When you are a beginner in the industry and want to invest in cryptocurrency, you often make mistakes and lose your money. Many new investors come because they have heard about crypto through the media, the internet or friends.
It is therefore essential to enforce 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 thinking
Everything has one Technical aspect, especially cryptocurrency and crypto trading. Investing your money in an asset you don’t understand is the ideal recipe lose capital.
Before investing, you should study and understand the purpose of the project you are targeting or the purpose of the token. In general, educating yourself before making any investment action will ensure that you get a best investor.
You should always take that into account your money is the target of the worldit is up to you to establish a strategy to study crypto projects, understand the technical manifestations of the blockchain.
2. Ignore transaction costs
In crypto trading and especially in Defi, each transaction costs a fee, called “gas costs”, which can be translated as fuel costs. When a user makes a purchase, sale or other action, he pays a transaction fee.
These fees always vary depending on the number of transactions per second and the blockchain. As an illustration, running an operation on the Ethereum network varies between $1 and $10 in ETH or even more depending on the network overload.
In addition, gas costs have a very specific purpose. They serve, among other things, to protect the blockchain. Gas is also used for it correlate the cost of operating the Ethereum network with the price of ether.
When you do a lot of transactions, especially on the Ethereum network where the fees are very high compared to other blockchains, you realize that there is an astronomical amount that goes into these fees, adding them up.
So you should always be vigilant about this in the long run to save your money.
3. Invest in cryptocurrency: think short term
Many new investors come in thinking they will get rich in less than a year thanks to crypto trading. This is a common mistake many imagine when looking at the situations of some who have been successful with crypto.
Do not be Blindbecause whoever says he will get rich quickly, also says he will become poor quickly.
4. Thinking crypto trading is “free” money
The volatility of this new market is very high, it is an indisputable fact. But every turnout has its own decreasing equivalent, and the truth is that nothing is easy.
It is even more difficult to keep a cool head than in the traditional market. Assuming that crypto is money that fell from the sky, we run straight into a wall.
You always have to be satisfied of his merits and abide by his investment strategy.
5. “All-in” your capital in crypto trading, investing all your money in one go
In crypto trading it is mandatory don’t invest all your money at once and separate it by percentages.
To be profitable without entering the lottery, you must have a “money management”a spreadsheet that allows you to lose this or that percentage of your portfolio, because all the money invested should be considered lost.
It is therefore strongly discouraged to use that a certain portion of the capitalpredetermined, and to keep funds unexposed.
6. Invest in cryptocurrency because the price is low
After a crypto has made a big performance from its low, buying it just because it has bottomed out again extremely seductive, imagine watching her rise to her highest level again and get rich.
It can indeed be interesting to position yourself in this way, but the decision has to be made arguments. Buying ETH because it is low has nothing to do with investing in a cryptocurrency that is not well known, even if it has made a large multiple before.
7. Having an overly complicated strategy
New crypto investors immediately use complicated trading strategies because a YouTuber or social media influencer told them to, without even understanding the basics of trading.
As in all cases, these will lose their money and go To leave the strategy see the total investment.
It takes time to learn technical analysis and how crypto markets work. The best trading school is experience with yourself.
In fact, investing in crypto currencies can be easy, it is possible to invest without always being at the front of the charts of crypto assets by actively trading.
8. Invest in cryptocurrency: pay attention to the leverage
The principle of leverage is extremely dangerous, especially in the crypto market. Since the volatility of these assets is extremely high, the use of leverage is dangerous, if abused. It is a tool that should be used with extreme caution.
It works both ways: it can do just as much lose a lot than gain a lot.
To be on the good side of investors, leave nothing to chance and neglect nothing. Taking this into account, you are on your way to success!
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