🚀🚀💰💰 Surely everyone of us participating in this crypto market hopes to make a lot of money. Although this market offers higher returns than other financial markets like Forex and Stocks, it also comes with a higher level of risk.
In any market, lacking knowledge and a proper mindset will keep you in a perpetual cycle of losses. Knowledge and experience come from mistakes, and from that, we can learn lessons to survive in the market. Below are common misconceptions that often arise and are frequently encountered when participating in the market.
1. Wanting to make money very quickly.
Indeed, the crypto market can provide quick profits due to its volatility; doubling or tripling, or even decupling in a day can happen. But rapid rises can lead to rapid falls, and after each uptrend, there are profit-taking waves from market makers, and market crashes, splitting by 5 or 10 is common.
It is possible to make money quickly and a lot, but keeping that money is extremely difficult. Once we make money, we want even more and faster. Human greed is bottomless, and nowhere is greed more evident than in the financial market, especially in the cryptocurrency market, when hearing stories like: x10 times buying this crypto, x100 when buying that crypto.
Impatience to make money quickly will pull us along with the market, leading to regrettable mistakes such as hastily buying a crypto asset at a high price and not being able to exit when that crypto drops significantly. Entering a position means hoping it will increase immediately, checking the app every few minutes to see if it has taken off.
👉 Remember, the only way to make money in this market is to be patient.
2. FOMO with the crowd.
The nature of the financial market is that it is a market of the crowd, but there is a truth in financial markets: the crowd never wins. However, new investors are often overwhelmed by the crowd mentality. When they see a coin rising sharply, they start saying it is good to buy as it will continue to rise; after seeing everyone buying and selling excitedly, they find it hard to remain still, leading to indecision and ultimately wrong decisions.
Be self-reliant in your investment decisions based on careful analysis and advice from successful people, rather than rushing into buying and selling.
👉 Sometimes, stepping back from the crowd to consider something can help us gain a more objective perspective.
3. Underestimating the market, thinking that the game is easy.
When participating in the market, many people after a few future trades x5-x10 their accounts in a few days become delusional. Because gambling favors the new, winning a lot leads them to underestimate the market, thinking they are talented, only to later suffer bitter consequences.
Crypto is a Zero-Sum game; theoretically, the total assets of the winners will equal the total losses of the other players. This means the money lost by some will be transferred to the pockets of the winners. Nothing is easy in any form of finance. Investing to make money carries many risks; having your own opinions is good, but reality may not align with imagination. There are many lessons when we are complacent.
👉 In an uptrend market, it is an easy opportunity to make money, but market fluctuations cannot be predicted in advance, and the risks are very high. Remember, if making money were that easy, everyone would be rich.
4. Thinking that more analysis is better.
Before entering a position, analyze a project thoroughly before deciding; however, many people try to analyze positively as much as possible to feel certain and at ease. Sometimes, when something is too clear, it may no longer be a good opportunity.
What we see is what the bookmaker wants the market to see. The bookmaker will create a smokescreen with news during our information search.
👉 Therefore, it is always necessary to prepare solutions for worst-case scenarios.
5. Only considering crypto as a side job to earn extra.
This is an extremely harmful mindset that nearly everyone new to the market falls into because most people have a primary job outside, and when they hear news reports about crypto, they hope to invest a little money to earn more. Ryan once said that the financial market is the 'highest' form of intelligence; to succeed in this market, one must be skilled in many areas. With the mentality of treating crypto as a side job, most participants hope to earn a lot of money but eventually just wish to break even after some time.
👉 Therefore, you must be truly serious about it. It cannot be treated as a side job; it should be treated as a main profession to earn money.
6. Lacking self-confidence.
For new investors stepping into the financial market in general and the crypto market in particular, they may feel very lost, with limited knowledge, no experience, and no exposure, leading to a lack of confidence when investment opportunities arise. Frequent losses have worn down their confidence. Continuous losses will gradually make them anxious, impacting their mentality and spirit. The fear of failure will make them unwilling to invest anymore, or excessive worry will overwhelm their mindset, leading to a lack of clarity, decisiveness, and wrong decisions during trading, which will then result in disastrous failures.
Do not let any negative factors affect your investment process. We have all experienced moments when we felt our analysis was solid, but after seeing KOLs analyze the opposite, we became fearful and immediately trusted and followed them, disregarding our previous analysis. The result is that we were right, and the KOLs were wrong.
👉 If you want to succeed in trading, you must have faith and certainty in what you do. Before buying a cryptocurrency, you have taken a long time to research, analyze, and choose it, so place your full trust in your decision.