Most Common Mistakes that New Traders Make – BitBoy Crypto

Crypto trading can be a daunting activity for beginners even when they have made their research. These are their most common mistakes and how to avoid them.

To learn more about how to avoid common mistakes when investing in crypto, as well as how you can participate in the ongoing giveaway, make sure to watch BitBoy’s latest video!

Being Too Invested Doesn’t Always Pay Off

The most common mistake affecting new crypto traders is being too invested in a specific project. While being invested is not an issue by itself but a benefit, as it will usually result in beginners researching and making an effort, it can easily become a problem if not used correctly.

More often than not, new investors will bet everything on a specific trade or an individual project’s success. As new investors are lacking experience and knowledge on market trends, this can lead to a catastrophic result if the bases of these decisions are not solid.

Being too invested also extends to new investors who make crypto trading their sole source of income right away. As they are likely to lose money nd not all coins they invest on being winners before earning experience, such a decision will add an extra layer of emotional investment that could lead to wrong moves.

Investing What They Can’t Afford to Lose

Cryptocurrencies offer a great opportunity for investors to make money, but it is sometimes easy to forget that the opposite is also true. New investors will usually find themselves blinded by partial gains and invest more money than they originally intended.

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Trading in crypto is more about smaller increments in profit than sudden big wins. Investing a lot of money when a project or the market is having a bull run, just for fear of missing out (FOMO), can leave investors with heavy losses if a correction takes place too soon.

Being smart and calculating is everything when it comes to trading successfully, as it allows traders to always consider the worst-case scenario. By preventing their decisions from being the result of emotions, investors are sure to prevent easily avoidable losses.

Not Using Stop-Loss Orders

Stop-loss orders are orders that will trigger and sell an asset should a given price be reached. By using stop losses, a trader is admitting that their prediction was wrong and limiting further losses.

The automatic nature of stop-loss orders is an easy way for traders to prevent losses resulting from drops in value at times when they can’t keep an eye on market movements. They also offer the benefit of allowing them to decide beforehand how much they are willing to lose if a prediction goes wrong.

Stop-loss orders are easy to set up and offered by most exchanges, which means that not using them can only be explained by a lack of research and understanding of crypto investing.

Being a Follower

It is not unusual for new investors to not trust their predictions and research, deciding instead to follow the advice of crypto personalities,  crypto traders, or general trends. While this can result in gains at times, it could also lead them to be victims of “pumps and dumps” or scams.

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Making sure to take their time when researching projects, even if highly recommended by the community, will help traders recognize when FOMO is at play. If the foundations and applications of the projects seem solid, then investing in the token is a good idea.

It is important to note that this does not mean that new investors should always distrust the community, as scams and trusted projects can be spotted by checking other investor’s experiences, but should be wary of acting only based on trust on third-parties.

Confidence as a trader is a trait that will come with time as new traders continue their path in crypto investing, but an investor’s own research and opinions should always be trust.

Holding for Too Long

This mistake can be an extension of being too invested in a project but can also happen in a balanced portfolio. New investors will feel the need to hold to coins that are having a prolonged uptrend, expecting it to continue going indefinitely.

While selling too fast can also be a mistake during an uptrend, holding for too long could result in an investor experiencing losses instead of making small gains. A good idea for new investors is to partially sell their holdings as the uptrend goes on, ensuring increasing gains and preventing losses that could come if a sudden drop comes.

While predicting the right moment to sell will come with experience, new investors need to consider the potential ramifications of holding their portfolio due to expecting a single gain over multiple smaller gains.

To learn other mistakes that can ruin new traders’ experience when starting in crypto, make sure to click here or scroll up to watch BitBoy’s latest video.

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