When crypto newbies start investing, at the back of their minds they are looking to make the best out of trading, this may lead them to make some irrational decisions that may become big mistakes that cost them a lot in their investment journey.
At KOYN, we want all our traders to make the most profitable trades from selling crypto for cash so this article highlights those mistakes you might be making as a new crypto investor and will guide you on what to do to avoid them.
Here are the 10 Biggest Mistakes;
1. Not choosing the right crypto exchange platform:
Before you begin trading, you need to choose a cryptocurrency exchange to sign up with. Unfortunately, this first step is one that many beginners rush into and it can be very costly down-the-track.
Here are some of the important things to consider when choosing the right exchange for your individual needs:
- Simplicity and user-friendliness of the platform
- A wide selection of cryptocurrencies
- Low fees and good asset prices
- Platform authenticity and security
- Educational content
- Reliable and personalized customer support
- Useful trading features
Platform security is vital, low fees will save you some serious cash, and personalized customer-support can give you the guidance and help you need to be a successful and well-informed trader from the get-go.
2. Not knowing what a good investment looks like
When it comes to investing in crypto, you won’t get far without knowing what a good cryptocurrency investment looks like.
A cryptocurrency worth investing in will generally have:
- A unique function or utility that it brings to the ecosystem
- A diverse community behind it ready to adopt its use-case
- A reputable team of developers
- A well-written white-paper
- A road map for future development
In such a competitive marketplace, for a crypto to succeed above all the others, it must possess a unique function or significantly improve on an existing technology. A crypto’s ability to solve a problem in the world is what defines whether or not it will succeed in the long-term.
3. Not diversifying your portfolio
If you’re looking to reduce risk and maximize profit, then spreading your investments across different cryptos (and other types of investments) is a good idea.
This is much more effective than investing in just one coin as it is less likely that all cryptocurrencies will simultaneously crash. You can develop a strategy that is tailored to your trading style, risk tolerance and goals.
4. Trading based on FOMO
Now this is one we really have to stress. FOMO, or Fear Of Missing Out, is one of the main culprits behind beginners losing money early on in their investment career.
FOMO is the fear of losing out on a limited-time-only opportunity and all the profits that come with it.
FOMO manifests as selling too early, buying when prices are high (as you feel like you are missing out on an astronomical rise), or even just investing in a dubious project that is surrounded by hype and big promises.
While getting rid of FOMO entirely is difficult, you can actively combat it by developing a trading strategy and creating a set of rules which include limits of allowable losses and profits for each coin you invest in.
Sticking to your game plan when the market is going crazy is a skill that will serve you well in the long run. It is important to understand that new opportunities in the world of crypto appear every day, so relax and let go of your fear of missing out!
5. Not doing your own research
Do your own research. DYOR. You’ll hear that a lot in the world of crypto. And for good reason. It can be hard to discern the truth-tellers from the hype-salesman in this industry so doing your own research is crucial.
Whenever you get information from a source, make sure that they are reputable and trustworthy. Evaluating the size of their following is a good rule of thumb for determining whether or not you should take someone seriously. As you continue on your crypto journey it will become clearer which sources are reliable and which aren’t. At the end of the day, you have to ask yourself:
What does this cryptocurrency bring to the market? Who are its competitors? Does it have something that its competitors don’t? Who is the team behind it? And is this a short or long-term hold?
Youtube, twitter, news articles, Reddit and other trustworthy websites are a good place to start for crypto information. Crypto news and updates can be extremely time sensitive so make sure you’re aware of when it came out when you’re doing your research.
6. Not knowing when to exit and take profits
Even though every new trader dreams of this situation, many don’t have any idea what to do when it actually happens. Often, they end up holding an asset too long in the hope that they have a piece of the next Bitcoin. Then it crashes, taking all of their profits along with it.
By not knowing what your goals and limits are with a trade, you open yourself up to a lot of unnecessary risk. Before purchasing a coin, we recommend having relatively clear goals and limits of how much you would like to make and at what point you will cut your losses and get out.
A big part of being a successful crypto trader is learning to regulate your emotions and stay composed when the pressure and stakes are high.
7. Panic Buying/Selling
Many of the more established cryptocurrencies bounce back after a price drop (Bitcoin is a great example), so it is important not to let your emotions get the better of you, especially if you believe in the technology of the project (which you should if you’ve invested in it)!
Panic buying is the other trap to look out for. Newbies tend to believe more than they should. Many are way too eager to jump on ‘the next big thing’. This can result in them hastily rushing into a trade that they have not properly researched or evaluated.
Finding the next undiscovered Bitcoin or Ethereum should not be your main trading strategy. If you’re looking to make real, long-term profits in crypto, you should be researching and evaluating every coin before you invest. Let go of your FOMO and embrace the slow and steady approach!
8. Thinking only in terms of price
Naturally, new traders get caught up on prices – after all, the world of trading seems to revolve around profit/loss, so why wouldn’t price be the most important thing?
Price is, of course, important, but it shouldn’t be the only thing you’re looking at when you’re trading.
Other equally important factors to consider include:
- The technology behind a project
- The developers and team involved
- How it will be implemented into the existing market
- Whether or not it will succeed in the long-term
Only after assessing these other variables can you truly understand what the price means in terms of whether or not it is a good investment.
Getting in at a good price is important but things change quickly in the world of crypto. New developments, changes to regulation and announcements mean drastic price swings should always be accounted for!
9. Not Prioritizing Crypto Security
Trading crypto involves some level of security risk.
Make sure you choose an exchange with:
- 2-factor verification (2FA) – a great first step to avoiding any password hacking!
- A storage system that puts the majority of assets in cold, offline storage
- Sophisticated multi-layered security that is regularly updated to deal with the latest threats and hacks
It is also important to be aware of potential scams and frauds. Some of the most common ones include unsafe exchanges, pump & dump schemes, fake coins, email scams and password hacking. Don’t click on links or attachments from unknown email senders and be aware of the various types of crypto phishing scams out there.
Additionally, it is wise not to be too vocal about your assets when discussing crypto investments in online forums and on social media.
12. Putting in too much money too soon
Throughout your trading journey, there will inevitably be mistakes and losses and most of them are likely to happen at the start of your trading career.
With this in mind, if you are just starting out, it is recommended not putting in more than you are comfortable losing. Test the waters with a few trades before capitalizing on a big trade opportunity that you think will reap significant profits.
Conclusion
As a new crypto investor it is essential to follow the right steps in order to avoid making the usual mistakes involved when trading. At KOYN, we have low fees, friendly user interface, a range of cryptos to choose from, very strong security, provide rocket speed transactions, great customer support and we constantly educate you on our social media platforms.
Follow us on X – x.com/usekoyn
Follow us on Instagram – instagram.com/usekoyn
PRODUCT LINKS:
Playstore: https://play.google.com/store/apps/details?id=com.app.koyn
WEBSITE: https://www.getkoyn.com/ Help: https://help.getkoyn.com/en/
