The cryptocurrency craze is spreading like fire in a jungle, receiving huge hype and worldwide acceptance. The global crypto market cap has topped the 3 trillion dollar mark for the first time in crypto history. Seeing this enormous success, everyone now wants to be a part of the Blockchain technology.
After years of helping and assisting people to find their feet in the crypto space, we see new traders making the same mistakes repeatedly. Though a person can make the most out of a cryptocurrency without being a professional, cryptocurrency is not something you can master in a night.
To minimize the loss and maximize the profits, the best way is to learn from the mistakes of other people.
Here, we want all our traders to make the most beneficial trades from Day 1 in the crypto world. We will explore some of the basic and very common mistakes that crypto users and investors make. Moreover, we will learn to protect ourselves from these unnecessary losses.
Table of Contents
Choosing the Wrong Exchange Platform
Before you start trading, you must choose the right cryptocurrency exchange platform. Unfortunately, this is the step where most of the users and traders rush into and end up making mistakes.
Here are some tips that you need to know before choosing the right exchange platform according to your demands and requirements.
An exchange platform should be user-friendly and simple to use. It should have a huge selection of crypto assets and offer fewer charges for all services. Moreover, one should be able to make purchases fiercely through AUD and the platform must be authentic and secure. What’s must is it should be reliable and have proper customer support? Most importantly, it has to be regularly updated and offer useful trading features.
Coinbase, Gemini, Kraken, Bitcoin Trading Software, Uniswap, and PancakeSwap are some of the best exchange and trading platforms to use.
Believing Everything You Read and Hear
Not all pieces of advice are right and especially in the world of crypto, it is better to not listen to every piece of advice. A very common mistake newbies make is they follow every tip and advice they see on social media.
The internet is extensive with crypto trading advice and a lot of which is foul and deliberate.
Many major news channels and sites also release vague pieces of advice and tips about crypto trading and negative news about cryptocurrencies. It is always best to keep in mind that a lot of these news articles and overstated headlines are just for increasing viewers and creating controversies.
If you are taking anyone’s advice, go for authentic advice for experts who have experience in this area.
People who want to avoid risks and gain maximum profits must make investments in different cryptocurrencies. This strategy is way more effective than just investing in one cryptocurrency. It is less probable that all cryptocurrencies will crash together. Furthermore, you can always go for a self-made strategy according to your trading style and goals.
It is best to have a blend of the most famous and largest cryptocurrencies with some medium-sized, small kryptos by market capitalization. An 80/20 mixture of large cap and small cap is always better to go for if you are new to crypto investing. It saves you from huge risks.
Here we have an example of a diversified cryptocurrency portfolio.
It should have 405 Bitcoin, 20% Ether, and 30% other leading alternative coins (altcoins) like Dash, Litecoin, Monero, Ripple, etc.
Not Doing Proper Research
Always follow the DYOR (Do Your Own Research) rule. If you are an existing crypto member, you must have heard this a lot. Doing thorough research is always needed and is crucial in the crypto space.
Whenever you receive any information from anywhere, make sure to do your research first. It is also important that the source should be reputable and trustworthy. Also, always see if you need their advice or if you are good on your own.
Before entering the crypto market, get your answer to the following questions.
- What does crypto bring to the market?
- Who are its competitors and why should you invest in it?
- What makes it different from its competitors?
- Is it temporary or permanent?
YouTube, Twitter, and Reddit have authentic information about cryptocurrencies.