Crypto Trading Mistakes - How to Avoid

A bear market can be scary and brutal for investors who have not experienced such dreaded cycles. If you lack the knowledge of a crypto bear market, your emotions can sway you into making trading mistakes. Compared to traditional stock, the swings in crypto can be more volatile.

Avoid making panic decisions

Panicking during a crypto bear market leads to feelings of anxiety and fear, making you lose control over your emotions. This causes you to make impulsive decisions. More often than not, these panic decisions lack logic and common sense. Ensure you make decisions based on objective merits. Do not let aggressive selloffs worry you.

Don’t Get Attached to Your Bag

This is the opposite extreme of panic selling. Sometimes, it is important to recognize a bad investment and cut your losses. Many investors get too attached to their bags. Hence they choose not to sell despite seeing a complete shift in the narrative and the market’s interest.

Do not time the Bottom

They say that the bear market is the perfect time for a long-term investment. However, another common mistake potential investors make is trying to time the bottom. Instead of timing the bottom, you should consider dollar cost averaging your position. This will bring your average entry price closer to the bottom while minimizing the risks of losing the opportunity to invest.

Prioritize your health

Watching your existing portfolio go down can be emotionally and mentally draining. It will eventually take a toll on your mental and physical health. Remember, no amount of money or crypto is worth putting your health on the line. Take care of your sleep, diet, and physical health as well.

Avoid overtrading

Overtrading, or impulsive trading, is not all too uncommon either. After taking a big hit in their portfolio, investors often try to scalp any short-term rallies during the bear market. Remember that there is no room for your emotions when it comes to trading crypto. Do not let FOMO get the best of you!

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