A lot of things can happen to your crypto portfolio if you jump into trades without proper planning while considering the risks that could follow. While it can be tempting to grab trades that may seem profitable, you have to set yourself a trading strategy that would help you minimise the losses while maximising the gains for future transactions.
You also have to keep in mind that even though the experience is the best teacher, you should never go with the “go hard or go home” mindset since it can be the reason that can destroy your entire crypto portfolio. One significant mindset that beginners should start thinking about is that they can benefit a lot from looking at how other traders execute their strategies and looking back at their mistakes to learn from them. With that in mind, here are four major mistakes you should never make as a beginner in crypto trading. For in-depth tips on crypto trading, investments, news and price predictions, turn to the new media star on the crypto horizon – BitemyCoin.
Immediately Starting with Real Money
There’s always a first time for everything, but equipping yourself with the necessary knowledge and experience similar to the actual thing can help you get far. Before you rack up the required experience for trading real crypto coins, spend countless hours with paper trading to gain the necessary trading skills.
The main benefit of paper trading, aside from honing skills, is that you lose the risk of losing real money. With paper trading, you’ll get an idea of identifying the best entry points for profitable trades while also having an idea of how to plan your exit points to minimise the loss.
Putting Everything On The Line
One of the major mistakes that beginners tend to make when trading is risking much more than what they can afford to lose It’s a given that no investment is risky, but the logic that cryptocurrency has an outrageously volatile market tends to be overlooked and would rely on luck to get something beneficial out of their action.
Keep in mind that crypto trading requires a lot of time, practice, and patience before you can effectively trade while utilising your strategies and implementing your risk management techniques. Putting everything on the line and trading amounts of money that you can’t afford to lose means you didn’t set a risk management plan nor a trading plan at all.
Not Logging Your Trades
Taking full accountability of your trading activities by recording your trades helps you keep track of your progress as well as to see where you’ve gone wrong in the past transactions that made you lose profit. Most beginners don’t care about tedious matters since they might think there are other important matters they should focus on. What they don’t realise is that the reason why they should log everything is so that they can avoid making the same mistakes that caused them major losses.
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On the other hand, backtracking can greatly help contribute to creating the most suitable trading strategy that you could use in the long run. Another kind of recording that beginners should do is to write down all the possible trades they could’ve done but were afraid to, while also including the actual results.
Copying Others’ Trading Style
Forcing yourself to use other people’s way of trading is extremely challenging to do and almost impossible to accomplish because everyone’s style of trading is unique. It’s unavoidable for a beginner to mimic the way other people are trading because they’re making profits. The only problem with that is people have different experiences, perspectives, strategies, and ways of approaching a trade.
By going back to the basics and taking your time to get used to paper trading, you might get an idea of your unique style of trading. Although it may not be perfect, gaining experience and honing your skills can result in a style of trading that you’ll be extremely comfortable with that will come out naturally.
Crypto trading requires a lot of time and patience; a person with no prior knowledge or experience about crypto can immediately destroy their future of crypto investing if they blindly jump on the bandwagon. While there may be plenty of mistakes to encounter in the future, one should always take note that there are no perfect crypto traders.
Taking your time to execute one step at a time can help you get through trades in the future with ease. Keeping yourself up-to-date with the latest news and trends about cryptocurrency and making sure you’re equipped with the necessary tools brings you one step closer to your goal of becoming a great crypto trader.