What's Hot

    EU countries will be able to use blockchain to verify data on education and work qualifications

    08.06.2023

    Developer Sandbox has decided to leave the US market due to the “hostile to blockchain” strategy of the regulator

    08.06.2023

    Binance Starts Teaching Crypto Security to Taiwan Criminal Investigation Bureau Staff

    08.06.2023
    Facebook Twitter Instagram
    Friday, June 9
    Facebook Twitter Instagram
    Crypto News
    • Home
    • Bitcoin
    • Ethereum
      • Altcoins
      • ICO
    • Analytics
    • Blockchain
    • Other
      • DeFi
      • Mining
      • Regulators
      • Security
    Crypto News
    Home»Other»17 crypto investor mistakes
    7a2ec187f2d6f467ba9f6be544c4cd4d4a26ac33
    Other

    17 crypto investor mistakes

    AdministratorBy Administrator11.04.2022No Comments8 Mins Read
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Reading time: ~2 m


    An expert is one who has made all the mistakes in his specialization. But it is better to learn from the mistakes of others. After all, mistakes when investing in cryptocurrency can cost all investments.

    Let’s take a look at the most common mistakes in this article.

    1. Trying to make money on “insiders”

    If a project is talked about from all social networks, then this, as a rule, is already the final stage of the project and all the information is already included in its price. It must be understood that the information that an ordinary crypto trader receives is not insider information, because this crypto trader is at the end of the chain of investors who received this information earlier and used it. This chain looks like this:

    Project developers – project insiders – funds financing the project – large investors – media representatives promoting the project – retail investors.

    Therefore, you should not recklessly buy a coin, just because somewhere on social networks, supposedly, insider information about a particular coin has appeared. It is always necessary to conduct an independent analysis of coins.

    2. Do not take into account the price at which large funds entered the project

    Venture capital enters projects at early stages at prices 10-100 times cheaper than a retail investor can enter. It is always necessary to pay attention to the prices at which large funds entered the project and the period for unlocking their investments. After all, if they decide to exit the project or sell part of the coins, they will bring down the price due to their volume.

    This information is available on DropsTab, where you can select the coin of interest in the Fundrasing section.

    This is not to say that you should avoid projects where large funds have entered. As a rule, funds help the project with early financing, dissemination of information about it in order to significantly increase its value in the future.

    For example, the SOL coin was bought by funds for $0.25, and now it costs more than $130.

    There are no specific criteria for the analysis of funds. Qualitative analysis can be carried out on the basis of accumulated experience and, to some extent, intuition.

    3. Chasing windfall profits

    A yield of 25,000% looks very tempting. But it should be understood that high returns come with high risks. Almost all the stories that started with grandiose returns ended with no less grandiose falls. Don’t take high risks.

    Often, a 19.5% return on staking stablecoins is more profitable than trying to catch high-yield projects.

    4. Invest in empty projects

    There are projects that are fraudulent, or are financial pyramids. It is always necessary to study what value this or that project carries. It is necessary to study the history of the project and prices in order to understand at what stage the investor is and whether the current assessment of the project corresponds to the proposed product, and whether this project has a product at all.

    Even if an investor decides to enter such a project, it is better to do it at an early stage and withdraw profit from it.

    5. Do not take profit

    This is a continuation of the previous error. It is necessary to fix the profit. In order for emotions not to prevail, you need to have a pre-thought-out profit-taking plan. Having a plan will help you soberly see the picture and act without succumbing to emotions.

    There is a definition that the money in the market is the money of the market. An investor’s money is what he has withdrawn from the market and spent.

    6. Ignore new trends

    There have been a lot of trend changes in the cryptocurrency markets lately:

    • Axie → STEPN

    • DOGE → Shiba Inu

    • ETH → Solana / Luna / Avalanche

    • Cryptopunks → Bored Ape Yacht Club

    Those who invest in new trends and directions in time earn money in this market.

    7. Don’t follow microtrends

    Microtrends change quite often in the crypto market. You should not direct your attention to only one coin or niche. The market is changing, and being able to recognize small changes in time that can lead to the emergence of new directions is a big advantage.

    8 Ignore “slips”

    When exchanging cryptocurrencies on decentralized exchanges (DEX), investors often overpay up to 20% of the cost due to slippage of their order. As a rule, slippage is observed in markets with low liquidity, in very volatile coins, with small trading volumes.

    On the DEX, it is possible to manually set the amount of possible price slippage. On Pancake, the default slippage is 0.5%. Accordingly, an investor, having paid $100 for a token, will receive it for $99.5.

    9 Ignore non-permanent losses

    Intermittent losses occur when an investor farms 2 tokens in a liquidity pair (LP) such as BNB-CAKE.

