While Bitcoin trading has the potential of reaping immense returns, one has to be equally cautious while trading with cryptocurrency since it is very volatile in its nature. Carrying out an intensive research of the markets should, therefore, be prioritized.
For instance, Bitcoin hit an all-time high value of $65,000 this April, while it fell to $29,000 during the month of July. These fluctuations could be hard to predict, and so, enough research should supplement the decision of investing in cryptocurrency. Here are some common blunders one must avoid to make the entire trading experience fun.
Selling hurriedly under pressure
Purchasing high and selling low is not the investment strategy that most investors aim for, while still ending up like this. The major reason accrued to is not timing the trade according to the markets, and giving in to the short-term fluctuations (which could turn out to be market illusions)!
It is, therefore, important to invest wisely. Holding on to your investment till the market looks green again, could cut on your unnecessary losses.
Waiting for the peak to sell
While waiting for the greener market is always lucrative to sell off your investments, holding it beyond time might result in a lost opportunity! You can never be certain of the heights a coin is going to achieve in its value. For instance, you purchased a Bitcoin at $100, which surged to a tempting value of $1,000. However, you see that Ether has climbed up to $9,000 and you decide to wait, but in vain (as the Bitcoin started dipping already).
In such a case, you need to strategize- setting up a goal for yourself, and sticking to it no matter what. Also, you must not sell everything at one go. Split your investment into portions, and wait for the appropriate opportunity.
Selecting the wrong Bitcoin Exchange
Jeopardizing your profits for selecting an inappropriate exchange could be too risky an investment. It is, therefore, very necessary to research and think of the best exchange from among the various trusted cryptocurrency exchanges available.
Inappropriate dose of confidence
Investing in crypto comes with a lot of peer pressure, because of the velocity and volatility of the markets. Not having enough confidence in your trade strategy could make you go crazy with a lot of buzz in the market.
Overconfidence, on the other hand as a result of handsome profits gained over the last few trades, could carry you away from the most crucial piece of information that would help in maximizing your profits.
The most significant factor in trading crypto is competence, outsmarting luck or chance almost always. The necessary trading skills include- identifying the possibilities in trade and taking their full advantage. This requires one to be fully aware of the nitty-gritty of the trade- tracking the recent updates as a practice and understanding the depths of the underlying technology (like reading white papers before opting for ICOs).
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Patience is the key to keeping up with the crypto markets. It’s always advised to keep calm, and not panic about the ever-so-fluctuating trends. Make bold moves whenever a good opportunity arrives at your doorstep. Since the market is so young and developing, everyone would be able to make out of it sooner or later. What is more important is to maintain the value of your crypto assets. Their declined value is all the more wastage of your investments. Don’t allow the instincts of greed and incompetence to take the best of you.
Founder Dinis Guarda
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