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Becoming a crypto millionaire is not as easy as it sounds. However, with the right investment strategy, you can make it much easier. To do this, you must avoid common mistakes in investing in cryptocurrencies.

People often lose money because of personal mistakes. This is a serious problem because it is very difficult for those who do not have enough knowledge of this technology to use and maintain multiple digital currencies. Not many mistakes can be made in this area and some mistakes may cause you to lose all your assets.

In an effort to ensure that crypto enthusiasts have a lucrative future, we have selected a final investment strategy for digital currencies that includes a list of common mistakes that should be avoided when investing in crypto space. By learning from the mistakes of other investors, you will be able to potentially avoid increasing costs and potential losses. Even if you make these mistakes, do not be hard on yourself and focus on growth. To help you, some of the most painful and common mistakes that are commonly associated with entering the crypto world, and a list of the biggest mistakes of crypto investors are given in this article, so stay tuned.

Common Mistakes in Cryptocurrency Investments

When investing in the world of cryptocurrencies you may encounter many mistakes that can cause you to lose your assets. We will try to tell you all the common mistakes in digital currency investing below

You are looking for cheap coins to invest in!

According to celebrities, one of the mistakes is to chase cheap coins in the hope of buying a Lamborghini and a private jet. Many untrained investors in crypto buy low-priced digital currencies and think they will have a better chance of making a profit!

For example, if such a person were offered two coins priced at $75 and $0.01, they would most likely buy the blindfolded coin for $0.01; because he thinks he will be able to double his fortune, and this coin is more likely to go from one cent to two cents. In fact, this is not true and is a common trap.

There are many factors that affect the price of a coin, including two important factors: its current inventory and the value of that coin in the world. Usually a cheap coin has a lot to offer. The number of coins in circulation can exceed one billion coins, in which case it is clear that the price of each coin will go down. If supply is high and there is little demand in the real world, the price of a traditional coin will not be lower than its real price, and its price should remain the same.

When looking for coins with high growth potential, there is another important factor to consider, and that is the market value of those coins. Market volume is calculated by multiplying the number of coins in circulation by the current price and is often a better indicator of the value of a coin by investors; although this indicator is not perfect.

If you want to find the next most valuable coin, look for coins that have a lower market size than other coins. These quinces will have more potential for growth if they climb; yet there are more risks involved. These are risks such as project failure, lack of liquidity and so on. Finally, if you are an amateur, you should avoid such coins, and when you put a currency in your shopping cart, you should only focus on its potential in the real world. So do not be fooled by cheap coins.

You think that you are always on the right track

We are sorry to say this, but you have to overcome yourself. You are not always right and if you make a mistake, it is not a problem. It must be said that investing is a risky game and luck is involved in it.

To succeed in this space, you need to tell only X% of the time correctly and predict correctly. For instance, if you can double your capital 51% of the time, then you will be able to lose it 49% of the time; if you have invested the same amount in all investments. Investing is a systematic game that if you are at a loss, you have to stop it, and if you are at a profit, you have to make a profit and plan.

You know less about commissions!

Use your time and research to choose the right exchange with the best commission. Coinbase Pro and Binance are two of the largest and most trusted digital currency exchanges with reasonable fees.

People who are just starting out are trying to make many trades a day to earn one percent here and five percent elsewhere. Although in theory, the idea of ​​these people seems good, but eventually they will fall victim to commissions. There are a number of in-depth savings strategies involved in saving commissions that you should be aware of. When making a profit, make sure you make it after paying the commission.

You invest your life savings!

The first law of investing is that we should not invest more than we can afford to lose. This means being prepared to lose what you have invested. Ultimately, as the price goes up and down, you need to stay calm and still have a healthy life and be able to spend normally. We have heard countless stories of fear from people who have greedily invested all their life savings or borrowed large sums of money. This is a very big mistake.

Since if you make a big profit, greed will eventually overcome you. For example, if you invest $50,000 and make $150,000 somewhere, your mind will rationalize and normalize this success, and you will feel that this success is less prominent than it actually is. After a while, the market will fall and you will be in a Break Even or loss position.

