Globally, cryptocurrency users exceed 221 million. Every week, there are 24 new cryptocurrencies on the market. Investment funds managing crypto include more than $59.6 billion in assets.
Crypto is booming. As it grows, investors continue to make more and more common cryptocurrency trader mistakes.
You do not want to lose out on crypto trading profits, which is why it is important to understand mistakes made by veteran investors. Here are the five biggest mistakes crypto traders make and how to avoid them.
1. Losing Your Keys
A crypto trading platform has high levels of security, as it helps to access cryptocurrencies that are from blockchain technology. Cryptocurrencies are digital assets that you own with no centralized custodian.
However, since it does not have a centralized custodian, it is up to you to protect your assets. This means safely storing your cryptographic keys for your digital wallet. A private key is not like a PIN or password that you could reset if you lose it or recover it some other way.
If you lose keys, you can no longer access your digital assets in your wallet.
2. Fat-Finger Typo
Typos can harm a trader’s crypto trading profits. Mistyping a decimal or misplacing a zero can lead to tremendous ramifications. To ensure you get the return on investment you hope for, double-check your trades before you submit anything.
3. Using Poor Intel
Anonymous sources from the Internet can put your return on investment in danger. This includes social media.
People will see many traders making a particular crypto investment and it becomes a big hype. Popularity and excellent investments are two separate things. Do your research to make excellent investments, but be careful about following the crowd or deciding solely because people on social media tell you to.
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4. Panic Selling
Do not let fear drive your decisions. A good crypto trading strategy considers the long-term, not temporary dips.
Let’s say you have $2,000 in cryptocurrency, and then it falls in price to $1,600. You panic you will lose all your money, so you sell it. Are you sure that it will not recover?
If you are sure it will not, then you are making an excellent decision. However, you may need to wait patiently for it to pick up. The best thing you can do is perform thorough research and purchase the cryptocurrency you truly believe in.
Decide from facts and not your emotions.
5. Making Too Many Trades
This can be a combination of the common cryptocurrency trader mistakes three and four. You are making too many trades because of poor insights and fear.
While this may be your crypto trading strategy, to trade fast and furious, there is no guarantee of making crypto trading profits this way.
Common Cryptocurrency Trader Mistakes
Avoiding these common cryptocurrency trader mistakes will help you maximize your return on investment.
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