As cryptocurrency grows in popularity, the desire to get involved in the crypto space increases, no one wants to be left out.
What is not popular, especially to newbies is that the market is not as rosy as it looks.
There are so many ups and downs and the craziest part is, as a trader, you can be your stumbling block.
In today’s guide, we look at the 5 Pitfalls every New Crypto Trader Should Avoid.
Sounds like a beginner’s note, but this goes beyond starters guide, it can also profit those already trading in the market.
The idea of cryptocurrency is one we cannot stop appreciating, even in its volatility, it has changed the financial space a lot even as we await more its adoption.
Trading different cryptocurrencies can fetch you millions within a short period, but, it can also render you penniless if you are not careful enough.
Does that make it a scary space? No, it simply implies that as a trader, you have got to know what you are doing.
Here are 5 Pitfalls every New Crypto Trader Should Avoid to stay profiting from the market.
5 Pitfalls every New Crypto Trader Should Avoid
1. Trading without learning
It’s like trying to drive a car on a busy road without any form of training at the same time hoping to do a good job. Never going to work.
It’s so easy to take out some cash, exchange for some dollars and hop into the market, what you are not always told is that, it is easier to be thrown out of the market than it is to enter the market.
As a beginner, your first target should be to understand the market, learn how the space works; get used to how to analyze tokens, what causes what and why.
You should only trade when you have been equipped with the right knowledge.
At this point, you understand what is going on in the market, what to expect from the market and how to react.
Without this, you may last No longer on the market than it took you to get in.
The key to becoming a successful trader is your level of knowledge about the market.
Study the market first before actively starting.
2. Stacking what you cannot afford to lose
It’s always advisable not to go into the market (trade) with what you cannot afford to lose; the reason is that the market can go either way.
Sometimes, to your favor, other times, against your expectations, if you stake, what you are not capable of losing, you may be forced to take out your trade earlier than you should.
Don’t go into the market expecting it to be rosy at all times, the volatility of cryptocurrency is quite huge, it can swing in your favor at the least expected time.
Be ready for it, if you intend to go into the market, ensure you are prepared for the worst possible outcome.
3. Borrowing to trade
Among the 5 pitfalls every New Crypto Trader Should Avoid on our list, borrowing to trade is one you must avoid just like you avoid death.
If you must trade, ensure you are not going into the market with a borrowed funds.
You are well aware a lot can go wrong in the market; it is better you lose what you own than lose what you are to pay back.
Do not make such a mistake, it could be costly, though it can as well go the right way and work for you, we are not ruling that out but it’s a risk better avoided than taken.
Well, if you are that good and sure of your return (but who is?), you can take such a risk, you just know we do not encourage that, it could prove costly.
4. Being emotional
One of the easiest ways to get done by the market is by being emotionally driven from the market.
You are well aware that the price of cryptocurrencies changes constantly, the prices could be influenced by financial, environmental, political, and natural activities around the world.
To get the best out of the market, you must be fact-driven, not emotions, why?
A single government policy can get the market swing against your expectations.
Facts provide you with proves to make better decisions, emotions becloud proper judgment.
Be logical, factual, not emotional!
5. Being greedy
Might sound funny, being greedy is among the pitfalls every New Crypto Trader Should Avoid.
The sole aim of trading is to make a profit, no one enters into the market hoping to lose.
To get the best out of the market, you need to understand when to get in and when to get out of the market, be greedy to make a profit but not greedy to get done trying to take an all-out risk. You must learn how to manage market changes.
Wrapping up 5 Pitfalls every New Crypto Trader Should Avoid
As a beginner, you need knowledge of how the cryptocurrency space work more than the trading funds, a proper understanding of the market keeps you longer in the market.
You must, therefore, learn your way around the cryptocurrency space, how to manage risk and make a profiting trading decision before starting out.