Common Mistakes New Bitcoin Traders Make
By Space Coast Daily // October 19, 2020
The number of people who use and own bitcoin today is on the rise, as bitcoin has shown a promising track record over the last couple of years.
More people are beginning to show interest in investments while some are gearing towards cryptocurrency, with bitcoin still being the most prominent. There are bitcoin trading apps and wallets today such as bitcoinup that has made the process easier than ever. However, as more people take this leap, mistakes are bound to happen, some of which are highlighted in this article.
Lack of Proper Research
Before you venture into a new field, especially if it concerns finances, it is advised that you do proper research to understand how it works. However, many people are eager to join the train that they fail to study the market themselves.
It’s easy to listen to what experts are saying on the internet but in addition to that, you must study it yourself and ensure you have a basic understanding of the market before getting started. Failure to do your research can make you lose more money than you imagined and can also ruin your trading experience even before you get a hang of it.
Emotional Decision Making
Making decisions based on emotions is not new and will always happen. However, there are varying levels to how you let your emotions affect your decisions when it comes to trading bitcoin.
Beginners are likely to depend more on their emotions and that’s often because of their little knowledge of the market, so they tend to be over-excited or scared and end up panic buying or selling. However, trading bitcoin doesn’t have to do with your emotions and if you keep letting your emotions control how you trade, you won’t be any close to your goal.
It’s easy to sell all your trades at once, especially when you have made some profit and want to redeem the price. But it is not a wise thing to do. Rather than selling all at once, you could sell a percentage and leave some in your wallet. Greed often drives many beginners to sell at once but if you’re looking to build a long-term plan to help you reach your goal, then you must learn to buy and sell in bits.
One of the most important things you should know as a trader is never to put all your eggs in one basket. Learn to diversify and invest in other things, such as stocks, real estate, or ETFs. You could also choose to invest in other cryptocurrencies apart from bitcoin.
This helps reduce your risks, as you can’t possibly lose on all ends; at least one would still be profitable. On the other hand, putting all your eggs in one basket means if anything happens, you will lose all your investments and there will be nothing to fall back to. Diversification is important and is one of the major factors to help build your portfolio and help you reach your goal.