Starting to trade crypto can be a massive learning curve. Whether you’re an experienced trader or a newbie, crypto trading can seem hugely complicated and it’s super easy to mess up in the beginning. Luckily, there’s a lot of information out there that can help you become the crypto trader of your dreams. We’ve compiled a list of the 5 mistakes every crypto trader should avoid, so keep reading to learn the dos and don’ts of crypto trading in 2019.
INVEST IN CRYPTO NOW
Your capital is at risk.
- Stop loss/take profit placement
If we’ve said this once, we’ve said this a thousand times – never ever enter a position before placing a stop loss and take profit order. Find an exchange that offers leverage trading, and learn how to position your orders.
Arguably, the most crucial thing is to learn to spot liquidity pools, so you can identify the resistance and support levels. Only then should you place your orders, just above and below those levels, so you can be sure not to miss out. This is vital to crypto trading to ensure that you don’t get rekt. Seriously, set your stop loss and profit orders.
- Always avoid overtrading
While it might be super tempting to manually close all of your positions when you see that you’ve made a profit or a loss, the best strategy is always going to be to keep your initial position and place your trust in your stop loss/take profit orders. Don’t check your positions all the time. Trust your strategies to do the work.
- Diversification
Sure diversification is a good thing, but everything in moderation right? The cryptocurrency market is pretty volatile, so be careful spreading yourself too thin over altcoins with small market caps, instead of focusing on a few larger coins. Always do extensive research before trading in any altcoins (if you’re really not sure, top traders recommend sticking to small amounts of Bitcoin, Ethereum, Ripple, and/or Litecoin to start).
- Putting too much money in too soon
Most of us start with pretty humble beginnings as traders, and that’s totally fine. However, trading above your means is one of the top rookie errors that a new trader can make. Emptying out your savings, or even taking a loan (Yes, people do this), is just a bad idea. Nobody is immune to making mistakes, and even professional crypto traders can be subject to losses.
Even if you think you’ve done enough research, making too risky moves that could cost you a lot in the early days, is just not a good idea. Rather trade with smaller amounts, build your way up slowly and minimize the consequences.
- FOMO
We think that the top mistake, out of the 5 mistakes that every crypto trader should avoid, is giving into FOMO (the fear of missing out). New crypto traders are particularly susceptible to this, however even the most experienced trader can fall prey to it. Whether it’s in situations where you sell an asset too early because you’re afraid of making a loss, or even buying into sketchy projects just because somebody you know deemed it as the next great project, FOMO is never good.
Luckily, you can resist it. Have patience, follow your strategy, and only trade with coins that you know are reliable, with money that you have.
INVEST IN CRYPTO NOW
Your capital is at risk.
The real FOMO will kick in when Bitcoin reaches $10,000.
— Crypto Sara 👸🏽 (I also like Bitcoin so GFY) (@AltcoinSara) May 30, 2019
The key to trading crypto
Now that we’ve had a chance to take a look at the 5 mistakes every crypto trader should avoid, we have to ask ourselves: What exactly is the key to trading crypto?
That’s pretty simple: Patience. Don’t be afraid that you’re going to miss out on the next big thing. The crypto market is constantly growing and changing and there’s more than enough investment and trade to go around for everyone. Don’t invest in altcoins that you aren’t sure about, don’t give into FOMO, and don’t trade above your means.
If you want a fantastic resource for crypto trading, check out eToro. It’s a social trading platform that allows for easy and safe crypto trading.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.