Guide to Avoid Pitfalls for Newcomers in the Crypto World

1. Carefully Choose Cryptocurrencies

Many small cryptocurrencies in the crypto world are traps and often crash to zero. Newcomers should steer clear of low market cap and unknown coins, opting for mainstream cryptocurrencies like Bitcoin and Ethereum, which have high stability, liquidity, and recognition, as well as mature technical ecosystems.

2. Set Realistic Expectations

Don’t fantasize about tenfold or hundredfold returns; with institutional players entering the market, the rewards are diminishing. Doubling your investment is already quite good for newcomers, and if you aim to avoid losses, you’ll outperform over 90% of investors.

3. Wallet Security

It's advisable to store large amounts in a wallet, but choose a well-known and reliable one, as small wallets carry the risk of exit scams.

4. Trading Strategy

Avoid playing ultra-short-term trades, as price fluctuations in the crypto world are hard to control; a 20% daily drop in Bitcoin is common, and altcoins are even more prone to significant losses. Hold onto your coins. Additionally, set stop-loss and take-profit levels, establish target prices, stop losses when prices drop, and take profits when prices rise; many people lose money in bull markets because they don’t know when to take profits.

5. Fund Management

Never enter the market with all your funds; the crypto world is high-risk, and there are risks involved in moving money in and out. It’s recommended to use spare cash for practice.

6. Continuous Learning

It’s hard to earn money beyond your current understanding; even if you make profits when first entering the crypto world, insufficient knowledge can lead to losses. Keep learning and improving your understanding.