FINANCE & MONEY

6 Common Crypto Trading Errors and How to Avoid Them

If you are already invested in the traditional stock market and doing well in it, you might think that the crypto trading strategy must be similar. But that’s where you are entirely wrong.

Many newbie crypto traders use the strategies they used in options or forex trading and bring them into the crypto market expecting similar results. Don’t let this happen to you. Avoid the crypto trading errors listed below and you will be well on your way to a high ROI (return on investment) in crypto land.

#1. Make Sure to Diversify Enough

Are you invested only in one or two coins? Just like you don’t want to put all your eggs in one basket when doing forex or stock trading, don’t invest in only Bitcoin or Ethereum. Explore the market and put your money into at least 4-5 coins.

#2. Don’t Invest in Coins That You Don’t Understand

Many newbie crypto traders will invest in coins that they don’t know anything about. That’s not a good idea, especially since crypto coins are complicated investments. Do some research before investing in new coins – you won’t regret this time spent.

#3. Remember That Crypto Is a High-Risk Investment (Especially If You Are a Newbie)

Just because everyone and their grandmother are into bitcoins (14% of Americans are invested in cryptocurrency) doesn’t mean that it’s suddenly a safe investment. You can still lose your shirt investing in crypto, so be careful when venturing into uncharted crypto territories.

#4. Stop Following the Herd Mentality

Don’t invest in something because everyone else (and Elon Musk) is investing in it. Spend some time considering the various coins available and check out prices (get EOS price here) to figure out which coin would be the best investment for you and your unique portfolio mix.

#5. Stay Away from Penny Cryptos Hoping for a Big Return

Too many people follow the strategy of investing in cheap crypto coins worth pennies hoping that one day it will be worth tens or hundreds of dollars, making them a millionaire in the process. Don’t build your hopes and dreams on crypto sandcastles like that. You would be better off choosing more expensive crypto coins with a brighter future.

#6. Follow Your Gut but Keep Your Investments Small

If something tells you that you should invest in a particular coin, follow your gut, but keep your investments small at first, to test the market. Don’t bet the farm on a gut instinct. That’s how fortunes are lost in the crypto market every year.

How Many of These Crypto Trading Errors Are You Guilty Of?

“The past doesn’t dictate the future.” This adage applies greatly to the crypto market. Just because you committed some grave crypto trading errors in the past, that doesn’t mean that you can’t change your habits now.

Did you enjoy this article? Don’t forget to check out related articles on cryptocurrency on our website and keep growing as a trader.

Hardik Patel

Hardik Patel is a Digital Marketing Consultant and professional Blogger. He has 12+ years experience in SEO, SMO, SEM, Online reputation management, Affiliated Marketing and Content Marketing.

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