7 main mistakes of new traders List of deadly crimes committed by new traders
So far, you have created a new account, purchased your first Bitcoin. You are now prepared to become a trader in cryptocurrencies. You frequently trade on an exchange where the price of the first coin you purchase increases by 10% before you sell it. Self-satisfied that you did it. Using the ingenious "Buy Low, Sell High" method, you are advancing: a Twitter account. There is already a crowd of new employees awaiting your calls. It was going so well until you committed one of the following rookie errors.
1 - Waiting Pump and Dump
Observing a green candle that rockets up into the sky is one of the most beautiful sights a trader can see - if they purchased at the bottom. However, without a horse to race, envy might be overwhelming. You will experience lapsed profit syndrome and attempt to wager your entire bankroll. Occasionally it will pay off, but more often than not it will place you in an awkward situation.
A quick price swing in cryptocurrency is not always indicative of a pump-and-dump scam. Positive news or a major influencer's promotion might also result in exponential growth. Before purchasing a coin, it is essential to comprehend why its value is soaring. If not, you risk failure. Many inexperienced cryptocurrency traders try with pump-and-dump organizations that guarantee rapid gains with minimal effort. Failure once or twice will be sufficient to learn the lesson and pursue more intelligent trading tactics.
2 - Buying in illiquid markets
For your coin to continue increasing, someone else must want to purchase it. The issue with numerous developing altcoins and numerous tiny exchanges is that they have a dearth of orders. You can be certain that Sprouts (SPRTS) is the future of crypto, but if a sufficient number of traders disagree, you risk focusing on a currency that no one wants to purchase, or at least not at a price that you are willing to pay.
There is nothing wrong with long-term investment in a coin whose fundamentals you respect. However, these "undiscovered diamonds" are prone to a lack of liquidity in the short run. Traders who have grown weary of waiting for a coin's price to rise may be compelled to sell drastically below their desired price.
3 - Set the incorrect price
Raise your hand If you've ever missed a zero on a trade setup and your coins surged, set your sell order 10 times lower. This is easy to accomplish when dealing with altcoins that are priced in fractions of Bitcoin: you think you're making an order to sell 0.0000457 BTC, but you've actually placed an order to sell 0.00000457 BTC. The majority of exchanges will rise to the maximum rate. However, services like Etherdelta are not as user-friendly as others. Always double-check the buy or sell price before pressing the execute button.
4 - Transferring the incorrect coin to an exchange's wallet or use wrong chain
If you sent Bitcoin Cash to a Bitcoin wallet by accident, do not expect the exchange to bail you out. However, the larger exchanges are unlikely to be of assistance. You must exercise caution before sending funds to the wallet, as errors are nearly impossible to rectify. Sending Ethereum tokens to an Ethereum exchange wallet or requesting a mining pool payout directly to an exchange wallet are other rookie errors. Avoid doing that. The greater your trading motivation, the better you will become.
5 - Revenge of trader
You are unhappy because you refused to purchase a coin at the last minute, and then it flew to the moon. Or you purchased a worthless certificate - a sure loser - and it failed. Infuriated, you wager your entire fortune on the next green coin and attempt to ride this train to Profitville. In doing so, you overestimate your abilities and enter a market you have not yet explored.
Where do you enter and exit the market? Why is the coin's value increasing? You are ignorant because you act based on your feelings. Revenge trading is analogous to capturing your partner in the arms of another person and then grabbing the first item you discover. Nine times out of ten, it will end in tears. The greater your ability to detach your emotions from your trade, the more successful you will become.
6 - Overactivity
Too many chefs will destroy the broth, and too many traders will diminish your earnings. This is a simple trap to fall into, and every new trader does it. The day after purchasing a coin, you check to see if its value has increased by 20%. Isn't it preferable to sell and earn a profit? Not required Cut off your losses and let your winners run, as the adage goes.
A basic trading approach that can deprive you of some of your greatest rewards is selling assets for the sake of profit. There is nothing more disheartening than selling a coin for a tiny profit only to discover that someone else paid 10 times as much. Additionally, excessive activity for minimal income will result in an increase in assets conserved through exchange costs.
In certain ways, hyperactivity that generates tiny earnings is advantageous, but these profits will be consumed by commissions on any exchange. You comprehend the outcomes yourself.
7 - Self-confidence
Intuitively, you purchase a coin and observe its value double over the next week. You repeat the procedure with a second coin and the same result occurs. You are fantastic. You are a man. You convert everything you touch into gold. You are staking your next decision on boldness, which may feel like flying to the moon. Then... one loses everything. What occurred? You are impudent, that is what.
A little self-assurance is wonderful; it's what enables traders to go against the grain and make their own conclusions. Conversely, over confidence is a formula for disaster. When you disregard warning flags while feeling invincible.
Eliminating these seven fatal errors does not qualify you as a professional trader; years of expertise, late hours and early mornings spent watching two monitors and creating charts are still required. Nevertheless, if you eliminate your rookie errors, you may survive long enough to become a pro.
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✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
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