    Those investors who are engaged in such farming will benefit from a non-permanent loss calculator.

    Managing fickle losses can save an investor thousands of dollars.

    10. Not navigating the phases of the market

    The cryptocurrency market, like regular exchange markets, has periods of growth, accumulation and decline. During periods of recession, it is preferable to hold funds in stablecoins, and during periods of growth, move the balance towards more risky investments.

    There are various indicators that can be useful in determining the current phase of the market:

    • time before halving

    • alt season and bitcoin market share

    • fear index

    • capitalization of the crypto market

    11. Unconditionally trust software solutions / robots

    Trading automation solutions or trading robots do not guarantee income. They may stop working, they may be hacked, the algorithm of such a system may not take into account changes in the markets. Even when using robots in your trading, you need to control their work.

    12. Have an overweight in the portfolio in favor of aggressive coins

    Do not overload the portfolio with high-risk coins that have multiple growth potential. Since in the event of their fall, the portfolio will sag significantly. It is necessary to strike a balance between aggressive investments, “blue chips” among cryptocurrencies and stablecoins.

    You should also consider dividing the portfolio into two components – separately for medium-term and long-term investments and separately for daily, short-term trading.

    13. Over-diversifying your portfolio

    Do not overload the portfolio with assets. It is difficult and time consuming to keep track of many coins effectively, their changes are difficult and time consuming. It seems optimal to have 7-12 different assets in the portfolio.

    14. Diversifying your portfolio is not enough

    The other extreme is not to diversify the portfolio at all and invest all the funds in one or more coins. It is considered optimal to invest no more than 15% of the portfolio in one asset.

    15. Do not close losing positions

    Holding a position, by all means, in the hope of a coin growth is dangerous. If the position went against the initial forecasts and plan, it is necessary to understand the reasons for this. And you need to have a pre-prepared plan in case the price moves against the position. Locking in a 25% loss is much better than losing 90%.

    16. Trust public figures

    Public figures can promote and advertise this or that coin or project while they themselves will not be included in them. Publicity and the presence of a wide audience do not guarantee expertise, honesty. Any decision to invest in a particular project is the full responsibility of the investor. He must make a decision based on his own analysis of the project or coin.

    17. Ignore the marketing component of the project

    The project can be very good and reliable. But if a large number of people do not know about it, then money will not come to it, the ion will not develop. Marketing is very important. If the project does not pay due attention to marketing, it is likely that the expectations of its growth in value are too high.

    The crypto market allows you to make money on it, mainly for those who approach investments consciously, follow financial plans and do not give in to emotions when trading or investing in various projects. Recommendations for investors and traders can be summarized in three main points:

    – think about the safety of your investments;

    – remember that you do not own all the information;

    — trust no one unconditionally.




    #crypto #investor #mistakes

    crypto investor mistakes
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Avatar of Administrator
    Administrator

    Related Posts

    Binance Starts Teaching Crypto Security to Taiwan Criminal Investigation Bureau Staff

    08.06.2023

    Coindesk told the story of a bitcoin encoder

    08.06.2023

    need to increase the requirements for crypto companies

    08.06.2023

    NFT Platform Enjin Forks Polkadot Efinity Parachain into New Network

    08.06.2023
    Add A Comment

    Leave A Reply Cancel Reply

    Recent Posts
    • EU countries will be able to use blockchain to verify data on education and work qualifications
    • Developer Sandbox has decided to leave the US market due to the “hostile to blockchain” strategy of the regulator
    • Binance Starts Teaching Crypto Security to Taiwan Criminal Investigation Bureau Staff
    • Analyst Predicts XRP Bullish Rally to $0.8 Resistance
    • Coindesk told the story of a bitcoin encoder
    Recent Comments
    • 수원출장 on A professor from a US university restored the Tornado Cash code to GitHub
    • 123 on Taproot support added to LND Lightning client
    • houston junk car buyer on 16,000% increase in social media mentions in 2021 Shiba inu
    • Jim Carrey Memy on Bitwise Launches NFT Tracking Index Fund
    • hotshot bald cop on Kava developers launch testnet with EVM support
    Archives
    • June 2023
    • May 2023
    • April 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    Categories
    • Altcoins
    • Analytics
    • Bitcoin
    • Blockchain
    • Ethereum
    • ICO
    • Mining
    • Other
    • Regulators
    • Security
    Meta
    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    Top Posts

    Subscribe to Updates

    Get the latest sports news from SportsSite about soccer, football and tennis.

    Advertisement
    Demo
    Facebook Twitter Instagram Telegram
    • Home
    • Bitcoin
    • Ethereum
    • ICO
    © 2023 Bt-Crow.com - CryptoNews

    Type above and press Enter to search. Press Esc to cancel.