Fail-Proof Cryptocurrency Trading Success Tips To Avoid Losing Money
Why Most Crypto Traders Fail? Learn How To Avoid The Most Common Trading Mistakes
A lot of traders lose money. The ones that stay in the game are precisely the ones that are prepared enough not to lose their money in the market but how to actually do it? Some people state that up to 90% of the traders lose money in the long run and that this number is even higher with crypto traders. Why? We’ll explain it in this article.
Differences From The Crypto Market
Before we start, it is important to understand how the crypto market can be different than the traditional financial one. This market is considerably more volatile and new, so the chances that you make mistakes or that people will give you wrong advice are very high.
To avoid the high failure rates, you have to learn some techniques and invest only in a way that you can be as sure as possible that you will win.
Trading Based On Emotion
It is very common that beginners trade over emotion instead of hard data. Sometimes you close the deal at the worst possible moment and loses money. Emotions, like the market, are a roller coaster sometimes, but the difference is that they will not give you any money.
There are lots of studies about emotion in trading. Fear of missing out, greed, etc. are very common causes for people to make mistakes while trading. No matter how experienced you are, you will eventually be led by emotions and this might make you lose money, so you have to prepare yourself to do it as little as possible and to control yourself better or you will lose more than win.
Be sure to always trade based on sound research and test your trading methods instead of just following your “gut feelings”. You will become a better trader with time and produce better results by being disciplined and less emotional, as well as always well informed.
Believing That It Is Easy To Profit
To become better in any profession and to make a six figure salary, you need to study and to dedicate yourself a lot. Trading only requires a computer and a few hundred bucks, but if you believe that is all you need, you will surely lose those bucks soon. As in all cases of life, if you want to be successful, you have to apply yourself.
It takes a lot of work and dedication to know the market well enough to actually be successful and become the successful trader you want to be.
Not Having A Trading Plan
You need a trading plan. You can basically consider it to be a blueprint for success. Your plan has to take everything that you can into account like entry and exit of money, risk management, time frame and even position sizing. Without a plan and too much emotion, you will be gambling instead of trading and you will never know how to improve your skills to become better.
Following the plan in a solid way is very useful because you will either get or lose money. If you are winning, your plan is good, if you are losing, then it is not. This way, you will learn from your failures instead of keep losing all the time and never knowing why.
You have to avoid what is commonly known as analysis paralysis or overthinking. There is no need to watch the markets 24/7 and become too afraid to trade. If you overthink too much, you will attach too many indicators on every trade and you can easily get confused or think that you need a magical formula to win. That is not how it is.
Do not be overwhelmed by the information. Embrace it. Too much information can cripple you and you will lose your chance to make money, so know when to stop. Use clear and simple strategies instead of very complex ones. Set your parameters and wait. Either you will win or lose and that will give your result. Continue or work based on that.
As in any carer, crypto trading takes time and effort. You should be reasonable, analytic and spend your time learning but not overthinking your every move. Sometimes, you will lose money, so set aside some quantity of it to be prepared for when the bad times come. Get some education, dedicate yourself and avoid too many risks. Good luck.