Over three days, I gained 15% of my capital, but in just one day, I lost 10.5%. Here are the key reasons behind my loss and the lessons others can learn from them.
1. Trading Against the Market Trend
I placed trades against the market trend, hoping for short-term gains, which backfired.
Lesson: Always follow the market trend. Use tools like RSI or MACD to analyze and confirm the direction before trading.
2. Not Setting a Stop Loss
Even after the market broke a key support line, I didn’t set a stop loss, which significantly increased my losses.
Lesson:
Always set a stop loss for every trade.
Pay attention to support and resistance levels. If support is broken, your stop loss should trigger to minimize losses.
3. Ignoring News Updates
Despite conducting fundamental and technical analysis, I neglected to check important market news before placing trades.
Lesson: Always review the latest news and market updates before trading, as they can have a significant impact on cryptocurrency prices.
The Importance of Support and Resistance
Support: The level where prices tend to stop falling and may bounce back.
Resistance: The level where prices tend to stop rising and may reverse.
When the support level is broken, the trend often reverses, making stop-loss placement crucial.
Final Note:
Stick to your strategy, avoid emotional trading, and manage risks effectively. Learning from mistakes is essential for long-term success in the volatile cryptocurrency market.
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