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Cryptocurrency : Beginner trading mistakes that cost me a lot






Keep away from these 5 beginner mistakes. Study from my mistakes.

Picture by Jp Valery on Unsplash

Initially posted on

My trading journey began 5 years in the past when a good friend confirmed me an app on his telephone that he used to commerce Foreign exchange. He instructed me it was simple cash.

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I heard about trading and the inventory market years in the past in motion pictures like “Limitless” and the well-known “The Wolf of Wallstreet,” however I by no means understood how they work.

Earlier than I began trading, I used to be sensible sufficient to take some programs and educate myself. I took the XTB programs and received acquainted with charts, patterns, and indicators.

So, I began trading on the demo account and made some revenue, so I deposited cash into a actual account and began taking motion. All the pieces went nicely till I began to lose cash; a lot of cash.

“Why? Why can’t I make simple cash like everybody else does? Fuck trading! It’s all a plan.” That was my perspective in direction of trading till I spotted my mistakes and began to make a revenue.

These classes cost me $ 5000 plus $ 1000 misplaced in Bitcoin , however I share them with you free of charge, you’re fortunate. Okay, let’s see my mistakes.

Oh, earlier than we dive in, go forward and press the Clap button a number of occasions till it turns inexperienced and nearly exploded. It’s on the left facet of the display screen in the event you’re in your PC or within the backside left in the event you’re on a cell gadget.

Make the clap button dance for us

I traded cash that I used to be not comfy with shedding . All my month-to-month financial savings had been invested in trading and it turned an habit.

After shedding cash, I put a refund within the hope that I could make up for my losses. Seems like playing to me, don’t you suppose?

I used to be always checking the business utility, very harassed and panicked after I noticed the whole lot in pink. He didn’t know what he was doing. This brings us to my second mistake.

My technique was to earn a living, that’s all. I by no means carried out a confirmed technique for all three potential situations of a development (up, down, sideways). If the candle was inexperienced purchase; in any other case promote. Cool proper?

Properly fortunately I’ve a good article on a easy, but worthwhile, confirmed technique that you’ll be able to apply in any market.

Earlier than trading or investing, have a plan and be sure to perceive what you’re investing your cash in. Technical evaluation (trading) with out elementary evaluation is foolish for my part.

The reason being easy and I provides you with Bitcoin for instance. All charts and indicators point out a sturdy purchase, however the bull market cycle is over or Elon Musk makes one other tweet. Indicators are ineffective on this case.

One other instance is shopping for Tesla simply because the development goes up and the oscillators say to not overbought, however with out contemplating the P / E ratio of 800 (extraordinarily costly).

You already know that saying: “Don’t put all of your eggs in a single basket” . I didn’t know that and I put an excessive amount of cash into a single deal, which wasn’t a well-researched deal within the first place both.

There isn’t any normal rule of thumb for diversification, however you’ll be able to actually diversify an excessive amount of. The principle concept is select totally different markets (shares, commodities, actual property, crypto, and many others.) and purchase totally different property.

Now the best way I do it’s by trying on the cycles and the basics. For instance, I’m extra invested in cryptocurrencies and commodities than in shares and actual property.

It’s because I do know hyperinflation is coming, I do know we’re in a crypto bull market, and I do know that actual property and shares are overvalued. Once more, I’m not simply a dealer, but additionally an investor (technical and elementary evaluation).

Additionally, in crypto, I select solely the very best of the highest 10 on CoinMarketCap, and I don’t purchase dozens of crypto property. I did that and it’s the fallacious strategy.

Okay, I hope all of it is smart. Let’s transfer on to the following large mistake I made.

I used leverage with out totally understanding it. The issue with leverage is that if the market strikes in the other way, you run the danger of liquidation. Not solely that, however not utilizing a cease loss… haha… horrible issues can occur prefer it did to me.

Leverage is the explanation I misplaced a lot cash (to me, a median mortal). Leverage amplified my lack of awareness, technique, expertise, and diversification.

If you happen to don’t know what leverage is, let me simply clarify it like this: your funding (or% worth motion) multiplied by a proportion . In different phrases, if a market has 1: 2 (2x) leverage, that means it’s doubling the value change.

If the value goes up 5%, the leverage is amplified and you’re gaining 10%. Identical story if the value drops. You’re borrowing cash to take a position. $ 100 invested in a 1: 2 leveraged asset equals $ 200 invested.

The lesson is that if you’re a newbie or don’t perceive the right way to use leverage, by no means use it. The chance just isn’t value it.

The final however not least mistake is that I let my feelings management my trading and funding choices. In fact, no technique, overinvested, undiversified, leverage, all of this amplified my feelings.

Investing and trading should be 100% analytical ; with out feelings and intestine emotions. If you happen to can automate your trading technique, it’s wonderful. In any other case, know your plan and keep it up it doesn’t matter what.

Keep in mind that no indicator, technique, evaluation, no matter it’s, is 100% assured to give you advantages. It’s an phantasm that most newcomers like me had.

We’re working with possibilities and the thought is to extend the chance of constructing a revenue.

A confirmed technique, with the correct quantity of funding, with enough diversification, with out danger of liquidation, with endurance and with out feelings, will make you an unstoppable investor and dealer.

About the author

Donna Miller

Donna is one of the oldest contributors of Gruntstuff and she has a unique perspective with regards to Science which makes her write news from the Science field. She aims to empower the readers with the delivery of apt factual analysis of various news pieces from Science. Donna has 3.5 years of experience in news-based content creation, and she is now an expert at it. She loves journalism, and that is the reason, she moved from a web content writer to a News writer, and she is loving it. She is a fun-loving woman who has very good connections with every team member. She makes the working environment cheerful which improves the team’s work productivity.

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