The 15 most common crypto mistakes
It’s vital that inexperienced enthusiasts have a clear trading strategy and conduct necessary research.
The cryptocurrency craze has caught fire in the last few months. Thousands of people sign up daily to buy, hold and trade virtual currencies. Blockchain networks and exchanges that run them are bursting at the digital seams. However, many traders are inexperienced and uninformed, which can lead to errors in judgement.
In order to assist crypto enthusiasts to learn about the burgeoning industry and make better decisions, Crypto Virtual Summit co-founder Amateo Ra recently created and released the Ultimate Crypto Kickstart Guide.
There are over 1000 cryptocurrencies and everyone wants to know which coins have the greatest potential for monetary gain. The guide explains that it’s important to properly research any coins you plan to buy.
The guide says potential traders should conduct a fundamental business analysis and read any prospective company’s white paper. There’s also benefits to monitoring a particular coin’s social media accounts, eyeing the level of community engagement and evaluating the business’ roadmap and future development strategy.
Following research, there are three different trading strategies you can implement, according to the guide.
- HODL: Simple, find a good entry, buy and hold on for dear life. Hold on to your cryptocurrencies, resist the urge to sell and go for the ride to big gains.
- Mid-Term: Investing in alt-coins and bitcoin in shorter time windows from weeks to months. Many mid-term investors will invest and then cash out their principal investment and ride these coins all the way up for free. Midterm means that if bitcoin skyrockets you may still liquidate your altcoin positions and ride the gains where you can get them.
- Trader: Traders usually have one intention – use other coins and margin trading to increase their bitcoin position. Traders will set sell targets of 20% to 30% for every coin that they sell and stop losses to protect their investments so their positions automatically liquidate depending on the market trending toward the upside or downside. Trading is far more risky and usually traders will only trade 10% to 30% of their market positions.
“Cryptocurrency is fundamentally more liquid than other investment opportunities – so it’s easier for people to cash in and cash out very quickly. This liquidity is what makes cryptocurrency so unique, that you can buy and sell with such ease – and thus partly what creates the volatility in the market,” Ra said in the guide.
“It’s normal to see coins gain 20% to 50% in a day, and lose that much. Just remember to hold your coins strong – as long term gains out-perform short term rises and falls.
“The blockchain technology underlying crypto is absolutely revolutionary – and will continue to disrupt the way we use money, move resources, and track expenses.”
As part of the guide, Ra provides readers a list of the most prevalent missteps crypto market traders can make.
The 15 most common crypto mistakes
- Chasing pump and dump schemes
- Not diversifying your investment to protect your portfolio
- Not protecting your accounts with 2-factor authentication
- Falling for phishing scams and email account scams
- Falling for AirDrop scams
- Investing in sh*t-coins without proper research
- Trading in crypto without stop-losses and sell-orders
- Blindly participating in crypto multi-level marketing systems without research
- Panic selling on dips and rises of bitcoin
- Giving other people your private keys
- Not verifying your Bittrex, Binance or other accounts
- Having an unclear investment strategy – trading, holding, etc.
- Not doing thorough research for your coin investments
- Losing your private keys
- Getting information from rumors and speculation and not coins and their teams themselves
Several colleges throughout the U.S. now offer dedicated classes examining the cryptocurrency industry and the still-developing blockchain technology that supports it. Graduate-level classes are being held at Carnegie Mellon, Cornell, Duke, the Massachusetts Institute of Technology, the University of Maryland and more.
The Crypto Virtual Summit, featuring interviews with crypto experts, takes place live online March 1-4, 2018.
You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of the alternative coins on the market.