Losing money with cryptocurrency seems too common, when you deal with such volatile assets. But is losing unavoidable?
Making and losing money with cryptocurrency
Nowadays, it seems like everybody is talking about cryptocurrency and making money out of it. Overnight success is not an impossible story in the crypto market. Where there are numerous ways of making money, there are just as many ways to lose money. And more often than not people come out of the market with all their money, from life savings to house deposits gone, and all it takes is a crash in the prices of crypto. But onlookers won’t hear about those sad stories, and crypto markets continue to boom.
Here are several main reasons for losing money, learn from mistakes, and you may come out stronger and wiser.
Lack of understanding of the market
Surely not every one of us are “experts” or have some inside information. But we often make the mistake of relying too much on “experts” without learning the market ourselves. Is the market with high liquidity? Does your crypto have enough potential? To know when is a good time to trade, you need to know what moves the market. So, do your own research.
Lack of trading skills
Are you a good trader? Have you developed your own trading strategy? There are many people who have been trading for a year and still don’t know how to read a candle chart or use indicators. It’s very important for traders to have their own trading styles so that they won’t follow the crowd and go emotional trading. Many exchanges provide tutorials and some even offer a personal account manager full of trading tips to users!
Trading too much, too large positions sizes
Emotional trading is very common. Novice traders often push their limits to chase the highs in hope of getting greater profits. When the price declines, they are often the fastest to flee the market and lose any hope of earning back their money. Some exchanges and whales are known to take advantage of such a behavior to pump or dump the market. Not to mention with every trade you make, you need to pay a fee to exchanges. Be patient and stay in control. Additionally, always remember to divide your money into different shares as your back-up plans. Don’t throw in all your money at once.
Forget to set stop-loss and take-profit
Trading without a stop-loss or take-profit is like driving a car without breaks. It is true that we don’t like to admit defeat and are too greedy to sell a winning position. But we can’t always be right and win, especially in these volatile markets. Trading is a long-term business and with a proper stop-loss and a take-profit levels, we can always start another trade.
Novice traders are easily scared and discouraged whenever the price drops. Cryptocurrencies are volatile, this is why people can make a great deal of money from trading them. When you invest in crypto, you need to have the patience and gut to deal with price fluctuations.
Is your exchange the right one for you?
There are as many exchanges as cryptocurrencies, and a good deal of them are scam or shited ones. A bad exchange will charge unreasonable fees and just doesn’t tell you what fees you have to pay. Some exchanges are believed to manipulate the market or pull the plug deliberately. Worse still, every year, lots of exchanges close down and disappear – with them the deposits of users. Also, some exchanges’ trading engines and rules are just so difficult, it takes traders much time to just learn to use them.
If you are looking for a good exchange, find one with a demo account. With a demo account, you can practice trading strategies, learn to control your emotion and learn to analyze the markets. Successful traders are those who learn to analyze the market, keep themselves abreast of market news, and keep trying out different strategies. A good demo account serves as a sandbox for you to improve your skills and get familiar with the fast-changing market.
Recommended exchange: Bexplus
Bexplus offers 100x leverage in BTC, ETH, DOGE, ADA, and XRP futures contracts. And provide 10 BTC demo accounts.Bexplus is trusted by over 800K traders around the world, including the USA, Japan, Korea, and Iran. No KYC, no deposit fee, traders can receive the most attentive services, including 24/7 customer support and personal account manager.
Double deposits, 100% Bonus to Help You Maximize Profit
Double deposits, double profits. Users can get a 100% deposit bonus for every deposit on Bexplus. If you deposit 1 BTC, 2 BTC will be credited to your account, and the profits gained with the bonus are withdrawable.
Other advantages of Bexplus
- No KYC requirement, registration with Email verification.
- Demo account with 10 BTC for traders to get familiar with leverage trading.
- 100% bonus for every deposit.
- Intuitive and full-featured App on Apple App Store and Google Play.
- Interest wallet with up to 21% annualized interest.
- 24/7 customer support and analysts service.
*This article has been paid. The Cryptonomist didn’t write the article nor has tested the platform.