The more you educate yourself about the crypto world, the more you maximize your profit. There’s much to learn and much to gain but always remember there is also much to lose when you are a beginner.
The crypto market has gained a massive boost in the past 10 years, at the all-time high, market cap has been reaching close to 1 trillion dollars.
The fact that the number of crypto-related apps are slowly conquering the top lists off Apple’s Appstore says it all.
However, unfortunately not everyone is making profit, most of the traders that are losing money are new traders that are clueless to this new expanding world.
Luckily the majority of these errors are easily avoidable. So here’s my “Top 5 cryptocurrency mistakes” you should avoid.
1. Not doing your own research
Any trader, in any market will tell you this is the most crucial rule: Always educate yourself, especially before investing your own money!
Today in the 21st century and we are all smart buyers. Before we spend our hard-earned money anywhere, we always make sure we’re getting the best bang for our buck.
We all are familiar with this simple scenario: We want to purchase something online, let’s say a new backpack. The first thing we do is build a picture in our heads of what this backpack is for, how we want it to look, and at the end of the process, how much we’re willing to spend for it.
So next, we go online and start researching using the idea we just built in our head as a guideline. We read other people’s reviews regarding the backpack, their insights, their recommendations etc.
Then finally, after we feel confident enough regarding the bag want, we continue to purchase the bag, but for the lowest price possible. In the cryptographic field you shouldn’t act otherwise.
Do your own research:
- Learn the basics:
Get a good understanding what cryptocurrency’s are. Know the basic difference between bitcoin and Ethereum. What is blockchain? What’s a good coin for holding or trading? What are Dips, peaks? These are key factors to your success .
What technology is behind the coin you want to invest in? Was it invented for a reason? What reason? The better the reason the bigger the chances it will bring growth and investors.
What are your goals for the cryptocurrency world? In my experience marking goals will always give you a map – showing where you are now and where you want to be. Like in life, always have a plan. This basic step will guide you through the rapidly changing crypto world.
- The team:
Learn your coin further than the technology or the idea. Learn who’s behind it, who are you giving your money to? Do you trust them?
2. Not being involved
One of the main concerns regarding the crypto world is the fact that it isn’t regulated. This leads to unexpected market fluctuations.
The best we as traders can do, is to share knowledge with each other.
The web is filled with forums, YouTube videos, and various platforms that provide a range of discussions, charts, speculation and predictions regarding the crypto world.
It is important to be a member of such forums and communities in order to understand the current heartbeat of the market.
This key rule will diminish the scary unknown factor from the market, but it is important you don’t rely on only one source of information.
Get a wide range of opinions and insights. You will quickly understand which ones are credible and worth your while and witch aren’t.
3. Not remembering your privacy and security measures
Your money – Your Responsibility. The moment you forget your private key, there is no going back.
No one but you must know the key and the security words. These are your ID’s for making purchases and transactions.
There is no way you can retrieve the forgotten codes, there are various stories of traders that purchased bitcoins when they were worth 2 dollars and forgot about their existence, furthermore there keys and passwords.
Today they cannot withdraw their money which is worth well over the millions.
To overcome that fear, the creators of the Bitcoin and the whole cryptocurrency world put our security and privacy as the highest priority.
They understood this basic fact – in order for this concept to work, there must be no room for error, fraud or money laundering.
That is why they took the highest security measures by using the latest technology’s in order to secure your privacy and more importantly, your money.
Every trader with the most basic idea of how Blockchain works understands how highly unlikely it is to commit fraud in the crypto world because of its decentralized nature.
My basic rule to avoid this is to keep a hard copy of those numbers and key words in a safe physical place – at home or other trusted place.
4. Not learning about scams and fake ICO’s
Sadly, like in every money-based world, there are ass#@*s who just want to steal our money.
Same goes for the crypto world. That is why you have to keep your eyes open before investing your money. This rule takes me back to the number one rule. Do your own research. Know the history of the coin. Know what it represents.
Do they look legit? If you don’t feel comfortable, start researching online, use the community, forums etc.
Sadly there are a lot of ‘shitcoins’ out there, but if you take the basic measures I put out, you are minimizing your risk.
Another field that is the most vulnerable to the sham business are the ICO’s (initial coin offerings).
This field can be very profitable, but also very risky since you don’t really know who is legit or not and who will succeed or not.
But the majority of them are a very good way to make real profit. Think of it as a startup company that wants your money for investments so they can start their journey.
5. Keeping all the eggs in the same basket
One of my main insights from the cryptocurrency world is to Diversify.
Unfortunately, I have learned this on my own pocket, the turning point for me was the day I started to diversify.
Diversification basically means expanding your investments so you don’t have all your “eggs in the same basket”.
Now, don’t go on to invest in 1000 coins! You won’t be able to keep up with the pace, and you will quickly lose your way and your plan.
Diversifying is all about risk sectors and not only about the number of coins. This way you reduce the risk of any sudden dip.
Even though this does reduce an amount of profit, it keeps you secure and prevents you from being “all in”.
I hope these basic guidelines lessened your concerns and gave you the tools for your new cryptocurrency journey. Stay tuned for there is much more to come!
I AM NOT a financial advisor, furthermore, always consult with a qualified professional before taking any financial decisions. These articles are based purely on my own experience, which I would like to share with the rest of the world. My main goal is to make the cryptographic world simple and understandable and at the end – mainstream.
Check out other posts on our Blog – there is a bunch of useful information there!
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Share the information so other people can start to avoid making these basic mistakes, and as always, we want to know your thoughts, so leave a comment! Question, suggestion, we want to know! 🙂