Mistakes when Trade Coin of new people

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The huge profitability of cryptocurrencies has attracted a new segment of investors, causing the market capitalization to grow to $ 800 billion in early January 2018. However, not everyone who invests in can make a profit. Unfortunately, most new cryptocurrency traders are making mistakes that can easily be avoided. If you are investing in coins in the long term, the safest strategy is still HODL, but daily transactions, or even random trades, can also be profitable in the short term, allowing the wallet to Your money quickly thickens. So, let’s learn Bitcoin mistakes when Trade Coin of new people through the article below.

1. Listen to “trigger”, do not research yourself

Almost everyone joins the Telegram groups and follows traders’ Twitter for market signals, and there should be no problem, as long as you do your own research.

There will be no shortage of “bait” (pushing a certain currency and market for personal benefit) on all social media, and you will meet a bunch of people who claim that A specific coin will soon “to the moon” or increase 10 times in value.

If you just follow these guys and put your money in there, you will most likely lose them. Most of these “predators” are fake accounts, pay for ads or are members of a certain pump and dump group, inflating value, advertising, or create a FOMO (fear of being missed) effect and try to attract more people to buy what they are selling.

Doing your own research is the most important step before you enter any market. You need to understand what that currency does, its price movement, its development stages, etc.

Enter blindly, make trades without digging in just because you see an influx of money pushing prices up, that’s the recipe for a disaster.

2. Don’t understand the fundamentals of charts

Most traders think that charts or technical analysis are complex, or overvalued. Although both views can be proved, it is undeniable that market volatility and the price of currencies also have patterns that we can identify, at least ‘increase’. opportunity for successful trading.

If you trade seriously, you should understand the basics, such as candlestick charts, support – resistance and trend lines.

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For starters, you should understand that resistance areas are price ranges where a currency has repeatedly failed to break, while support areas are where prices often bounce back.

Identifying these areas can help you gauge how much the current price is, and whether it can go higher or lower.

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Trend lines are also fairly straightforward, where an upward trend is indicated by the price that creates higher lows (higher lows) (the green line in the screenshot below) and the downtrend is reflected by the bottom. lower lows.

3. Psychological panic, sell at the bottom, buy back at the top

The crypto market is extremely volatile, which means that price fluctuations are completely normal, and if you get caught up in that spin easily, you will lose money.

The panic selling is a common mistake for beginners, when they enter the market without much research, then, when faced with a sudden price drop, they quickly sell quickly to ‘cut losses’.

The problem with this approach is that when you sell, you actually lose money (you don’t lose until you sell), and in some cases, after you cut a loss, most coins will increase. back in the day, if not for a few hours, and then some people, seeing a growth, buy back at a higher price, just to repeat the cycle. Buying high and selling low is a one-way ticket to bankruptcy.

4. There is no transaction plan

You invested in a good currency, and the price went up, but what would you do next? Did you take profits and get out? Do you continue to hold? If so, why? Most beginners have no plans to exit, they have no stops, in many cases, they end everything when things plunge.

This plan can be very good if you are a long-term investor. However, if you are “surfing”, you need to determine the time of sale to make a profit.

You will probably see prices continue to rise, however, a good strategy is to sell in stages rather than all at once. This way, you earn profit immediately and still benefit if the price is higher.

5. Search for the next Bitcoin, Ethereum or Litecoin

In the last year alone, Bitcoin has grown from $ 1,000 to $ 20,000, which is an impressive increase. Ethereum and Litecoin have similar returns, but not all coins are possible.

Some coins, either due to large supply or many other factors, have dropped to a certain price, and investing in that currency, expecting profits from 2,000% to 4,000% is not a good plan. .

As a trader, you need to understand the specifics of every penny you trade, including price history and reasonable forecasts in the future, after which you can plan your trades. .

6. Put too many emotions in one coin

No one will ever be up forever, even Bitcoin has good days, and then “hard” days. The cryptocurrency space is always changing and evolving, with new opportunities coming every day.

If you believe in a coin, holding it to earn long-term profits is a good approach, but if you want to make money by trading, you cannot have any affection for any coin. .

When Bitcoin dropped from 20,000 USD to 12,000 USD, at that time, many traders sold out and then quickly bought back.

Similarly, if a coin is rising before an important announcement, you can easily double or even triple your investment with it. However, checking information and accuracy is extremely important.

7. Invest, trade all you have in one go

Another very common mistake made by most newcomers is to invest and trade all their money in one go. If you find a good exchange to buy the cryptocurrency you like, you need to buy it at a certain percentage, as high as 50%, then hold the rest to see if the currency is falling. next time or not.

If reduced, you will have the opportunity to buy more cheaply. On the other hand, if there is an uptrend, you can always continue to place more buy orders. The process of ensuring your transactions are always at a safe level and minimizing risks.

8. Put all eggs in one basket

Even the strongest currencies can be affected by a big drop while the whole market is still growing. Cryptocurrencies are unpredictable, meaning that no single coin (even Bitcoin) is ‘guaranteed’ to exist forever.

Whether you are holding or trading, you cannot put all your funds in a certain currency. Diversification and risk management are key to a good portfolio and investing in other currencies will also increase your chances of making a profit.

9. Think that cheaper is always better

A price of less than 1 USD does not mean this is the best time to invest in that currency. Although it is true that a coin at 5 cents can reach 20 cents in a shorter time period than a coin at USD 100 up to USD 500.

The important thing is that traders should not buy cryptocurrencies just because they are cheap without considering profitability. It is important to find out why the digital currency is so cheap, and how will the upcoming events affect prices and the possibility of future price increases?

10. Do not follow the news

Price movements, charts and market analysis are not enough. If you want to become a successful trader, you need to follow the news about cryptocurrencies and keep up to date with all recent and upcoming developments.

Since the cryptocurrency became a speculative market, it has reacted very strongly to both positive and negative news, and caught up with news an indispensable factor to success.

Bitcoin Vietnam News has just shared with readers the mistake when Trade Coin of new people. Hopefully the article has brought you useful information and avoid the above mistakes.

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