Not everyone who starts trading in Bitcoins will taste success right away. Some may not even enjoy success after being in the trading world for a long time; this can be because of some common mistakes that they may be making while trading. Seasoned traders are those who have learnt from these mistakes and become experts. Here are the costliest blunders that traders can make:
- Too much of confidence can be dangerous when you are trading in cryptocurrencies. For instance, you may buy a crypto asset trusting your gut instinct and the prices keep going up; you keep doing this with some other crypto coin and the result is the same. This only makes you feel super confident about your decision making capabilities. Beyond a point, this becomes unwise because you will turn complacent and overlook red flags. While having some self-belief is surely desirable, being overconfident can lead you to disaster.
- When you find a crypto asset doing exceptionally well in the market, you are obviously delighted, especially when you had bought the asset at rock-bottom prices. On the other hand if you have not invested in a coin and you find that its price is soaring, the temptation can be hard to resist. The fear of missing out makes you take a decision hurriedly, and in most cases, such hasty decisions do not pay off. The pump-and-dump strategy can be one terrible blunder that most rookies tend to make. The truth is that a coin’s price does not rise without reason; there is usually some positive news by key influencers that causes the surge.
- If you wish to make profits through price surge in coins you have bought, there has to be buyers for this to happen. However, the biggest problem with smaller exchanges and new altcoins is that their order books are very small. While you may be sure that a new coin will succeed, others may not be so sure. So, you risk getting stuck with crypto assets that no one wants to buy. And also, traders have started using automated trading apps which carry out the trading autonomously. Some trading blunders can be averted as you can feed the software to work on its own; go through the bitcoin era review which provides some insights to the working nature of the automated trading bots.
- Revenge trading can be another huge blunder that Bitcoin traders often make. You may be frustrated when you see that the coin you had backed out from investing in has suddenly risen in price. In anger, you then invest everything you have into another coin in the hope that you will be able to gain substantially in this trade. By doing this, you unnecessarily expose yourself to risks because you have made an investment without taking out time for research.
- Overtrading your Bitcoins can prove to be very costly. If you think that by trading more you will profit more, you are sadly mistaken. For instance, you may buy Bitcoins and find that the prices have soared the very next day. You will feel that by selling these off you can enjoy good profits. But selling assets just because you find they are profitable at that moment is an unwise trading decision. The coin is likely to appreciate in value over the next few days.
- If you fail to implement stop-loss orders you can end up losing heavily in Bitcoin trading. When you start out trading in Bitcoins, you are likely to be influenced by emotions. At that time, accepting losses and moving onto more trades becomes difficult. So, it is advisable to have a stop-loss order in place so that even if the trade is against you, you will not be robbed of your savings.