The crypto market is always known for its low barrier strategy to get an entry in it, which means you don’t need anything to become a trader. All you need is just an internet connection and a smartphone or computer. When you come into the crypto market you will learn new and creative techniques to be an expert in crypto trading but this might not happen all the time. Sometimes you may get failures one after one and this leads you and your confidence down. If you are getting failed with your investments and it keeps going on you might need to look for the reason of your failure and fix it as soon as possible. So, what are the mistakes you are making that’s landing you in failure all the time? Well, this article will help you find out the reasons why you are failing as a crypto trader. Here are 10 major reasons which make your investment void and ineffective.
Reasons Why You Are Failing As Crypto Trader
Prefer Paper Trading Initially
If you are interested in trading in cryptocurrency to become a professional trader, you have to follow a system based on professional guidance and trading experiences. This helps to maintain risk management but this cannot be done with actual money. You need to go with paper trade until you will be able to deal with cryptocurrency. This will keep you from mistakes. In cryptocurrency, there are always risks of losing your funds.
Not Able To Accept Loss
The new traders in the market always expect to gain continuously which makes them faint towards loss. Acceptance of loss is the most essential thing for a trader. This ability develops the skill of facing market risks with more efficiency and creates the ability to find out the mistakes. The newly entered traders should accept losses when they happen as they are always a part of the market.
Fail To Maintain Balance
The experienced and successful traders always keep a balanced portfolio to keep a hold on long term holds. In this financial market place, it is compulsory for any investor to maintain a portfolio instead of investing in just one coin. You can search for the best cryptocurrencies 2020 in the market and then invest in some of them. The reason being, it saves you from extensive losses as even if the price of one coin drops down, there would be some coin that will rise in price. After all, no matter how much you are experienced, you never know if the specific coin will prove to be beneficial. Moreover, all the experienced investors believe in investing their money in a couple of coins and not just one of them.
Trusting Fake Information Or News
When you step into crypto space, the first thing you need to avoid is trusting any news without verifying its source. As a new trader or beginner, you must be relying on news and other resources to keep up with the price and predictions of coins. But if you won’t verify the source of the information properly, you will take the wrong step in your investment and eventually taste failure. If you’ve been into crypto space for a while now, you must have suffered or fallen for this already. Mostly, these types of rumours initiate from social media platforms and take the face of news. So, keep your eyes wide open and learn how to find a reliable source of news to keep yourself at the safe side.
Think They Know Enough
One of the most common reasons why you are failing as a crypto trader is that you think you have enough knowledge about everything. You might be into the crypto space for a while and maybe know all the basics about crypto trading, but if you won’t keep up with particular recent trends, news and technologies, there’s no way you can survive the market. So, in order to keep up with the new techniques and technologies, you should never stop learning.
Investing Blindly In Any Coin
Don’t go on and invest in any coin according to its popularity or what other people say. So, why is your cryptocurrency failing? Maybe because you are not investing in the right one. You must research about the crypto coin or blockchain you are going to invest in beforehand. Learn everything possible about the technology behind it including the company’s plan of future, token release and the entire roadmap. If you are new to the industry, you should not invest right away and spend some time researching as much as possible about all the technologies and trading techniques in crypto space. If you are interested in crypto trading, learn about various types of trading, trading tools and strategies. And always start by investing a little and after that, you can slowly increase the investments monthly or quarterly as per your wish.
Using Margin Trading WIthout Experience
As a beginner or experienced trader, you should not use leverage trading. The reason being, you already don’t know much about crypto which is highly risky and then if you use margin trading you double your risks, so in order to be on the safe side, please avoid leverages. Its true leverages are used for doubling profits but if not used properly it can easily double your losses also. You can use margin trading once you get some experience in the sector and in the trading method.
The difference between a good and a bad trader is just the factor of how long they survive the market. And the only way to learn to trade is to start trading and although you can know about the tricks and tactics used in trading by reading articles and guides, in order to learn them, you will need to use them practically. Even if you know the skills of trading, in order to be successful you will need an equal amount of dedication, patience and other such qualities.
Now that you are aware of the reasons why you are failing as a crypto trader, you can deal with it more wisely.
One of the best ways to practice trading is by using paper trading methods. In crypto space, you can use paper trading apps to practice crypto trading without actually investing your money. There are a couple of apps like cryptocompare.com, Bitmex, etc that offer paper trading services.