5 errors when buying crypto currency

[lienfaye]

Im guilty with number 2 and 5 because of greed when I was just starting as a trader. I thought selling when the price is in dips can save you from losing your money and buying any coins will do just go with the flow like other traders (stupid thinking indeed).

Newbies can learn in this thread of yours so thank you for the effort making these because it can be helpful for new traders to consider before starting to buy.

[alyssa85]

Also - don't forget risk management. Don't go all in. Instead only stake 1/10th of your stash on a trade. That way, if you get it wrong and you get stopped out, you still have money to place another trade.

Most noobs think that going all in will help them make profits quicker - but it also gets you wiped out quicker.

[reymartH]

The crypto market is extremely volatile, which means price swings are normal, and if you get spooked easily, you will lose money. Panic selling is a common mistake beginners make, where they first get into a market without much research and then, when faced with a sudden drop, sell to ‘cut their losses’. The problem with this approach is that once you sell, you’ve actually lost money (you don’t lose until you sell), and while in some cases, cutting your losses does make sense, most coins will bounce back in days, if not hours, and then the same people, seeing a surge, buy back at higher prices, only to repeat the cycle. Buying high and selling low is a one-way ticket to going broke.

[Tactical Genius]

Thank you so so much for such an in depth analysis.I have always searched for simple rules like yours to use during trading and thankfully i found this post.Thank you once again.I have really lost a lot trading badly of late especially in the last one month of turbulence.

[AlexZHankok]

Guys thank you so much. I did not expect such a small article to be very useful 
Most traders and investors pass through these errors - this is normal, this makes us stronger.

[vintages]

What a well researched and written article. I couldn't agree more on the last pieces about not  buying an unknown coin. This is the mistake most new traders make, including, when I started out as an early trader. And most trader prefer to start out through ICO instead of buying coins which are already listed. This is another means whereby people get scammed. Though not all ICOs are scam.

[Zanrrio20]

Another of the many mistakes we make, at least with bitcoin ... It is very intuitive to measure the benefits of our investments in cryptocurrencies in dollars or euros because it is the currency we use, mainly due to the great volatility that Bitcoin has. But the reality is that we must measure these benefits always in BTCs, specifically in satoshis which is the smallest fraction of Bitcoin that can be managed. Recall that a million satoshis are a BTC.

The reason why this has to be done is because for each financial asset, we must measure it against a reference point. That is the standard to invest in any financial asset.

[reymartH]

The market doesn't care if you win or lose. Many traders make the mistake of chasing a poorly performing trade just because the crypto they’re trading has caused them to lose money before and it “owes them”. This superstitious thinking is all too common in the crypto ecosystem.

[katiecbell]

Im guilty with number 2 and 5 because of greed when I was just starting as a trader. I thought selling when the price is in dips can save you from losing your money and buying any coins will do just go with the flow like other traders (stupid thinking indeed).

Newbies can learn in this thread of yours so thank you for the effort making these because it can be helpful for new traders to consider before starting to buy.

This is the most common mistake made by newbies that they blindly follow the crowd. Most of the panic selling of expensive coins such as bitcoin is done by new investors of this currency and these are regretting badly after spending few months in the crypto market.

We should know that bitcoin is one of the most amazing currencies and it is not easy to earn even a single bitcoin these days. Always stay cool and calm when trading.

[CryptoBry]

I believe these are indeed the most common mistakes especially made by those who are just new to the cryptocurrency market...but sadly even old-timers can also be victims as we are letting our emotions rule our judgement. The most important point is never buy a coin when it is at its highest peak and never sell when it is at its low point. Simple but of course implementing can be difficult sometimes. There will always be risks associated anything to do especially if we are involved in buying/selling cryptocurrencies and tokenized assets.

[AlexZHankok]

Now the situation on the market is similar. Many inexperienced traders sell bitcoin, altcoins. They are afraid that the market will come down even lower. But you do not need to panic at all. Here it is the bottom on which you must necessarily purchase for a new one, and not sell what you have now.

Inexperienced trader


trader who learns from mistakes

[CarnagexD]

It is always a good thing to look up upon learning the proper way of trading on the people who have a decent experience with dealing with tradings and investments with cryptocurreny. I think most of people need to rely on the experience of people so we could have a preparatory knowledge with the system of trading that could actually help us to deal with right decision and making a good trading. But we also need to try and make our own move so we could learn from our own experience and develop as an individual.

[redsun114]

The market doesn't care if you win or lose. Many traders make the mistake of chasing a poorly performing trade just because the crypto they’re trading has caused them to lose money before and it “owes them”. This superstitious thinking is all too common in the crypto ecosystem.

Listen brother, we have to be ourselves whatever happens. I have seen so many people who were better traders and then they fell down from this level of success. What was the reason? Only considering themselves better than others and wrong choosing of coins. Research is always welcomed when you talk about getting success.

[metenjean]

Mistake № 1. Buying on the top (loss of profit syndrome).
A huge number of people enter the market at that moment when it's time to get out of it, regardless of the scale in which they trade. If the coin has recently shown X5-X10, it makes sense to look the other way, to look for a fresh product - coins that have successfully completed the ICO, have collected HardCap, but have not yet received their Xs.
 