There seem to be many horror stories about crypto millionaires who think their funds will continue to grow forever and that they will lose the opportunity to sell at a profit. Then these people will be at a loss and will be waiting for the next bullish market. The best way to avoid such a situation is to have a plan that will take us to the next point.

You have no plans to follow!

As mentioned earlier, many people have high expectations of themselves, and when their shopping cart reaches its highest point in history, they just want it to go up. On the other hand, as a coin goes down in price, they keep it at zero, and that is because of their stubbornness about investing.

The best way to avoid this situation is to have a goal for yourself, stick to your goal and not be greedy. So when you get into a situation, be sure to have a plan. This brings us to two other points. Be clear and unequivocal about receiving your profits and cutting your losses.

It is easy to be stubborn, but in the end, the market continues to move despite your feelings. There is no right or wrong here. If your plan is to prevent a loss of 15%, then do it and it does not matter how you feel at that time. Do not convince yourself that the price of this asset will rise again; Avoid losses and trust your plan.

Do you want your investment strategy to be profitable in the end? If so, you will eventually have to sell and make a profit. Learn from the mistakes of others; by the end of 2017, during the boom in digital currencies, many investors would have become rich if they had sold their currencies for profit. On the other hand, many expected to pay dividends in return for their investment; But they kept too much capital in this bear market; Remember that you will not make a profit until you sell. If your plan is to make a 25% profit, then stick to your plan.

You sell when you should buy and vise versa

We bet that when the price of Bitcoin was $15,000 or $20,000, you would be interested in crypto, or if you had already invested, people would ask you about digital currencies; because it is blind obedience to the sum of the natural tendencies of human beings. As prices rise, people are buying, but when prices fall, people close their losses and sell.

It is precisely this vicious cycle that leads to the loss of money. Do not buy at a high price and do not sell at a low price, but instead buy at a low price and sell at a high price. If the price of a digital currency is low but you believe in its future, then buy it. If you believe in bitcoin, why buy it for $20,000 instead of $3,000? Once you have bought the currency you believe in, wait for it to reach its potential. Buy at a low price and sell at a high price. This opens the door to another law, which is to buy rumors and sell news.

Buy gossip and sell news!

Digital currency projects often launch their own coins before the final product is made. For this reason, rumors about when their product will be ready will spread among the digital currency community, or rumors about which companies will collaborate with them, or in which exchanges their coins will be listed. Usually these rumors create a lot of publicity and exaggeration. The ads will be so strong in this case, that the price will drop after the news is published.

Take the Verge project, for example, which was once rumored by John McAfee and other prominent people to talk about contributions and innovations to the project. When it came time for real news, prices plummeted to more than 80 percent. So remember to buy in the rumor and sell in the news. This rule will work amazingly.

You think digital currencies are stocks!

Use the time to educate yourself and gain an understanding of what you are investing in. cryptocurrencies are not like stocks; you do not own the company and you will not receive dividends. This means that if a company issues a digital currency and then becomes profitable and collaborates with other companies, it will probably not benefit you. In fact, a company can do well and still drop its coin price.

You do not understand the connection between bitcoins and altcoins!

You may have understood the crypto market, but if you have not yet understood it, read this article. Many people think that bitcoin makes up the entire digital currency market, and in fact, they see that 40 to 50 percent of the bitcoin market liquidity. There are thousands of altcoins working with bitcoin. There are usually three situations in which bitcoins and altcoins interact:

The whole market is declining, in which case Bitcoin is usually the most resilient and flexible. This was directly observed in 2018; for example, while smaller coins fell 80 percent, bitcoins fell 50 percent. Bitcoin prices are rising sharply, but altcoins are falling. This was observed from September to November 2017.

Bitcoin is gradually but steadily increasing in price, and as a result, altcoins are added to their price. This was observed in December 2017.

All of these time frames can be viewed using the coinmarketcap website. Use your time and watch different time frame.

