if it’s a legitimate product or a scam. Consulting with Scammer Watch, a specialized website, is highly recommended in order to avoid falling victim to scammers.
Legitimate trading robots are a tool that can help investors by automatizing a part of their crypto trading. However, don’t make the mistake of thinking they’ll do all the work for you. The only way for a trading bot to function as intended is with frequent supervision and manual input of your trading strategy parameters (which you’ve hopefully discerned through careful research).
Even worse, don’t make the mistake of choosing a fake trading bot. If, for instance, we look at the Bitcoin Buyer scam at Scammerwatch.com, we’ll find a scam that exemplifies all other trading bot scams – multiple fake websites, inauthentic reviews, and user reports of the con artists disappearing along with the $250 minimum deposit.
There are so many of these scams that it’s hard to keep track of them. For example, we can read about the Bitcoin Pro trading bot exhibiting the same telltale signs of fraud, along with literally hundreds of other fraudulent bots. So, be careful.
3) Too much emotions
When it comes to investing, there’s no room for emotions. For instance, feeling sentimental toward a certain crypto can make you hold when you should’ve sold. Or, it can make you panic and sell the crypto when it’s actually better to hold it. Instead of making rash moves, therefore, your decisions will need to be entirely rational if you want to see a profit.
The same goes for investing more money than you can afford to. Regardless of how thrilling the process is or how promising an investment may seem, it’s unwise to gamble with money whose loss you cannot afford. You need to remain cool and collected at all times.
It can be equally tempting to invest your entire capital into a single crypto you’ve come to love. While we all have our favorites (regards Solana fans out there), the harsh reality is that the value of practically all cryptos is rather volatile. And when it shrinks, you and your wallet will be sorry if you previously failed to diversify your portfolio.
Finally, beginners frequently make the mistake of relying on leveraged trading. Enticed by the excitement of potentially making a quick profit with a minimum deposit, such users most often lose their entire investment due to market volatility and small operating budgets that can’t support their positions. Don’t let your emotions get the best of you, no matter how exciting it may be.
While what we’ve discussed is just the tip of the iceberg, it should be enough to get you started. Always conduct plenty of research, leave emotions at the door, be careful when dealing with trading robots, and soon enough, you’ll be reading articles about common mistakes intermediary crypto traders make. Good luck, and remember that, while no beginnings are easy, there’s nothing to stop you from learning and becoming a proficient crypto trader for life.
Blockchain and smart contract expert with over 7 years of experience managing cryptocurrency funds. I provide lectures and workshops on blockchain and smart contract programming to the crypto community.