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"Why do small investors lose in cryptocurrencies? 6 common mistakes and how to avoid them
Small investors in digital currencies fall into the trap and lose money due to several common factors, which can be summarized as follows:
1Lack of knowledge and experience
• Many small investors enter the cryptocurrency market without a deep understanding of the market or the technologies behind the currencies.
• Ignorance of the basics of technical and fundamental analysis leads to improperly substantiated investment decisions.
2. Under the influence of misleading advertising and promises • Promises of fantastic profits from fraudulent projects or suspicious currencies make investors enter without studying.
• Advertisements on social networks from celebrities or non-specialist "influencers" attract new investors.
3. Fear of missing out (FOMO)
• When prices rise significantly, small investors are afraid of losing profits, so they buy at the peak of prices.
• In the event of a fall, they sell at a loss due to fear and panic (Panic Selling)
4. Lack of risk management
• Excessive use of leverage leads to large losses in case of insignificant market movement.#Binance