The world of the crypto space that always makes sure that it promises you high returns and profits due to its volatility has really attract a whole lot of traders all around the world. As much as it promises good returns, I have come to discover that there are a whole lot of mistakes traders make in the journey in the crypto space which they should not make actually.
Today I will be talking about five of them so that we can actually see and learn from it and in order for us not to make the same mistake again if you are a trader trading this.
- 1 Neglecting Proper Research and Education
The first I will say is the fact that people did not always have proper research and education about how the crypto space actually. They just actually jumped into the train of the Crypto space probably because of what they have heard about the crypto space and the fact that it can make them millionaires over the night. So a whole lot of people didn't really know how it works before entering it actually. The crypto space is really complex and needs to be understood.
Understood in the aspect of the basics. A whole lot of people need to learn the investing and how the cryptocurrency really works. They should know what coins they are interested in and how those coins actually behaves not just getting into any coin anyhow. Not only understanding the basics but they also need to learn how to analyse the market trends. They really need to develop technical and fundamental skills in analysis so as to know how the market performs. A whole lot of people lack this.
- 2 Falling for Scams and Frauds
The second mistake I will say a whole lot of people make is the fact that they fall for scams and frauds and that I will say is due to ignorance. What do I really mean by that. A whole lot of traders fall victims of fake ICOs and a whole lot of Ponzi schemes in the crypto space and that is actually due to ignorance.
Ignorance has really make a whole lot of people not to actually recognise the red flags as it ought to so making it difficult for them to identify scams that can lure investors with a whole lot of opportunities. Some people are not able to see that those scams projects lack transparency.
- 3 Overtrading and Emotional Decision-Making
The next one I will like to talk about is definitely making decisions during their trading journey making use of emotions. I said it in one of my post weeks ago where I addressed emotional trading. The Volatility of the crypto space in as much as can really bring a whole lot of profits for you, it can also lead to a whole lot of loss for you and most of the time due to the fact that a whole lot of traders cannot control their emotions, they result in overtrading.
Not only the aspect of overtrading but also the aspect of FOMO has really affected a whole lot of people. FOMO and FUD. Fear of Missing Out (FOMO) and Fear, Uncertainty, and Doubt (FUD) has really make a whole lot of traders not to be able to control their emotions and result into taking wrong decisions at the end of the day. One of the ways to actually curb this is by developing a strategy and trading plan.
- 4 Ignoring Risk Management
The next one I will like to talk about which one several occasions I also have been guilty of several times is the fact that a whole lot of traders actually ignore risk management. In your trading journey, you should understand that risk management plays a very fundamental role in Sustaining the decisions you will be taking.
Risk management involves you setting stop-loss orders so as to guide your entry from making a massive loss. Not only that, but a whole lot of people always ignore the importance of diversifying their portfolio most of the time. It is really dangerous to put all your eggs in one basket.
- 5 Disregarding Security Measures
The last mistake I will like to talk about before rounding up is the fact that a whole lot of people actually ignore the security measures making them open to hacks, theft and at the end of the day, they might actually lose their funds. One of the ways to actually curb this that a whole lot of people have really ignored is making use of hardware wallets.
-Master Your Mind, Master the Market: Understanding Emotional Trading
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Thanks for saying or telling us mistakes that should be avoided, in crypto space, especially I feel emotional trading we lead one to reckage
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There are a whole lot of mistakes that people make in trading and all what you have said is true. And that is the reason why we must really be very careful of the decisions
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Amira makes many mistakes when trading crypto. You have highlighted one of the 5 mistakes among them. We have to avoid them only then we can be successful in crypto trading
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