We have all been there!

I am sure those of you who have been involved in cryptocurrency for a while remember what it is like being new to crypto and being overwhelmed by the complexity and choice of cryptocurrencies. I remember it well, since it was only about 14 months ago, it is was easy to get lost in jargon that doesn't mean anything to you yet. This is our most vulnerable time and the time we are most likely to make horrible choices that lead to either loss or not unoptimized profits. I have decided to write a short list of the top 3 mistakes I see quite commonly among newbies.

1. Investing in the cheapest coins!
   You would think it makes sense, right? Bitcoin and Ethereum is so expensive, surely (insert worthless coin here) can grow more! Well, no. Or at least probably not. There are many things that determine the current value of a cryptocurrency and even more things that determine the future value. The most obvious factors are availability and demand, if there are more people buying than selling, then the price will go up, and if there are more people selling than buying the price will go down. So should you just search for coins with more buyers than sellers? No! that should not be your only metric in deciding to purchase a crypto. You should consider the current market cap, is there a lot of coins already in circulation? Is the amount of sell orders disproportionately high in comparison to other coins in a similar price range and market cap? You should look at what the coin is linked to tech wise. Does it have real world applications? Does the technology offer any unique selling points? Lastly you should check how long has been in circulation, is it old but still borderline worthless? That could be a sign, there are obviously exceptions to this, of course.

2. Panic Selling!
   This one is probably the most common one, inexperienced people will see their coin drop 20 points and start to panic. Never panic sell! If I would say I could only abide by two rules, it would be never buy high and never sell low! The nature of any asset, be it crypto or not, is that there is variance. Volatility is normal and is actually your friend when you start to get the hang of trading. The golden rule when it comes to any financial decision is to make it with your head and not your heart! Emotions will get in the way of making a profit and fear and panic is the worst one!

3. Not diversifying!
   Spread your risk! I don't care what anybody says, going all in is always a very risky play and one I see way too often. No matter how big or small your portfolio is worth, spreading your investment is a good idea.

Conclusion

Newbie mistakes are common, but as time goes on and as more and more information is put out there by creators, less people will fall into these traps. Newbies are lucky to have steemit and other excellent sources available to them.

Please comment, follow and upvote!

Happy Mining,

Viking