Top 4 common mistakes for the cryptocurrency traders
The professional traders are using cryptocurrencies to make a big profit. Compared to the regular currency pairs in the Forex market, the volatility of cryptocurrencies is much higher. When the volatility of a certain asset is higher, traders get a unique chance to earn more money. Things might be a little bit challenging at the initial stage but once you learn to take advantage of the volatile market condition, you can trade like a pro. Many brokers have already listed the major cryptocurrencies for retail traders.
In this article, we are not going to teach you how to buy crypto like the professionals at bigX. We are going to highlight the top 4 mistakes that can ruin your trading career.
1. Trading with high risk
Taking too much risk in the trades is a very common problem for the rookie traders. The majority of investors try to think the market volatility will not be available in upcoming days. Some often think they have once in a lifetime trade setup. Such thinking usually forces them to trade with high risk. Eventually, they blow up the trading account and lose their entire trading capital. The importance of money management is not known to the rookies. They are taking random steps in the crypto trading industry with the hope that they will become rich. By doing so, they are just blowing up the account.
2. Trading without having any strategy
You must have a valid trading strategy to make a consistent profit. In order buy crypto at the perfect price, you must have the analytical skills to find the critical support level. A support level is such a price point, where the bulls take control of the market and start pushing the market higher. In most cases, the rookies don’t have any knowledge about support and resistance. They place random orders without thinking about the key points of the market. You have to create a unique trading strategy you can use to make some good trades. Forget the idea that trading is more like making big profits without following the key rules of investment.
3. Ignoring the major news
Ignoring the major news is a very big mistake. Due to the sophisticated nature of the crypto trading industry, it is crucial to understand the impact of major news. In most cases, rookies don’t know why the price of a certain asset goes up or down. But if you dig deep, it won’t take much time to realize the news is the key price driving catalyst. Once you start the realize impact of major news in the global crypto industry, you will never place the trades without assessing the news factors. After you become good at analyzing the news, you have to relate it with the technical analysis process. With this combined approach of technical and fundamental analysis, you should be executing the trades.
4. Trading with emotions
The emotional traders are always losing money. They don’t have any control over their greed or fear. This lessens the confidence level and forces them to quit trading after losing a few trades. In some cases, traders keep losing money and becomes more emotional. Emotion directly fuels aggression and forces you to make a big mistake. The smart traders should be well aware of this fact, and trade the market without having any emotional attachment. Once they become good at managing the emotion, they can find the faults and fix the issues. But learning to tame emotion is not child’s play. You have to educate yourself about the different aspects of this market. Most importantly, you have to believe in yourself. Once you master this technique, you can trade with a high risk to reward ratio and recover the losses without having any hassle. So, build your confidence level to become a skilled trader.