cryptocurrency trading

5 mistakes that you should avoid in crypto

Daksh Murkute | | |

Okay. Let’s face it,

 

In the last few years of my crypto trading journey, I have done several worst things and some of them have been extremely costly for me.

 

So, in this blog, I'm going to share with you the top five worst things that I've done in the last few years, which you should avoid at all costs.

Contents

1. Mistake 1

2. Mistake 2

3. Mistake 3

4. Mistake 4

5. Mistake 5

 

The one thing I have learned in my school was that mistakes are bad, and I was punished for making them.

 

But today when I look back, I realised that we humans are designed to learn, and we learn by mistakes. We learn to walk by falling. If we never fell, we would never walk.

 

And in this blog, I'll tell you about a few of the times I've fallen for.

 

1. Purchasing a coin because it was very cheap

 

Purchasing a coin because it was very cheap

 

Now, the first worst thing I did during investing was purchasing a coin because it was very cheap.

So, when I first started investing in crypto, my primary goal was to become wealthy quickly.

 

Every night as I lay in my bed, I had the thought that when I woke up the next morning, the cryptocurrency I had purchased would have grown hundreds or thousands of times.

 

And to reach this goal, I didn't get coins that are worth hundreds of dollars; I knew they didn’t go a hundred times.

 

Instead, I looked for coins worth a few cents or much less than a cent, believing that they had the potential to multiply hundreds of thousands of times.

 

And also, because they are of few cents, I can buy millions of them.

 

But today when I retrospect on this strategy, I see that most of the coins that were extremely cheap at that time are no longer available in the market. And because of that my investment in such coins has now become worthless.

 

So before investing you should understand the market cap and price of that coin and always do your research before investing in any such coins.

 

2. Buy high and sell low

 

Buy high and sell low

 

The second worst thing I did was buy high and sell low

 

So it did happen to me. When the price of a coin went up, I thought it was a good idea to buy So in a hurry to be a part of the race, I spent too much money on the coin when the coin was worth a lot. And when the price drops, I get scared and I cannot hold on to my investment because I had no clue about how its fundamentals.

 

At that time, I had the attitude of going with the flow of the market and that pushes me to sell below its price range and suffer losses.

 

I think buying high and selling low is a common mistake made by most retail investors, and also it is one of the reasons why investors do not earn from trading or investing. So, my piece of advice is to try to figure out why the price of a particular currency is suddenly rising before investing in it.

 

3. Investing a large sum of money at one time

 

Investing a large sum of money at one time

 

Now the third mistake I made during my initial days was investing a large sum of money at one time.

 

So it happened one summer a few years back, at that time the market had suffered from a drop, and on that dip, I decided to put my money on some coins. But my mistake was that I spent all of my money buying coins, and that too in a very short time. Because of that, when the price fell again, I found myself with no money in my hand.

 

So, instead of getting much cheaper coins, I was stuck with the first price I saw.

 

At that time I learned that the crypto market is very volatile right now and if you are a beginner, you should keep an eye on the prices all day to figure out when to invest your money. You should also divide your liquidity into multiple phases of the investment to get more security for your investment.

 

4. Put all my money into one coin

 

Put all my money into one coin

 

The next worst thing I did at my initial time was put all my money into one coin

 

And the problem with this approach is this. When you put all of your money into a single cryptocurrency, you are completely at the mercy of that one cryptocurrency. If that coin fails or its value falls, you will lose the majority of your investment. And because you have invested your money in this coin only, you will not have any additional coins to compensate for your losses.

 

So it is a better approach to spread your investment in multiple coins. For example: put some in stablecoins, some on layer one blockchains, and some in DeFi sectors or games. And stay away from choosing the one lucky coin that will make you rich overnight.

 

Also Read: Adax (ADAX) - A Complete Beginners Guide

 

5. Tried to time the market

 

Tried to time the market

 

And the last but the biggest mistake I have made was, I tried to time the market.

 

See, one of the most common mistakes people make is, that they are trying to time the market. I did the same thing because I thought I could buy coins at the lowest possible price and sell them just as the price began to fall.

 

As a result, I keep an eye on the price chart throughout the day. But after losing a lot of money in this process, I realized that no one, especially small investors like us, can time the market perfectly. 

 

The only people who can time the market are those with inside information or whales. So instead of timing the market, you have to set the price target to buy or sell your coins, and when you hit your target take the profit and leave. And always stick to the plan.

 

There is a saying which says, Always learn from the mistakes of others; experimenting with yourself will shorten your life. And we all make mistakes, have struggles, and even regret things in our past. But the thing which I have learned is you are not your mistakes, you are not your struggle.

 

You are here with the power to shape your present and future. So you just have to do your work.

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