When you say, ‘Cryptocurrencies are volatile’, it is nothing but an understatement as this is the least that you can ever say about them. As compared against forex and stock markets, the cryptocurrency market seems to be moving too fast. There are times when there are noteworthy variations within the course of a single day! Hence, it can be clearly understood that with cryptocurrencies, it is possible to gain a big amount over a short span of time.
Now you must have heard that 90% of cryptocurrency traders suffer losses while just 10% win. But have you thought what the 90% of the traders do wrong that makes them incur losses and what the 10% do in order to emerge as winners?
We’ll cover all those mistakes in this in-depth article, but before that make sure you take a denser look at the top broker’s for trading bitcoin as professionally listed in Trustedbrokerz.com, and learn more what exactly each trained powerhouse can offer you and what active traders have to share about their trading experience.
Avoid blindly following other’s advice
Always remember that whenever there is someone who posts blockchain investment tips, they don’t do it for the noble cause of putting money into your pockets. They could be talking about their own trysts with investment or they could be trying to convince you to buy an asset that they already own thereby making the asset higher in value. Hence, it is necessary that you don’t always listen to the advice of others.
Dumping all your eggs in a single basket is a blunder
Even though you might be a seasoned investor in traditional assets, you can’t let go of the idea that you shouldn’t dump all your eggs in a single basket. Regardless of how much you prefer a specific coin, there are high chances that it won’t play in a way you wish as there are no guaranteed attached with any coin. This is when you begin to see only the profit potential and forget about the risk of the coin. Hence, you should split the risk capital into at least 10 parts so that you don’t have to bet more than 10-20% on one coin.
Don’t average down
Yet another common mistake committed by the traders is averaging down which is purchasing more of the same coin during a price drop. They do so with the age-old logic that buying a good thing when it is cheap is a big profit. What they fail to realize is that you can’t apply such household logic to trading cryptocurrencies. Whenever you purchase a bitcoin, you do so because you are sure that it will rise up in value based on some theory. Hence, when the price goes down, this means that your analysis went wrong and it is the market’s own way of giving you the proof. So, the lower the price of a currency falls, the ‘wronger’ you are with your trade approach.
Do you find the above-mentioned blunders too complicated? If you don’t wish to be subject to a trading debacle, make sure you steer clear of the mistakes that can pull you down as a trader.