Bitcoin is the most profitable trading tool of all time and the best type of investment, if you do it the right way. However, even the smartest and skilled traders often end up making silly mistakes that stop them from making a big profit.
Well, if you too are facing a similar situation and are unable to understand where you are going wrong, maybe this article can help you.
Most of the time, traders make blunders that they are unaware of. The point is when you start recognizing your blunders and start making smart moves instead, then you will be able to be a better Bitcoin trader.
Want to know the most common blunders in Bitcoin trading? Well, keep reading!
- No stop-loss target
Most of the beginner traders do not understand the importance of word stop loss and prefer to trade without setting a stop loss target. Many traders think that this stops them from earning huge profit and soon after they are stopped from trading, the price hikes to such a point where they would have been all excited about earning profit. This is why many traders just avoid stop loss and set profit orders instead.
Though it can be helpful in some situations to earn money with Bitcoin, many times it may so happen that the price of Bitcoin may drop to not rise for a wrong time and then you have to face a huge loss.
- Trading multiple cryptocurrencies
One major hindrance between crypto-traders and their success is trading too many cryptocurrencies at one time. However, this should not be done as it does nothing good but only distracts and frustrates you as you cannot concentrate on anyone and have to keep track of all the cryptos’ market trends at once. It may confuse and stress you out.
It is better to trade fewer cryptos and became a specialist in a particular cryptocurrency.
- Going by the rumors
Going by the rumors can be bad. Many times you may hear from your friends or near ones that a particular cryptocurrency is going to hike up in the future. You can easily be swayed away by the rumors and may end up committing the mistake of following their advice. Trust me; going by the rumors does no good.
- Assuming the price cannot go any higher or lower
“Oversold “or “Overbought” is one of the most common terms used in crypto-trading. It is very important to learn and understand the oversold or overbought market when learning about crypto-trading. It will help you when to sell your cryptos and when to wait for the right time. The truth is that the cryptocurrency market can remain oversold for a long time. The same goes for the overbought trend.
- Using too many indicators
The discussion about Bitcoin trading and indicators is as old as the Bitcoin trading itself. There is a huge number of misconceptions when it comes to using indicators. Some of the traders put a lot of indicators on their chart as they think that it will help to avoid the misleading trading signals. This approach often ends up in bad results when all of a sudden the reader feels overwhelmed by the amount of information he/she has to process. The trader then often ends up taking the wrong decisions.
- Changing strategy too often
A trader should not give up just because he lost a couple of trades in a row. Sticking up to your strategies a little longer will help you achieve better results in long-term trading.
So, these are the common blunders that you should avoid for a better Bitcoin trading experience.