To avoid this situation, the following rules should be adhered to:

1. Never buy when volume increases if the price is at the top of the market and there are no valid reasons for further price rise, and instead an artificial pumping of the price occurs.
2. You can buy in a growing market, but only if there is a break through the resistance level (maybe for someone it's a new word, but it's better to learn the basics of trading).
3. Always remember, there are 2 sell/buy glasses on the stock exchange, which means that against your deal for a purchase is a sale, where an experienced player comes out of a long position to re-buy at the bottom.

Mistake № 2. Sale of coins on the bottom (fear of losing everything).
No less number of investors falls into this situation. Surprisingly, this is a mirror image of the "Buying on the top" scenario, the same high volume combined with the heavily falling prices. Only in this situation we already experience not the "lost profit syndrome", but "the fear of losing everything". Negative news, panic on the forums and big red candles. Typically, this situation on the market has a pointed depression, such as the letter "V" (see screenshot). Selling in this situation, you will very soon face a price reversal and regret that you have succumbed to fear, trying to leave at least something of your investment.
How to avoid such an error?

Follow the same rules as before:
1. Never sell when volume increases if the price is at the bottom of the market, especially when all support levels are broken and there is no valid reasons for further price drop.
2. Sell in a declining market, supported by volume, only if you really see that there will be a break through the support level.
3. Always remember: on your sell, more experienced players want to be proficient; for your sell is an order where another investment fund or a large trader enters a long position to buy.

I do agreed not to buying a scam project or ICOs that you dont recognize, but how can you define a project a Scam or not?? Except for lending coin which have we all know as Ponzi scheme that it is a scam project from the very 1st. Because when buying a coin you do have detailed plan about why you buying this coin.
For the first half paragraph i certainly agree with you to not buying a new ICO coin that already gaining 5-10x price from the initial ICOs price, but what about the major coin such as bitcoin, ethereum, xrp, stellar? And mostly i think this kind of technique define errors but dont define about how to fix the mistakes, support and resistance is just a minor indicator, if you're still riding the trend then i dont really have any problem buying higher when the price got a high volume, and sold all of my capital if the price declined and the trend begin shifting, start buying bitcoin since last year in $4k range when people start spouting about bitcoin wont reach higher price, it will burst into bubble and i do hold it until last week when price decreased below $10k. I believed most of people here dont even know how to indicate a top or bottom, so we got no idea if the price has reach bottom or top yet, because no one can predict a future, but instead we can make an exit plan before begin to trade and follow that plan 

[AlexZHankok]

I do agreed not to buying a scam project or ICOs that you dont recognize, but how can you define a project a Scam or not?? Except for lending coin which have we all know as Ponzi scheme that it is a scam project from the very 1st. Because when buying a coin you do have detailed plan about why you buying this coin.
For the first half paragraph i certainly agree with you to not buying a new ICO coin that already gaining 5-10x price from the initial ICOs price, but what about the major coin such as bitcoin, ethereum, xrp, stellar? And mostly i think this kind of technique define errors but dont define about how to fix the mistakes, support and resistance is just a minor indicator, if you're still riding the trend then i dont really have any problem buying higher when the price got a high volume, and sold all of my capital if the price declined and the trend begin shifting, start buying bitcoin since last year in $4k range when people start spouting about bitcoin wont reach higher price, it will burst into bubble and i do hold it until last week when price decreased below $10k. I believed most of people here dont even know how to indicate a top or bottom, so we got no idea if the price has reach bottom or top yet, because no one can predict a future, but instead we can make an exit plan before begin to trade and follow that plan 

-Do not buy when the market is already overbought. Wait for a rollback.
-Do not sell when everyone sells.
Here is the main message of this article. Patience is always rewarded.
No one can determine the exact point of sale or purchase. Only analysis and your assumptions.
There are plenty of information on the ICO scams on the forum.
But if necessary, I can write my own set of rules, how to analyze ICO

[ajmapalo22]

I don't believe in errors with regards to crypto currency investment, all I know is that there is a proper timing in everything and some just encounter bitcoin out of their luck. Bitcoin is unpredictable so we can never tell if its good time to hold or sell them. I tried holding bitcoin up to this moment after experiencing continuous increase last December believing it will go even much higher but it did not appreciate but instead drop so bad but it does not mean I made an error I know in right time bitcoin value will soon recover.

[di.ako.toh]

I think one of the most error on buying in cryptocurrency is buying at the high price. We should take time in buying if coins is at high value in the market, because its tendency is to go down the price because its volatilitu, so it is no more profitable when it happens.

[izanagi narukami]

Bitcoin trading have their own risk but it's worth for the risk because bitcoin can make you rich in 1 year ( Compare with gold investment )
These example are great and can be my example to explain for my friend , the risk / error thing in crypto trading.

~Overall just HOLD btc, period.

[Caladonian]

Before I also did the wrong practice of selling when I seen that the price is falling, I tend to think that instead of losing more better to sell it and buy other coins which are moving upwards, the problem is instead of gaining back those loses most of the time I keep on placing in the wrong entry point making it to lose more, but now after those mistakes I make it sure that I'm not selling any coins if I still have loses, holding until the value that I desire has been reached.

[trucker_bill]

thanks, thats a really good explanation.

I would like to add one rule:

ALWAYS do EVERYTHING yourself. If you don't do your homework and learn how to do stuff yourself, you will always be DEPENDENT.
You don't need to be an "IT-guy". You just need to be interested and curious enough and start with little steps.