Like trading stocks and commodities, cryptocurrency trading relies upon solid strategies and fundamentals. Cryptocurrency is all the hype in the financial segment, now acquiring attention from even people who are the lowest of the financial spectrum. Also, there is a question that some people are asking about whether bitcoin can benefit the poor, and discussions are available online. If you ever consider trading or investing in bitcoin, look at things you must avoid.
Not doing thorough research:
Cryptocurrency trading is not like your ordinary stock market trade. Unlike the stock market, cryptocurrency does not have any centralized bodies to regulate or exercise control. This distinction makes cryptocurrency extra risky for new investors to make a trade. One needs to know the indicators that bring down the price of cryptocurrencies, acceptable cryptocurrency exchanges and listing sites, and the best time to sell or buy cryptocurrency.
Trading without any good goal:
Any new investor who gets into the cryptocurrency market without a good goal might not be able to sustain and make it to the end. Goals like increasing your investment capital, making a profit, investing in altcoins safely and securely, etc., will help you make sound investment decisions.
Over-focusing on technology:
Technology will never beat the basics like supply and demand law or the fundamentals of cryptocurrency trading. To be successful in this volatile market, one must focus more on these fundamentals than the underlying technology behind cryptocurrencies. Cryptocurrency is still a very young market, and many things are yet to develop as per expectation.
Not being patient enough:
Bitcoin is an exceedingly volatile cryptocurrency, and it takes 10 minutes to mine a complete set of 6.25 bitcoin. But it’s still the most valuable digital commodity today in the world of cryptocurrencies. As such, any rise or fall in prices can be highly significant for investors who are not patient enough in their investments; gains from this rising digital asset can be huge within a few hours rather than years. But, on the other hand, if you are not patient enough to wait for a reasonable price for buying or selling, then all your efforts will go in vain, and you will end up making losses.
Not being cautious:
While making any cryptocurrency trade, it is necessary to be very careful in choosing the proper cryptocurrency exchange and using the best security measures. Unfortunately, security breaches are common in this field, due to which many investors have lost their money.
You should find out a reputed and trustworthy cryptocurrency exchange from where you can trade cryptocurrencies without any worries. Quick research can give a lot of information on how safe any particular exchange is reliable or safe.
Always buying in when prices are high:
The cryptocurrency market is highly volatile, so prices fluctuate a lot. Therefore, you must not make investment decisions on the high price of bitcoin or altcoins as these high prices are just temporary and not a good sign for the future. To avoid such risky situations, it is suggested to conduct thorough research before going for any trade-in in the cryptocurrency market.
Not clearing the basics of Trading:
Before starting Trading in cryptocurrency, you should clarify basic trading concepts like margin trading, delivery options, candle sticks, etc. These must be well known by you before starting any cryptocurrency trade or investing.
Use a reputed cryptocurrency exchange:
Avoid taking more than your target investment amount:
When you decide to trade cryptocurrency, it is better to keep tight control on your investment quantity. For example, if you want to buy any crypto coin, it is recommended that you should invest only up to one-fourth of your total holding in cryptocurrency.
If you are not knowledgeable about the market and fundamentals, it isn’t easy to make correct decision-making for your investment. You will make the wrong decision for your future investments if you do not have enough knowledge of the basic concepts of investing and trading cryptocurrencies.
Never pay attention to FUD:
FUD or Fear, Uncertainty, and Exaggeration is a subjective thought process in which negative news or events are exaggerated or distorted with extreme views to create an emotional reaction. The crypto market is highly manipulated, and news about FUD sometimes influences the typical investor’s decision. However, the market analyst does not believe in these FUDs and thinks outside news has very little to do with the price movement of any cryptocurrency.
You must have a thorough knowledge of the fundamentals and advanced concepts to make suitable investments. Unfortunately, the mainstream media often follows the buzz created by FUD to justify their own opinions; you must block this noise if your heart is set on investing or trading cryptocurrencies.