Most of us had no idea what we were doing in trading when we bought our first cryptocurrency. Some of us even spent months trying to make sense of those red and green lines on graphs. Some people mastered the art, while others failed terribly.
It is reasonable to say that many of us, including the author of this post, made rookie blunders in this market. Mistakes are teachable moments – the unavoidable lessons that help you become a better trader.
We wish to avoid newcomers making the same mistakes we did. Here is a list of six common crypto blunders to avoid as a novice!
Mistake 1: Trying to Get Rich Quick!
The first major mistake that many new traders make is entering the Crypto Exchange Platform with the expectation of quickly becoming wealthy. The getting-rich part only happens to a small group of traders who enter the market at the start of a bull run. Many people who enter the market with this mindset, in our experience, lose more than half of their cash within a few months because they do not depart on time.
That is why true crypto gurus usually stress, “don’t invest what you can’t afford to lose.” Cryptocurrency isn’t a get-rich-quick scheme. You must first embrace the dangers involved and recognize that your investment will take a long time to yield rewards.
India Buy Cryptocurrency is not a gold mine that will turn you into a millionaire overnight.
Mistake 2: Trading Without a Strategy
Another common mistake is for new traders to enter a transaction without a plan. If you buy a coin with the expectation of making rapid money, there is a chance that the trade will go against you.
Frequently, rookie traders fail to account for this circumstance and are forced to improvise when a trade goes bad. Having to improvise in a losing trade is the last thing you want to do, as emotions will considerably distort your judgement. To avoid this, enter a transaction with both winning and losing situations in mind. This eliminates the need for improvisation.
Nonetheless, keeping to your plan will be quite difficult. The only way to improve in carrying out these plans is through practice. Trading necessitates a strong attitude.
Mistake 3: Trading with a Larger Position Size than Necessary
Many novice traders enter the market and spend everything they have on an altcoin. When a trade fails, they are liquidated. This is common in the futures market, when newcomers use huge leverage on their transactions with no stop-loss.
When the market swings against you, you must sometimes choose survival before profit. It is preferable to close deals on sometimes so that you do not lose more than a few percent of your capital. Taking less risks allows you to trade more objectively and protects you from market events.
A lower-risk method will limit the size of your profits, but as previously said, Cryptocurrency Indian Exchange is not a get-rich-quick programme. Slowly build your account; the compounding effects will kick in soon.
Opening a trade because “the market has to reverse eventually” is mistake number four.
Many new traders attempt to trade against strong trends because they believe they are oversold. In such circumstances, keep in mind that the price may continue to move in one way for much longer than you believe. If you want to learn more about going against the grain, look at mean-reversion tactics. They can be really profitable if you know what you’re doing. Do not swim against the tide if you have not yet arrived.
Mistake 4 : Imitate Trading Influencers
Many people prefer not to discuss this delicate subject. But bear with us! If you want to be a successful trader, you won’t get there by imitating others. Furthermore, if you elect to copy trade, you will be completely dependent on the trader you follow. There are an infinite number of things that could go wrong — things beyond your control.
The only way to avoid this is to Buy And Sell Cryptocurrency In India using your own techniques, which is exactly what you should do if you want to succeed in this game. Put in the work to improve, or choose a more passive method, such as dollar-cost-averaging or staking.
Mistake 5: Constantly Changing “Systems”
During the first few months of your trading career, you may be desperate to find a system that works for you. As a result, many traders find themselves switching between several types of analysis and indicators in search of the golden ticket.
These abrupt changes in tactics will set you back. It takes time to design and refine a system so that it works for you. If the indicator does not function in the first few transactions, it does not mean it is useless.
If you want to create a viable trading system, you must first completely comprehend it. Investigate how prices react to the indicator and look for trends in price behavior. You will eventually find something that works. If that doesn’t happen, you can always try something else. The key to solving this error is to give tools the time they require to prove their worth.
Mistake 6 – Attempting to Trade News
Many rookie traders observe that the market reacts aggressively to major news events and are naturally driven to attempting to trade news as it drops. While news can provide good trading chances, nailing it takes a certain type of talent.
In general, rookie traders are better off avoiding Crypto Trading Apps In India in response to news. Most news, in our experience, is already priced into the market when it hits the press. For example the price drops immediately after the announcement and then swiftly returns to its pre-news level. This demonstrates that people react to news, while the market seems unconcerned.
Final Thoughts
These were the most common errors we could come up with. The majority of these errors were committed by the author. It is preferable to admit your mistakes and learn from them. We hope you learnt something new today and will apply what you’ve learned to sharpen your saw.
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