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Crypto Trading Tips And Common Pitfalls You Need To Avoid

In the entirety of our lives, the journey is never smooth. There are always ups and downs to be considered, and they will inevitably find you in the course of your life. There are, however, certain good moments that define how nice of life it is that we have.

There are the silver linings in your life and the rough patches that you need to go through. A large part of it could be due to money problems and the whole stew of handling it right. If you want to know more about crypto and how to manage your investments, click here to learn more.

The truth about life is that you cannot always win. There will always be both wins and losses that you will go through. Instead of fearing these losses, a rational and optimistic mind realizes that failures are just as crucial as your successes are.

This is where your financial intelligence should step in. One of the main characteristics of this financial intelligence is that you should know how to minimize these losses to the most. A common misconception is that investing is a process that only involves money.

No, it is not. It has to do with a lot more than money that has a profound effect on our lives. Apart from the direct investment of money, an example would be you reading this article right now.

You are pouring your time and effort into reading an article that will highlight the various things that a new trader will have to go through to experience success in the world of crypto. That being said, without further ado, let’s dive in!

Pitfalls And Hurdles That New Traders face

Ask any investor that you know. No matter how good of an investor they are, they definitely would have suffered financial losses throughout their timespan as an investor.

This not only applies to virtual currencies. It involves all forms of money that are being traded as of the moment all over the globe. We mean stocks, penny stocks, foreign exchange, so on and so forth.

Whatever the form of money is, it is never 100% safe when it comes to being on an exchange platform. In particular, when we’re talking about cryptocurrencies, they have a higher chance of taking losses currently because of their exponential growth volatility and so many other factors.

That being said, let’s take a look at all of the downsides and obstacles that one faces in their lifespan as a trader.

  • How safe is your crypto

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There’s no point in having a lot of something if you can’t hold on to it properly. This is a matter of safety and security for your holdings. We live in a dynamic and technological world.

A considerable part of our world is built on virtual systems. They serve as an orifice to endless possibilities for the future. But as all good things come around, the bad stuff rolls in as well.

Your crypto is susceptible to cyber attacks by hackers and other offenders on the internet. Ensure to keep your money safe by using adequate and quality antiviruses and firewalls to go for.

  • Price Fluctuations

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Have we talked a lot about losses, right? Well, what do you think we mean when we refer to those losses? Losses in an investment context refer to the dropping in the price of your stock holding below the original price you bought it for.

And these fluctuations happen regularly. These can be very demotivating and scary for new traders on the market. Do not worry. Give it some time, and it will get better.

If you experience these losses, again and again, you might want to review your investment strategies once more.

  • No governing bodies

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Well, isn’t that supposed to be a good thing? Governing bodies are third-party bodies that oversee the contracts and hold legislations for a particular system. In our traditional financial world, these bodies are present throughout. They are a disadvantage to the conventional financial world as they set rules and regulations that are symbiotic.

What this means is that they craft legislation in such a way that they are beneficial to all parties. But the downside is that in the crypto platforms, a lack of this governing body would mean no security for traders who suffer a breach of contract.

Trading Tips For New Investors

Innovative work is more important than hard work. You could be toiling on your investing efforts for the rest of your life and not have any success, and that is one of the sad truths of life.

Likewise, you need to trade intelligently. Therefore, here are the tips that you could use in your lifespan as a trader for crypto :

  • Buy and hold

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One of the worst mistakes that new investors make is that they buy low and expect to sell high. But more often than not, they usually dip below the price they bought it for, resulting in a loss.

Now, this can be an excruciating thing for a new trader but hear us out. Don’t sell it right away. Instead, hold it for a more extended period. The price will go up again.

  • Bandwagon mentality

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A bandwagon is a vehicle with a band that instantly attracts people, and they proceed to get on it. The bandwagon mentality refers to the ideology of people following a thing or doing something just because a certain number of people are doing it.

This is a terrible thing to go with because if you go into a trade without knowing the upsides and downsides and merely doing it because your neighbor did it, trust us, you will regret it later on.

After all, more often than not, it usually ends up in losses. Therefore, be aware and informed about the trade before you blindly accept it.

  • Buying low priced stocks

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Buying low-priced stocks can be a good thing. But how it works on the crypto market is slightly different than on the regular stock market. Cryptocurrencies limit how many can be made at a time, and it is this supply and demand forces that determine this low price.

If you invest in crypto merely because it is low priced, you could again face losses.

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