Do not diversify your portfolio!

Your digital currency portfolio should be varied. Although this may be tempting, do not put all the eggs in one basket. Every experienced investor protects himself or herself against risk by investing in various assets. You may have noticed that when a coin goes up, some other coins go up after it, and vice versa, a number of coins go down after it. If you are in this situation and you love the future of both coins, then invest in both. Your investment will be much safer in this case.

Make sure you select the coins you are able to track; this means following the news and its price Quinn. For example, if you have 50 different coins, you may be spending too much variety, and this is not recommended. We recommend that this number be between 5 and 10.

On the other hand, if you only invest in one coin, you have made a big bet; because if the price of this coin decreases, the price of your entire shopping cart will also decrease. We recommend choosing a number of high-risk coins for the short term and a number of prominent currencies for the long term. Finally, diversify at your own risk.

Panic selling

The purpose of publishing the FUD is to intimidate investors and persuade them to sell. Often the FUD occurs after the price starts to fall. This means that investors in this case do not sell in order not to lose profits; rather, they do so for fear of harm. No matter how convincing the FUD resources may seem, one must do so with the right judgment and with confidence in the arguments one made at the beginning of the investment. News about digital currencies can be very deceptive. Overall, you need to control your emotions, which provides an easy transition to the next point, which is discussed below.

You do not control your emotions! against failures in crypto market

In general, always remember to be calm and cool. Finally, you need to invest a certain amount of money so that you do not get hurt if you lose it; so have a good time and enjoy your investment. Do not let negative or important news get you in control. Note the following:

Public media ads in crypto market

Top news sites sometimes publish very negative news and often threatening news. The news may be that some country is going to ban the use of digital currencies, and that the country has said that criminals or it only uses these currencies may be that Wall Street does not want to enter the market. Import digital currencies. Finally, trust your instincts and the industry and pay attention to all the great projects that are continuing to grow with big budgets.

Most of these news articles are about clicking and creating a conversation. Usually such things are much exaggerated. Emotion control is one of the most effective changes you can make to your digital currency investment strategy in the long run.

Emotional dependence on quinces in crypto market

Many investors become dependent on their investment and reach a very dangerous emotional level where the market eventually does its job regardless of their feelings. This is in line with our personal prejudices and inclinations that have been discussed before. We often do not want to admit that we were wrong. You may love investing, but investing does not love you. We have seen many investors in the digital currency space whose choices have dropped by 95%, but they still hold on to it and believe that particular coin will return and make up for it.

These people will continue to keep the Quinn team even after learning that it’s abandoned and the money changers have removed it from the list. This is called catching a falling knife; Never do that. You can easily fall into this trap, which will eventually damage your shopping cart.

Lack of patience in crypto market

Here we want to reiterate the importance of the FOMO and FUD. You will be amazed at the importance of patience in this area. We know people who have changed their shopping cart and 40% of their shopping cart is made up of one coin. This is a hasty and emotional move by FOMO or FUD. This will ultimately lead to a terrible investment. Just be patient since so are skilled and wealthy investors. For example, you may feel frustrated with finding the next prominent investment; but whales have enough capital to patiently wait for a prominent position and hit the right target.

FAQs

Do I need a consultant in trading cryptocurrencies?

Not necessarily, you can get knowledge by doing this from various sources, but if you are just starting out, you can get guidance from friends you trust.

What is the minimum investment required for crypto investment?

At least it does not exist and you can invest in it depending on your risk. Of course, it is recommended that you do this with money that you do not need on a daily basis and use up to 20% of the funds you have earmarked for your investments.

The bottom line

In this article from CoinMarketSIG , we have tried to explain to you in full all the common mistakes in investing in cryptocurrencies ( crypto market ). Many of the above were obvious principles, but be aware of their necessity. Now you are very close to becoming a professional and you need to keep studying and learning to progress further. This world, like all new technologies, is in a state of progress and innovation every day, so try to be aware of new dangers and mistakes while studying more.