Hi Guys!
Thanks for reading this. This my second post here and in this post i will be sharing my crypto trading mistakes and the lessons i learned from them. I am not an expert trader when it comes to crypto currencies but i have done gold and silver trading. These are based on my personal experience with crypto trading. So lets get started.
Buying at the wrong price
During my first few days i was just randomly buying currencies that were on their record high(its kinda stupid) which sometime did work but most of the time i ended up selling them on a much lower price. It took me some time to realize that the basic human logic do not work in the crypto market if it did no one will be losing money.
The problem is that when the currency gains too much in a very short amount of time it is quite likely to crash because there is not enough support to keep the price at that level or take it higher.
Lesson Learned
- Buy when the stock is under priced and sell when it is over priced
Avenging the Loss
As you may have guessed by the title this one is quite interesting. When i started to lose significant amount of money i started to panic and just wanted to earn it back by opening more trades. And this is the worst thing to do when you are losing because at that time you are more likely to make wrong decisions.
But after a few days of trading i realized that stocks going down is a normal thing and you should not panic when it happens its quite possible to go back up. So do not sell without being sure that it wont come back up.
Lessons Learned :
- It the loss starts to bother you just take a break
- Remember you only lose or gain when you actually sell
The day trader
When you are day trading you are trying to make profit by cashing on the price changes during the day. In my early days when i used to be a day trader i was like opening a trade every few minutes or so and you can imagine how much research i did before doing so. This is not a good trading strategy in my opinion(at least for me because i am not a full time trader) because it takes too much time and it increases the number of trade frequency which can increase the chance to making a wrong decision. Remember it just takes one bad decision to lose all the money you earned in the last few days or even weeks. Another reason of day trading not being a good option is that the market will have its bad days when volatility will be low.
Lessons Learned
- One bad decision can cost you a lot.
- Trade less research more.
The No Lose Mentality
In the early days i always wanted to win every trade and as a result i just increased my loss by letting the price go even lower in hopes of recovering the loss. Obviously no one wants to lose their hard earned money but unfortunately in the crypto market you have to realize and accept the fact that you will lose on some trades and gain/win on the others. In order to be profitable you will have to have a higher gain/win percentage.
Lessons Learned
- Keep the win % higher than lose %
- Keep the average profit/trade higher than average loss/trade
Not having a plan
A few days back i sold a load of stock of a crypto at a very low profit and the next morning i woke up and the price of that crypto was 2000% higher than when i sold it.Oops! it literally cost me thousands of dollars. You should always have plan to how much profit or loss you are willing to take with a trade.
Lessons Learned
- Do not be impatient.
Conclusion
Obviously i have made a lot of stupid mistakes but i was able to learn and improve my strategy. I hope putting them out here helps the beginners. Crypto market is much more volatile and unpredictable than any other market but eliminating these common mistakes will reduce the risk.
If you enjoyed reading the post be sure to follow me @danie93 and up vote the post.
Be sure to share your mistakes below in the comments.
Thanks for reading :)
Cheers Danyal
Thanks, this post is great for beginners like myself. I've just started learning the basics & I always have that thought in my head about making the wrong move & loosing it all. It's sad to say but I hope to have learned from your mistakes.... Thanks for the info! Followed & Upvoted!
Thank you @agstakzzz
thanks for your tip
i have been this field since may 26 and als bought steem
your tip is very useful for steemers
in korea, now the steemit is very famous
as you know, in korea, the internet infra is very good
any place can access steemit.com
also i am using www.coinmarketcap.com
and put some post it in korean language
pls inform us if you know any site which useful or need to know coin invester
Went through these same mistakes in my first month of trading! Thanks for sharing.
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