The crypto world experts have figured out the following mistakes when investing in the cryptocurrency market:
1. Buying the red selling the green
In simple words, you should seldom buy the high and sell the low, just like any other market, and so is the Fear Of Missing Out, it plays with people’s feelings when everybody else is placing buying orders and you feel left out, you go do the same, the very next day, the colors turn red, you go scared and sell off as soon as the chart keeps on going down, well that’s not what a wise investor do, You must be greedy when others are fearful and vice versa.
2. Entering without a well-defined plan
Following the herd mentality costs you more time and money, in contrast, you have to understand the market and put your investing goals, learn about various strategies and align them with your goals, the financial ones, is it a long or a short term investment? What’s your desired return on investment? And many more points.
3. Buying a token just because it’s cheap
Please don’t make the mistake of looking at the price of one unit of a cryptocurrency, instead, it’s better to look at the market cap (unit price*supply).
4.Not having an exit strategy
Keep in mind that your profits are made once you sell your assets, not while holding them (even if it’s 100x) for that you have to have a solid exit strategy, that functions only on theories and concepts that are proven to work in the past, not on emotions (you already know that),
One of the best exit strategies is to sell a percentage of your asset when you reach a (previously set) target.
5.Buying tokens just because you expect it’s going to rise in price
Just like it’s mandatory to have an exit strategy, the entering should also be wise and strategic, please do not rely on expectations as they’re the killer in this market, it can go down the same way you expect it to go up.
6.Very short term as a beginner
This mistake is also related to Investing based on emotions with so little research it’s the best way to lose your money, instead, put your investments for the medium or long term and in the meanwhile start learning how the short term market works, it’d help you save more money than you can easily lose or pay on taxes in the USA for example.
7. Buying what you cannot afford losing
Every investment has to be made wisely, considering that you can lose 100% of it, especially in such a volatile market, remember: no investment should ever make you bankrupt, as this can also affect your personal life.
8. Not having a diversified portfolio
Do you already know the famous saying to not put your eggs in one? Basket! Exactly, please divide your budget and put those tranches in various cryptocurrencies you had made a research about, and even divide the orders into different prices and time intervals.