Crypto investors have increased in recent times as many people get to see the opportunities that abound in it. Despite this, some people have tested their legs in its waters and have counted their losses-this is as a result of their lack of sound knowledge.
Crypto’s price volatility, scams, and other issues with it make it very important to study the market before going into it. A good knowledge of crypto and how to play in the market is important to earn big.
This article will be a guide on how to avoid big mistakes while dealing with crypto.
5 Big Mistakes You Need to Avoid in Crypto
Crypto makes it possible to quick money and has attracted several investors. Beginners need to know how to avoid some mistakes that could make their hard-earned money go into thin air. Discussed below are some big mistakes to avoid in crypto.
1. Do not do your research
The biggest mistake you would make is investing in what you don’t know anything about. Crypto investment is the riskiest form of investment today; if you are going into it, you must do your research.
You need to be aware that crypto is highly volatile; the price goes up and down so a return on investment is not always guaranteed. When you get a piece of information about crypto and its endeavors, it’s important to do your findings before jumping into it.
Do your research on the exchange to use, the coin to invest in, the strategy to use, and so on.
2. Not choosing the right crypto exchange platform
The crypto exchange platform you use for your crypto deals can determine if you will make money or loss it. Crypto exchange differs in fees and the number of coins/tokens to buy/sell. Binance, Coinbase, Gemini, are few of the top crypto exchange today.
As a crypto beginner, you should be concerned if the platform is not easy to use. You need to know if its secure for your use. This is important for the security of your crypto assets. A good exchange should meet your needs to have a wonderful experience on the platform.
If you are in Nigeria or Ghana, Prestmit is one of the best digital platforms to sell top crypto assets. The platform is the best when you want to have a wonderful trading experience.
3. Not diversifying your portfolio
As a beginner, it is important to know have it at the back of your mind that you will have to invest in multiple coins. It is a good idea to spread your crypto investment across different tokens. This is better because you can have a refuge in other assets when one crashes.
You could diversify your portfolio by investing in small-cap altcoins alongside top assets like Bitcoin, Ethereum, Binance Coin, etc. You have saved yourself from a huge loss if you don’t invest in one coin.
4. Trading based on FOMO
If you have decided to invest based on fear of missing out on its opportunities then that’s a mistake. FOMO is the fear of losing out on a limited-time-only opportunity and all the profits that come with it.
If you’re buying/selling based on FOMO, you are on the path to missing out on your returns. Panic buying and selling should not be part of your strategy. You will need to learn how to stick to your plan and that is a skill on its own when trading/investing. Learn how to avoid this mistake and become a veteran in no time.
5. Not knowing when to exit & take a profit
Another important strategy to take note of is the exit strategy. You might have got a coin at a little price which then has a price surge in no time. Once you have made huge profits, you must know when to exit.
Knowing how to exit and take profits is important if you’re buying/selling on short term basis. You must also learn how to regulate your emotions and stay composed when the pressure and stakes are high.
If you are hodling for the long term, knowing when to exit and take profit is not important. Many want to take profits by selling their crypto at any available opportunity. Investors are selling their bitcoins and other cryptocurrencies due to the bear market. This could be a mistake when the next bull run begins.
There are several mistakes to avoid when involved in cryptocurrencies. Having a good knowledge of crypto works and getting informed about the happenings in the industry is very important for your success.
Crypto is in its infancy stage which makes it necessary to keep getting informed and stay on alert for the next move.