5 Typical Investing Mistakes with Cryptocurrency You Should Avoid, says Crypto Tips
In a recent video, a popular crypto channel Crypto Tips shares the top 5 worst trading mistakes of crypto investors.
Rigid Price Points within a cycle
The first common mistake is having rigid price points within a cycle.
“A lot of people are like I’m not going to sell any of my Ethereum before it hits 10,00 dollars within this bull run”.
According to the crypto KOL, it is a “foolish” mistake because nobody knows how high and volatile a price can be in the future and it could risk a potential 2 to 3 years bear market as the price drops.
Using too much leverage
The next mistake on the list is taking too much leverage. Leveraged trading is trading on credit by depositing a small amount of cash and borrowing a more substantial amount.
“A leveraged position is when, for instance, you have a hundred dollars all right in Bitcoin, what leverage means that you’re multiplying what you have. So you’re taking out a loan of $500, so that’s a 5x leverage, and you know if the trade goes the wrong way, you don’t have the collateral anymore to cover that loan so that means that the exchange that you’re on potentially is going to call you up and you have to get out of that position”.
Not being flexible
The third mistake is “Not being flexible”. According to the crypto KOLs, the phenomenon of this mistake is that investors holding zero cash on hand and put all in their crypto investments.
“That’s not smart okay! So, for instance, if you don’t have any cash on hand and the prices drop, you can’t take advantage of these opportunities and so you really need to be careful and make sure that you can add to your position”.
Following the crowd
When it comes to investing, following the crowd is very dangerous.
“The investors who follow the crowd have a major flaw in their strategy. They make their investment decisions based on what other people are doing. That is a loser’s game because the proper cryptocurrency selection research was not conducted before the investment was made”.
“The truth is by the time you hear about it, you are the sucker, you are the guy who is buying after everyone has already seen a huge amount of profit and they’re selling to you. And you will have no one else to sell to, you’ll be the one left holding these crap coins that because they’re so hyped up, as quickly as they shoot up, they’re gonna shoot down as well or just fade into oblivion”.
No investment plan
Not planning ahead is the worst thing a crypto enthusiast can do while investing in cryptocurrencies.
“You need to be strategic and establish clear goals before making any decisions. The chances of financial losses are even bigger when you do not know where you want to go”.
For that reason, the analysts advise that as an investor, people should determine their goals, their desires and, only later, get into the crypto game and start profiting with digital assets.
Disclaimer: Opinions expressed at AZCoin News are not investment advice. Investors should do their due diligence before making any high-risk investments in cryptocurrencies. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. AZCoin News does not recommend the buying or selling of any cryptocurrencies.
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