Top 7 errors in crypto trading. On what newcomers stuff cones?
So, you created an account on Binance, bought a pair of Satoshi Bitcoin and half litecoin. Now you are ready to become a currency trader. Before you even realize it, you find that one of the coins has soared by 10%. You understand what this market has done. And how many conversations were ...
You are inspired by the strategy "Buy at a minimum, sell at the maximum" and already present your path: the blue bird of the Twitter account, a bunch of supporters and fans waiting for your predictions ... and of course, the convertible at the entrance.
And then you begin to miss the blows one by one
Everything should turn out this way, until you start making mistakes (one after another) of each novice cryptotrader.
Deadly sins of the cryptotrade
Having studied the following observation, experienced traders will grin. But which of them, honestly, will say that he did not and did not feel this? Who recognizes himself?
Jimmy Song published on his Twitter list of 7 deadly sins of the cryptotrade:
7 Deadly Sins of the Cryptotrader
Pride is the non-acceptance of one's wrong.
Greed - as a result, you will give money to scammers.
Anger is buying / selling on emotions.
Envy - envy the growth of other coins.
Lust - investing in bullshit, which you do not consider promising in the long term.
Laziness - do not delve into the essence.
Deception - lying to yourself, because you have already invested.
In principle, this could be terminated, since all errors not only of young but also experienced traders are built on this list. But the "green" traders suffer more often. And here are the consequences of the sins listed by Jimmy Song, the most fatal.
Dependence on graphs
Observation of the green vertical column is probably one of the most enjoyable occupations in the world, especially if you invested at its foundation. However, if in this race there is no your horse, then envy can play a cruel joke. You invest in a growing asset, often - for all money. Perhaps this decision will become profitable. But, sooner or later, you will be left with nothing.
Crypto currency, suddenly swinging in price, is not always a sign of a pampa or dump on an equal place. Often positive news or promotion in the service of one of the influential persons can lead to a price change. It is important to understand why the coin will grow quickly, before you buy it and start growing. Otherwise, you risk getting a shoe on the head. Many novice traders are experimenting with popular pampa groups that promise incredible profits for a short time. If you are smart enough, after one or two burn-out in this game, you will remember the lesson and begin to learn more profitable strategies.
That's what all the legendary Pump channels are.
Buying in illiquid markets
To make your coin go up, she needs someone else to buy it. The trouble with many emerging altcoyins and many small exchanges is that their lists are incredibly short. You can be sure that Sprouts (SPRTS) is the future of the crypto currency, but if a sufficient number of other traders do not share your opinion, then you run the risk of remaining with a coin that no one wants to buy, or at least not at the price, which you imagine.
There is nothing wrong with buying a coin, the model of which you liked in terms of long-term prospects. However, in the short term, such "non-cut precious stones" are very susceptible to liquidity. You can just get tired of waiting for the coin to grow and you will sell it much cheaper than you had hoped.
Wrong price writing
Raise your hand up, who has ever accidentally incorrectly counted the number of zeros when placing an order and registered a price 10 times lower than the market price? Your coins flew to the new owner in the same second ?! When you deal with altcoyins, which are estimated in thousands of Bitcoin, it's easy to do. You think that you are placing an order to sell 0.0000457 BTC, and only then do you find out that you actually placed it at the level of 0.00000457. Most exchanges have a protective mechanism against such errors. However, not all. Always check the purchase or sale price that you set before you press the Enter button.
In November, the user of Gdax sold 3 Bitcoins at the price of Litecoin
Revenge and emotion
Are you angry because at the last moment you refused to buy a coin, and then she "flew to the moon"? Or have you already bought a dead coin and you realize that only a small part of the invested will be returned? In anger, you put everything on the first green coin that you find and try to ride this train to Profitville. At the same time, you overestimate your opportunities and go to the market, which did not even investigate.
What are your motives for entering and leaving? Why does the coin grow in value? You have no idea, because you act on emotions. In 9 times out of 10 everything will end badly.
Sending the wrong coin to the exchange purse / exchange
If you mistakenly sent Vitcoin cash to Vitcoin's purse, do not expect that the stock exchange will fix everything. Some will go to meet you, but not all. You are responsible for sending funds to the exchange purse, because such an error is almost impossible to correct. Another example: beginners are often asked to send a fee for mining directly to the exchange / exchanger.
Superactivity
Just like many chefs spoil the soup, so many deals spoil your career trader. This is a very common misconception of a newcomer: you buy a coin, and, waking up the next day, you find that it has grown by 20%; you immediately want to sell it and feel the profit, do not you ?!
The sale of an asset simply because it has already made a profit is a simplified trading strategy that can deprive the biggest profit in life. There is nothing more unpleasant than watching a coin do 10X after you sold it with a 20% profit. Also a huge number of transactions "eats" the profit with the help of commissions and fees.
Self-confidence
By chance, you buy a coin, and it grows two times in a week. You do the same thing with another token. The inner voice screams:
You're a super trader! Everything that you touch turns into gold!
Launching the rocket on the moon was unsuccessful ?!
As a result, you are fully invested in the next launch of the rocket to the moon, but ... it is canceled! What happened? You're just insolent, that's what. A little self-confidence is great, this is what allows traders to go against the flow and make their own decisions. On the other hand, excessive confidence is a sure sign of a catastrophe.
Eliminating these mistakes of the novice trader will not make you a capable crypto-investor. There are still dozens of sleepless nights ahead of you in watching the charts and studying the literature. But! Forewarned is forearmed. Perhaps these tips will simply help you survive in the industry and wait until you become a cool trader.