Crypto Investment. Entering the world of cryptocurrency can be like visiting Oz Land - once you step through that door, everything is different. If you are a beginner of crypto trading, you will learn too quickly that you are not in Kansas anymore, so here is a way to avoid the top 5 mistakes that new traders often make.
Do not Diversify Too Fast
You may have been told never to put your eggs in one basket when it comes to your investment portfolio, but in the world of digital currency trading, it is possible to have too much diversification, and too soon.
The reason you need to slow down your roll in these circumstances is that the current digital currency landscape is that it's kind of similar to the Wild West - there are so many altcoins out there now so it's almost impossible to know which ones are legitimate and which ones are not.
The trick is to research and select widely distributed coins with high market capitalization and trading volumes that have shown their longevity. Start with Bitcoin, of course, but then choose one or two altcoins at first until you have the experience under your belt.
Do not Spend Too Much Trading Time
This sounds contrary to intuition, but it is possible to end up making a profit less by trading constantly. New crypto traders often become very passionate about the digital currency market they spend every moment while watching price fluctuations and trying to find the perfect trade, but it can be really exhausting in a hurry.
You need to muffle that passion with wisdom. The crypto market is so active that even if you lose what looks like an amazing opportunity to make a profit, they will be the next five or ten who are just waiting for you. Trading when you're tired can cause stupid mistakes because you think emotionally and not logically.
Do not panic
The altcoin scene is very unstable. This can create a lot of uncertainty in the hearts of a novice trader, and it can easily arouse panic and fear in your stomach - which is the worst emotional state while in the trade.
Just like trading when you're tired from spending too much time watching the market can be a disaster, making trading decisions because you feel panicked about your investment can be a bad choice. Although there is nothing wrong with believing your courage, never make a decision based on panic and fear.
Do not Fall For Fraud
The natural tendency for crypto investors is to identify new altcoins with growth potential, invest heavily while still cheap to do so, and then reap the rewards as their value increases. That said, the altcoin market is growing so fast that many new digital currencies that hit the market may not be a good long-term investment.
It may be painful to be cautious when it comes to investing in new altcoins as they enter the market, but doing so protects you from engaging in fraud in the making. Littered by a pump-and-waste scheme - something that often happens in the world of cryptocurrency - can make you not see your investment lost overnight.
Worse is the exclusive altcoin that is only available through a closed system. These coins - usually pre-mined by the company that created them - can only be traded in the company's closed system, and are particularly vulnerable to value manipulation. Be cautious before investing in any of these altcoin types.
Do not Choose The Wrong Exchange
Just as the amount of altcoins entering the market grows exponentially, the number of cryptocurrency exchanges you can trade in this currency also increases.
The problem is that not every new exchange is created equal; new and untested exchanges can turn into nightmares if they do not honor the withdrawal or become inaccessible at the wrong time.
Begin your crypto trading career with a long and respected exchange, which supports a large number of established digital currencies. Although you seem to miss the opportunity by doing this, keep in mind that the ability to recover cryptocurrency from unknown, unreliable companies can be impossible.
Watch Your Steps & You Will Not Fall
The world of cryptocurrency trade is alternately interesting, exhilarating, and frightening. You do not want to end your crypto trading career before it even begins, so make sure you take conservative risks until you get more experience.
Students can easily fall through this very complicated world gap, especially when it comes to altcoin - and skipping this trap is even more likely if you're inexperienced. However, these five tips will help you navigate this cloudy water and get out of the other side without losing your shirt.