5 mistakes every crypto trader should avoid

[TrevorS]

I add important things to me and maybe other people also need, never make a purchase with all the funds, do it in stages. Buying in stages is important to cover losses. Except in the condition of bitcoin or altcoin the price is really low

This is good advice, but it is rather difficult to implement for beginners. When prices are low and you have a certain capital to buy, then you will not think about buying in parts.
After all, if the price is now at its lowest point, then what's the point of taking risks and leaving part of the funds for the future.
However, I agree with you that it is necessary to take into account all the risks and break the portfolio into components.

[SquallLeonhart]

As for FOMO, it all depends, yes FOMO is usually not a good thing one should do. But that a FOMO stops doesn’t still mean it’s late for you to buy. You can still rush in at the time the FOMO started and make profit from the market. So, it’s usually by luck, if you’re lucky it will work out for you.

Secondly, you’re right about putting in too much money too soon. I have seen people that borrowed money to use them to buy Bitcoin, including the guy that convinced his dad that they should all their savings money in Bitcoin because he thought the price would go up and he would make profit, but at the end they were disappointed. Anyone that wants to invest should start little and as time goes on you can increase the amount.

[Twentyonepaylots]

I add important things to me and maybe other people also need, never make a purchase with all the funds, do it in stages. Buying in stages is important to cover losses. Except in the condition of bitcoin or altcoin the price is really low

This is good advice, but it is rather difficult to implement for beginners. When prices are low and you have a certain capital to buy, then you will not think about buying in parts.
After all, if the price is now at its lowest point, then what's the point of taking risks and leaving part of the funds for the future.
However, I agree with you that it is necessary to take into account all the risks and break the portfolio into components.

Indeed. And that'll ruin it for the people who have already established themselves in the trading scene. As we all know trading is just basically money circulating in a group of people where the ones who gained money "profitted" and the ones who lost money "lost". There has to be equilibrium in a system to ensure its profitability, and if everyone wins, then in a sense everyone loses too. Not to sound like an arrogant prick, but I believe that losses add fun to the trading industry and it's the money losses and gains that make trading bonds and assets flavorful.

[4IRIK]

Thank you ! So much useful info. Personally I found some more things recently

This is an article I found at the service I use https://www.bitinsure.com/

Avoid greed

One of the most harmful feelings in your mind during trading is greed. Just remember what you think when the price rises after you opened a long position. It really requires lots of effort to close the position, as you are wishing more profit flowing into your wallet, admiring growing trading volumes and amazing news about this particular cryptocurrency which is so promising and will grow forever. Here it is necessary to take off the blinders and understand that eventually, the price stops. Be it a gradual decrease or a dump, probably technical problems on the exchange, if you are a trader (not a long-term investor), you should fix your profit not waiting for the reversal trend. The exit point should be identified in advance, basing on the previous coin dynamics, your ambitions, strategy, trading volumes, social media mentionings, the reaction of whales (huge market players) and many more, not enabling the greed to manage your actions.

Fix profit by parts

The top level of the price (or bottom in case of short) is very appealing, but keep in mind that it is seen on the chart only after the price passes it already, while during an uptrend, for example, it can be hardly ever noticed.  That is why a wise idea to benefit from the price movement is to grab profits by parts on the way to the top or bottom. If you do not have enough time to monitor the price you can set the orders one by one on the way to the rally. Here is a useful trick: Consider support and resistance lines, and set take profit orders below support (long) and above resistance (short). The amount of the part depends on your strategy and aims. The only advice is not to close the position on the way to top/bottom. Leave a part of the initial sum (like 10% of it), as you never know if there is a jackpot after.

Do not put all your eggs in one basket

One more key concept is the diversification of the portfolio and calculation of its amount. Actually, it is a wide and fascinating point to discuss, and only the core points of it are regarded in this article.

It does not matter how promising one or another asset seems to you, try to focus on a range of opportunities, as in the crypto world something can suddenly go wrong (as anything in life). Just imagine that all the hype and price growth is ruined by one negative piece of news or was created artificially! Or, for instance, the decision of a huge market player which has a tangible impact on the price fluctuations. Never go for broke!

The wisely composed portfolio implies several types of assets of different industries and risks. The number of assets has almost the only limitation which is the number of positions you are able to manage, as even profitable coins should be monitored and controlled. Otherwise, it is not as effective as it could be, but we definitely need maximum effectiveness. What is more, no control means stress, which is not what successful trading implies.

No doubt, these features are up to your aims and overall strategy, however, to minimize risks, it is better to use up to 10% on each asset. In case of your firm confidence in the asset let it be more, but remember that all the rising tendencies finally finish. Therefore, having one outstanding asset should be better supplemented by finding more new opportunities to switch the attention to.

Below you can see a balanced portfolio example with various assets included. By the way, the detailed balance is calculated in statistics module in Bitinsure and presents your portfolio in a visual way.


Be forward-looking: Reinvest, invest, convert

It is one of the most effective ways to use your gains to multiply it. There are several options to use it, some of which are the following:

30% reinvest in new prospective altcoins,
25% enlarge the most profitable positions you have currently,
25% invest in other assets,
20% convert into fiat.
Pay attention to the last two points, as they are acting as a preparation for “hard times” in crypto. Of course, it may be difficult to resist the temptation of investing all into new coins, but thinking a few moves ahead a trader uses the profit

[rexxarofmoknathal]

Project diversification is key but in terms of re-investing this can be something more challenging for people who aren't always keeping an eye on how the market is doing. Re-investing is also more risky since you really have to be an optimist and have an outweighed benefit which usually comes from long term hodling.

[sweetbet]

Be careful who you follow or take advice from. There are many scammers out there.

[bitcoin31]

Every Mistakes that we can make it gives to us an idea or lesson on how it cannot do it again.

But mistakes is always there even we avoid it sometimes can still encountered it just like in trading many traders are very careful in buying coins and selling it but look at them they still making a mistake and count to think of it they are professional and expert trader what more those trader who are beginners.

But even that we still need to be vigilan or do our best to avoid mistake while doing trading because if we do little wrong move money will be involved so if we want to earn make sure you know the do's and don'ts in trading.