If you are a new investor who hasn’t even purchased any Bitcoin yet then this is your lucky day! If you are still a relatively new investor in this cryptocurrency market and you have already sustained some losses or minor gains, then you are just in the right place as well! In this blog I will be discussing the 5 most common mistakes that inexperienced investors make (to include myself). By avoiding this common mistakes you are guaranteed to make the most out your investments in this new market.
Do Not invest More Than What You Can Afford to Lose
Most new investors make the mistake to think that they will be become rich overnight by investing everything into the market as soon as they enter it. You should set aside an X amount of money for your initial investment. This X amount should not put any stress on your budget. A good way to do this is to invest whatever extra money you have in the month. If you decided to simply invest $100 every month, by the end of the year you would have put $1200 in the market and depending how your coins did that year, you could have a substantial profit.
Avoid the F.O.M.O. (Fear Of Missing Out)
The F.O.M.O is born from new investors trying to chase the next big thing when it is already too late. You will see this in chatter groups when others are promoting a certain unknown coin which is apparently growing exponentially (also known as a PnD or Pump and Dump). You see the growth and then you realize that you also want in on this amazing opportunity to double or triple your investment. Take it from me, do not chase that coin. There will always be better and safer opportunities in the crypto currency market. Chances are that by the time you jump in the bandwagon, the coin will start to plummet. So do yourself a favor and read number 3 below.
Do Your Research Before You Invest In a Coin!
I guess it should go without saying but if you are going to spend your hard earned money into something, you want to know what it is you are buying. You don’t go to Mike’s Subs and order the mystery meat sandwich because you are feeling lucky that day! In this day and age where information is available at the blink of an eye, read about the technology behind your coin. Go to the coin’s website and read what problem is your potential coin trying to solve. How will this benefit others? Is it clear to understand what they are trying to sell? Go on youtube and type a review for your coin. Get different opinions. In the end, you need to make your own opinion and decide whether it is a good investment or not.
Invest For the Long Term
Are you trying to make a quick buck or are you trying to set yourself up nicely for retirement? I ask this because if you want the first one in this volatile market, you might end up burned. Smarts investors in the crypto world do extensive research before investing on a coin for the long term. Let me give you an example: If you were a visionary on Bitcoin (BTC) back in 2010 and you decided to buy $100 worth of BTC when it was less than a cent; if you held to that those coins and did not sell them until 2017 when they were worth almost $3000 at its peak in June, then you would have been a very happy and patient millionaire! The cryptocurrency is still in its infancy stage. Invest on coins with good technologies that will increase astronomically in value 2, 3, 5 years from now. The long term will definitely pay dividends to the patient.
Do Not Panic Sell
This is by far what causes most new crypto investors to lose money. Let’s say that you conducted extensive research in a coin. You visited the website, read their white paper, discussed it with others who are knowledgeable, watched the reviews on Youtube and you are 100% certain this coin has a bright future. You happily buy X amount of this coin at bargain during a dip and it seems to be doing very well over the next couple of hours, days, and weeks. Then you wake up one morning to see the coin has gone below the price you bought and now you are in the red. Whatever you do, DO NOT PANIC SELL!. The only time you will make a loss it’s if you sell it at that time. The crypto market is always fluctuating up and down. This will be normal. If you are in for the long term you will look back at that specific time in the near future and you will be glad you did not sell as the coin gained 10X or 20X your initial investment.
I hope these 5 tips help you trade better for the long term gains. I have shared the mistakes I have made in the past and I hope you are able to learn from them to maximize your investments. Please let me know your thoughts on my story; did you make any of these mistakes? Good luck on your trading!