Of course, there are several opportunities lurking around crypto trading, but that shouldn’t be the reason to jump into the crypto market swiftly with an eye for quick profits. It doesn’t work that way.
As a newbie trader looking forward to making a worthwhile profit from trading coins, there are pitfalls you should know beforehand. Yes, crypto trading can earn you big dollars in a matter of minutes, days and even weeks, but sadly, you can also lose all you’ve invested in a matter of seconds due to its volatility quotient.
1. Being reluctant to studying the market yourself
Being reluctant to study the crypto market is one of the pitfalls you need to be aware of before you start trading. Yes, in crypto trading it’s not wrong to follow expert advice on how to trade better, but, as a newbie who’s passionate about making serious profits, you need to study the market yourself to know when and when not to trade.
As a matter of fact, crypto trading is very risky. Just as people turn into multi-millionaires trading crypto overnight, people also lose all they have invested in a twinkle of an eye due to the high volatility of the market.
Note: If you’re trading in the coin market with just expert advice, you might end up losing lots of money. But if you’re willing to study and listen to expert tips, you could make better decisions on market matters.
2. Allowing emotions to take over your wheel of trading decisions
Allowing your emotions to determine your trading decisions is another pitfall you need to beware of before trading. Market experts on forex have proven that trading with emotions can ruin your whole investment.
Do you know that one of the factors ruining traders’ portfolio is “making a decision with emotions?”
Yes, emotions will definitely surface, but it’s your primary duty not to allow them to take over when it comes to making serious decisions.
3. Jumping to buy “cheap and unverified” coins
Rushing into buying unverified cheap coins just because you’ve read about them on some site or find them in your email is something you should avoid.
Marketers are good and they know how to “hype” a coin to a point that makes you want to invest in it. So, be careful in order not to fall for marketing, because just as there are great coins out there, there are also thousands of cheap and fake coins too.
Note: Do your homework before buying any cheap coin, and as a newbie trader, it is advisable to trade only popular coins rather than new ones.
4. Feeling that you’re missing out
This is another pitfall you need to avoid. Since the 2018 upsurge in Bitcoin price, FOMO (fear of missing out) has been seen as one of the great challenges for crypto traders. Just like emotions, FOMO will definitely come in to play, but, as a results-driven trader, you can fight it. You can avoid letting it control you.
Note: new opportunities come up every 24 hours in the crypto industry. Therefore, relax your nerves, plan wisely and let fear fade.
5. Investing all you have
It is very wrong to put all your eggs into one basket when it comes to trading cryptocurrency. And more so, don’t go and borrow just to trade coins – it is very risky and dangerous.
The crypto market isn’t a bed of roses. Traders fail most times. Don’t think of it as a win-win business. Just because you heard that someone made $1million in just one night isn’t enough reason for you to invest all you have or go as far as borrowing to invest. See, the market is full of uncertainty and for that reason, you should put in what you can easily count as a loss, something you can bear, something that won’t make your family or employees go hungry. Be smart!
6. Believing just any information you read
This is a great pitfall you just have to avoid. The internet has made news outlets accessible to anyone. Just about anybody can write anything on the web. While one of the challenges new traders face is knowing which news outlets to read, have it in mind that over 50% of news sources you see today aren’t feeding visitors with legit information. They’re more likely hype machines.
Hence, you need to be careful with the news sources you get updates from. More importantly, do your research before implementing any recommendations.
7. Getting too attached to a coin and investing all you have
Actually, it’s okay to have favorite coins to trade, but as a business-minded trader, it is wise not to get too attached to a particular coin. Because if you’re too attached to a coin, you might end up investing all you have in it and this might also result in missing opportunities that are lurking around other coins as well. Also, if the market suddenly goes against you, you might end up losing, and you won’t hold any other coins to offset your loss.
8. Hitting the “buy and sell” button without thorough analysis
As a newbie trader, invest as much time as you can in analyzing the market. Don’t be in a haste to trade without deep analysis.
Yes, at first, analyzing the market might look confusing, but with time, you’ll master the art of reading great books written by experienced traders.
9. Trading on exchanges that are vulnerable to hackers
Before trading cryptocurrency, one of the main things to look out for is a trustworthy crypto exchange. While so many exchanges out there are pretty much vulnerable to attacks, it is important to put security first when making a choice.
As a trader, your money and time come into play here. So be very careful about where you direct your attention.
10. Expecting a lot to happen overnight
This is a common newbie error. As aforementioned, crypto trading isn’t a bed of roses. It’s a skill that can be learned and it takes time to understand. Stop thinking of it as a game or “get rich quick scheme.” It’s not magic or a kind of abracadabra. Be wise.
Ejiofor Francis is an IT/blockchain PR expert and writer with over six years of guest blogging experience. Do you own a crypto/blockchain blog? Here is an ultimate guide on how to create thriving crypto blog. Want to say hi? Here is my email: francis@effectivemarketingideas.com.
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