When you are new to the industry and want to invest in cryptocurrency, it often happens that you make mistakes and lose your money. Many new investors come because they have heard about cryptocurrencies from the media, the Internet or from friends.
It is therefore essential to impose 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
Everyone has one Technical aspect, in particular cryptocurrencies and cryptocurrencies. Investing your money in an asset you don’t understand is the ideal recipe lose capital.
Before investing, you must study and understand what is the purpose of the project you are addressing or what is the usefulness of the token. Generally speaking, educating yourself before any investment action will make you a best investor.
You should always keep this in mind your money is the goal of the worldit’s up to you to establish a strategy to study crypto projects, understand the technical aspects of the blockchain.
2. Ignore the transaction fees
In cryptocurrency trading and especially in Defi, each transaction costs a commission, called “gas tariffs”, which can be translated into fuel costs. When a user makes a purchase, sale or other action, he pays the transaction fees.
These taxes always vary depending on the number of transactions per second and the blockchain. To illustrate, running a trade on the Ethereum network varies between $ 1 and $ 10 in ETH or even more, depending on the network overhead.
Furthermore, gas costs have a very specific purpose. Among other things, they serve to protect the blockchain. The gas is also used for decorrelate the management costs of the Ethereum network from the price of the ether.
When you make a lot of transactions, and in particular on the Ethereum network where the fees are very high compared to other blockchains, you realize that an astronomical sum goes into these fees, adding them together.
You must therefore always be vigilant about this in the long run to save money.
3. Invest in cryptocurrency: think short term
Many new investors arrive thinking they will 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 cryptocurrencies.
Not be blindbecause whoever says he gets rich quickly also says he gets poor quickly.
4. Thinking that cryptocurrency trading is “free” money.
The volatility of this new market is very tall, it is an indisputable fact. But each increase has its own falling equivalent, and the truth is that nothing is easy.
It is even more difficult to stay calm than in the traditional market. Thinking that cryptocurrencies are money that fell from the sky, we run straight into a wall.
You always have to be fulfilled of his earnings and stick to his investment strategy.
5. “All-in” your cryptocurrency trading capital, investing all your money at once
In cryptocurrency trading, it is mandatory not to invest all your money at once and separate it by percentages.
To be able to be profitable, without playing the lottery, you must have a “money management”a spreadsheet to allow you to lose this or that percentage of your portfolio, because any money invested is already considered lost.
It is therefore strongly recommended not to use it than a certain part of its capitalestablished in advance, and to keep funds unexposed.
6. Invest in cryptocurrency because the price is low
After a cryptocurrency has achieved a great performance from its low, it is only possible to buy it because it has returned to its low. extremely tempting, imagining seeing her rise to her highest again and become rich.
It can be really interesting to position yourself this way, but the decision must have subjects. Buying ETH because it is low has nothing to do with investing in a cryptocurrency that is not known even if it has made a large multiple before.
7. Having an overly complicated strategy
New cryptocurrency investors are directly using complicated trading strategies because a YouTuber or social media influencer told them, without even understanding basic trading principles.
As in all cases, these will lose their money and go leave the strategy sees the total investment.
It takes time to learn technical analysis and how cryptocurrency markets work. The best trading 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 cryptocurrency charts by doing active trading.
8. Invest in cryptocurrency: watch out for levers
The principle of leverage is extremely dangerous, especially in the cryptocurrency market. As the volatility of these assets is extremely tall, the use of the lever is dangerous if used improperly. It is a tool to be used with extreme caution.
It works both ways – it can do the same lose a lot than win a lot.
To be on the good side of investors, you don’t have to leave anything to chance and don’t overlook anything. Taking this into account, you will be on the path to success!
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