Investing in Cryptocurrency: 8 Mistakes to Avoid

Updated on November 01, 2022 at 11:17.

When you are new to the industry and want to invest in cryptocurrencies, it often happens that you make mistakes and lose your money. Many new investors come because they heard about crypto from the media, internet or friends.

It is therefore essential to establish rules to discipline yourself and avoid maximum losses. Here’s a tip to help you see things a little more clearly.

1. Investing in cryptocurrency without understanding

Everything has one The technical aspect, especially cryptocurrency and crypto trading. Investing your money in an asset you don’t understand is the perfect recipe to lose capital.

Before investing, you should study and understand what is the purpose of the project you are targeting or what is the utility of the token. In general, above all the fact of self-education SHARES investment, will make you one the best investor.

You should always keep this in mind your money is the target of the worldit is up to you to create a strategy to study crypto projects, to understand the technical aspects of blockchain.

2. Ignore transaction fees

In crypto trading and in particular in Challenges, each transaction costs a fee, called “gas fees”, which can be translated as fuel cost. When a user makes a purchase, sale or something else SHARESpays transaction fees.

These fees always change depending on the number of transactions per second and blockchain. To illustrate, performing a network operation Ethereum ranges between $1 and $10 in ath or even more, depending on network congestion.

In addition, gas costs have a very specific purpose. They serve, among other things, to protect blockchain. Gas is also used for correlate network operating costs Ethereum the price of ether.

When you do a lot of transactions, and especially on the network Ethereum where the fees are very high compared to other blockchains, we understand that an astronomical amount goes into these fees, collecting them.

Therefore, you should always be alert for this in the long run to save your money.

3. Invest in cryptocurrency: think short-term

Many new investors come in thinking they are going to get rich in less than a year thanks to crypto trading. This is a common mistake that many imagine when looking at the situations of some who have had success with crypto.

Don’t be blindbecause whoever says get rich quick also says get poor quick.

4. Thinking crypto trading is “free” money.

The volatility of this new market is too high it is an indisputable fact. But every growth has its own descending equivalent, and the truth is that nothing is easy.

It is even more difficult to keep a cool head than in the traditional market. Thinking that crypto is money that fell from the sky, we run right into a wall.

You always have to be satisfied of his income and stay in his investment strategy.

5. “All-in” your capital in crypto trading, investing all your money at once

In crypto trading, it is mandatory not to invest all the money at once and divide by percentage.

To succeed in being profitable, without playing the lottery, you must have one money management »a spreadsheet to allow yourself to lose this or that percentage of your portfolio, because any money invested should be considered lost already.

It is therefore strongly advised not to use it than a certain part of its capitalpre-established and to keep funds unexposed.

6. Invest in cryptocurrencies because the price is low

Once a crypto has made a big performance from its low, buying it just because it has turned to a low can be extremely tempting, imagining to see her again rise to her prime and become rich.

Chart - crypto trading

It can be really interesting to position yourself in this way, but the decision has to be made arguments. Buy some ath because it is low there is nothing to invest in an unknown cryptocurrency even if it has made a huge multiple before.

7. Having an overly complicated strategy

New crypto investors use complicated trading strategies directly because a YouTuber or a social media influencer told them, without even understanding the basic principles of trading.

As in all cases, these will they lose their money and go to be abandoned strategy see investment total.

It takes time to learntechnical analysis and functioning of crypto markets. The best trade school is experience with yourself.

In fact, investing in cryptocurrencies can be simple, it is possible to invest without always being in front of the charts of crypto assets by actively trading.

8. Invest in cryptocurrency: pay attention to leverage

The principle ofleverage is extremely dangerous, especially in the crypto market. Since the volatility of these assets is extremely high, use one leverage it is dangerous if misused. It is a tool that must be used very carefully.

It works both ways: it can do just as much lose more than you win more.

To be on the good side of investors, you should leave nothing to chance and leave nothing behind. With this in mind, you will be well on your way to success!

You are interested in cryptocurrencies and trading? You can learn how to make your own multiples cryptocurrencies, all within the rules of risk. of training Crypto Rider offers you to create a strategy to allow you to be profitable:

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