The Top 5 Beginner Crypto Mistakes - Don't Make These
1. Buying High / Selling Low
Here is the advice that everyone hears when they join any market.
Buy low, sell high.
Granted most people don't listen to this advice.
The mind can play many tricks, and one of them is the thought of making it big because a coin is spiking in value.
But the truth is - you won't.
Buying a coin at its all-time high (ath), or because the wave is pulling you in typically is showing the opposite pattern from what you want to happen.
Instead, look for coins at a low, that have enormous potential and buy those.
Anything that has retraced past 60% on the charts (using a little technical analysis) is probably a good bet.
And then play the waiting game.
Hype isn't a good thing; its definition is indicative of great promotion.
Wait... Relax... Profit.
2. Jumping Into A Coin Blind
Not researching with cryptocurrency before buying it is akin to going for a swim - without knowing how to swim.
It probably isn't going to turn out how you wanted it too.
When someone does research, typically they know if a coin is right to buy or not.
Here are a few things to always research:
- The Team
- The White Paper
- Technical Analysis
After having these few variables, you should have a projection at how the company will fair in the long run.
Maybe they are entering a big industry, or trying to take out a titan, or have the possibility of making billions...
Odds are it's a good company.
But buying a coin based on speculation with no research will probably lead to a loss of money, short-term and long-term.
Learn How To Buy Bitcoin and Alt-Coins Using Our Free Guide Below
3. Running With A Pump n Dump
In the cryptocurrency ecosystem pump and dumps are very common.
While recently Bittrex sent out a warning to conducting pump and dumps, there are hundreds of telegram groups helping to create them.
What's a Pump and Dump?
Typically a pump and dump is the artificial increase in the price of a coin.
Followed by a massive dump of it.
And the worst part is.
It usually only affects the beginners.
These are usually orchestrated by someone who has a massive stake in the coin they are pumping.
You and your friends help buy at crazy high prices, which is while the whales are selling.
And then the price crashes, and you are left with a horrible coin, at a low price.
It's the easiest way to lose money and hope in cryptocurrency simultaneously.
Now on the other hand, if you did research into the coin and bought low when your coin is pumped you can sell at the high.
Just don't be swindled by these get quick rich pump and dumps.
4. Cashing Out For No Reason
This may surprise people, but it happens a lot.
Cashing out because you think you need to hold the money.
Yes, the market is volatile, but you may regret it later on.
I know I do.
I (Austin) sold .5 BTC at $2000, only months ago, that made me shudder today (since it would be worth almost $7000.)
Instead aim for financial freedom, paying off debts, and holding for the future.
If you need the money, then it is yours, and you can do what you please.
Paying off debt is also a valid reason for taking out some BTC or alt-coins.
Although, just to hold the money is like trading your Lambo for a slow public-transit bus that you can't control.
Hold your cryptocurrency and profit in the long-term.
5. Being Impatient
Warren Buffet said:
"The Stock Market is a device for transferring money from the impatient to the patient."
There is a reason that the people who do uninteresting trading in the stock market make the most money.
By holding long-term, evaluating the coin and not getting swayed by hype, there is a huge chance of making a lot of money.
Not a few hundred dollars, but thousands of dollars.
Without doing anything.
Granted it will be annoying and possibly stressful.
Because quite literally you are letting your money sit and grow without doing anything.
Your money is making you more money.
Which means you need to be patient, take up a hobby, check the news (cryptocurrency not world news) and relax.
Those are a few tactics to avoid the newbie pitfalls.
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Thanks for reading,