Viw Magazine

Money



These days, it probably seems like everyone you know has started trading with Bitcoin. You might be feeling like you're missing out on all the fun and gains, but aren't sure where to start.

Learning how to trade Bitcoin is important if you're going to get involved in trading cryptocurrencies. It may seem like anyone can do it, but investing isn't all about luck. It does take a significant element of skill.

When you get started trading with Bitcoin, it is easy to make beginner mistakes. Fortunately, we've compiled an exhaustive list of the bitcoin and crypto investment pitfalls to avoid.

Jumping In Without Doing Your Research

The first thing you need to do when you become interested in Bitcoin is to do some research. Investing without knowledge of what you're investing in may not be the worst mistake you can make, but it sure isn't a good start.

Of course, there is a lot of hype around Bitcoin trading profits. You may feel pressure to get in as soon as possible. But taking the time to learn about crypto markets before you get involved will always get you better results.

Simply doing a bit of research will actually ensure you get in at the right time, instead of the time you feel the most pressure. Investing when you don't understand what you're investing in can lead to disaster.

As of recently, there are over 1300 different cryptocurrencies to invest in. Before you decide what to invest in, you need to have some basic knowledge about the coins that interest you and their future potential.

If the only reason you're investing in a certain coin is that it has gone up a lot in a single day or because a friend told you to, it's not a very sound reason.

Investing More Than You Can Afford To Lose

You might be surprised by the number of people who jump into trading with Bitcoin and invest more money than they can afford to. You would think people would know their limits and stop before they invest too much.

What you need to understand is that investing in cryptocurrency is a very exciting thing for a lot of people. Crypto has opened up the possibility of high-reward investing to the average person.

Therefore, when people see other average people making thousands and millions by trading with cryptocurrencies, they want a piece of that action. The excitement around crypto also makes it seem like a surer bet than it is.

When you start investing, it's common to want to take high risks. It's easy to think this is the only way to make a decent profit.

Remember that trading with Bitcoin or any other cryptocurrency involves risk, just like any other type of investment. And whenever you invest in something, you need to take that risk into consideration.

There is no guarantee of a return on investment. That's why it is so important to invest within your means. Do not invest to the point that you will lose your home, your savings, or your ability to provide for yourself.

If you know that you would suffer significant consequences investing the amount you want to invest, stop yourself. Invest responsibly and reasonably. In the end, you will feel much better about your decision.

Some investors take out loans to fund their crypto investments. This is a personal choice and can work for people with significant savings and income. If you lose that money and can't pay back your loan, you're in deep trouble.

Only you know what amount is the right amount for you to invest. Do yourself a favor and don't invest more than you can afford to lose.

Investing Without a Plan

Another mistake many people make is investing without a Bitcoin trading strategy. This is another part of doing your research before investing your money in Bitcoin or other cryptocurrencies.

A lot of beginners make the mistake of investing without a strategy. It is important that you make a plan

Your investment strategy should include how much you plan to invest and whether you will invest it as a lump sum or in increments. You should also decide how much risk you're willing to take.

Finally, make sure you know what your profit targets and stop-loss limits are. It's important to have a profit goal in mind and to sell when you reach that goal. Waiting around to "see what happens" could result in major losses.

Your stop-loss limit is the price point at which you decide to cut your losses.

Using an Insecure Platform

Just because a trading platform exists, or experiences high user rates, does not mean it is inherently secure. Cyber security is always important, but it is especially vital when it comes to trading money.

It is important that you make sure you are trading via a secure crypto trading platform. If your platform is not secure, you could risk losing money or being the victim of a data hack.

It may not surprise you, but cryptocurrency markets are filled with scammers and cybercriminals. Crypto assets are valuable and tempting for anyone who knows how to hack.

Taking basic cybersecurity measures can ensure the protection of your crypto holdings and your data. Avoid clicking on links or attachments from unknown senders. Do your research and find out what phishing scams are trending.

Always store your crypto holdings in a secure location like a Bitcoin ATM, like https://www.bytefederal.com/. You should also use two-factor authentication on all of your trading accounts.

Also, just try to avoid being overly vocal about your crypto investments and holdings. Who really needs to know besides you?

Making Emotional Decisions

Just as it is not a good idea to base major life choices on emotions, neither is it a good investment strategy.

When we make decisions based on our emotions, we make mistakes. We marry the wrong person, buy the wrong house, take the wrong job.

It is important to make investment decisions based on knowledge, skill, and taking the long view of the market. Otherwise, you end up selling when you should hold and investing more than you can afford.

Try your best to keep a calm, cool head when trading, no matter what the circumstances. The important thing to remember is that whatever is happening in the market, it can always change.

Following Bad Advice

When you start to do your crypto research, you will find that the internet is flooded with crypto investment experts. Many people follow the advice of these experts. But following the wrong advice will cost you.

It is important to know who is an actual expert and who just professes to be one. In order to know who really knows their stuff, you first need to have a decent understanding of crypto markets yourself.

You have to watch a lot of videos and read a lot of comments before you can really know how well a certain expert is able to predict what will happen in a given market and whether or not to take their advice.

Don't follow any old advice you see in forums, on YouTube, or on social media. Take the time to find out if the advice is good or if this is just another pump and dump scheme.

Buying High, Selling Low

This sounds like an incredibly simple concept and yet lots of new and experienced crypto traders make this mistake. It usually happens when people make emotional decisions.

When the market dips, we panic and sell our shares. Losing money is terrifying. This is why it is important to focus on the long-term.

When you consider the market in the long-term, you realize that when the market dips it's actually the best time to buy more. The worst time to buy is when the market is doing well because that's when prices are up.

Try your best to ignore the headlines and invest when the market is low and sell when it's high. This requires a lot of faith and self-control, but you won't regret it!

Failing To Diversify

Portfolio diversification is always a smart investment strategy. When you only invest in one thing, you are literally putting all of your eggs in one basket. And we all know what happens when we put our eggs in one basket!

Diversifying your portfolio allows you to reduce the amount of risk you're taking without giving up the return on investment you're aiming for. 

Being Uninformed About Crypto Markets

If you're seriously interested in investing in crypto, you are going to need to devote some of your time every week (or day) to keep up with the crypto markets.

This is the only way to know whether your portfolio is up or down and what else is going on in the markets that could affect your investment.

Focusing on Finding "The Next Bitcoin"

It is not worth your time or energy to try to figure out which type of cryptocurrency is going to blow up next. You're just going to end up wasting your time and money investing in coins that produce very little profit.

The better choice is to build a diverse portfolio of cryptocurrencies that have legitimate promise, potential, and application.

Forgetting About Crypto Taxation

Don't forget that crypto gets taxed! It's important to understand how your crypto income gets taxed where you live. You will need to file your capital gains taxes accordingly.

Trading with Bitcoin Successfully

The most important things to remember when you get started trading with Bitcoin is to do your market research first, develop an investment strategy, and only invest as much as you can afford to lose.

For more tips on crypto and investment, check out what else is we have in store in our Money and Business sections.

LifeStyle

Online Activities to treat that stuck-indoors Aussie lockdown boredom

While we wait for Australian quarantines & lockdowns to reemerge in our lives somewhat like ...

Moving to a New City Alone? 5 Tips on Creating a New Hometown

Did you pack up and move away from home? Did you brave the big, ugly world on your own? There's...

Helpful Tips For Your Big Move To The Gold Coast, Queensland

The Gold Coast has a lot to offer to people who choose to live there. The weather is beautiful, ...

Where Does Resilience Come From?

Kids can really feel the stress of life because they have so little control over what happens to...

Writers Wanted



NewsServices.com

Content & Technology Connecting Global Audiences

More Information - Less Opinion