How to Avoid Pitfalls as a Newbie in the Crypto World?
Advice for Newcomers in Crypto
1. Don’t touch contracts!!!
The crypto world has many seasoned traders, and many experts have lost everything in contracts. Newbies should stick to spot trading and hold onto their assets.
2. Don’t play with small coins
Most small coins in the crypto world are designed to exploit investors. They can drop to zero, and those that fall over 99% in value, which you haven't heard of, should be avoided. Stick to mainstream coins.
3. Don’t use small exchanges
Small exchanges always come with the risk of disappearing or going offline, which could lock all your funds. It is advisable to use mainstream exchanges and consider spreading your funds across these exchanges.
4. Don’t have overly high expectations
The era of making tenfold or hundredfold gains is over. Now that many institutions and elites have entered the market, the big profits are gone. Achieving a doubling of your investment is already impressive. If you can avoid losses, you’ve already outperformed over 90% of people.
5. Don’t store money in unknown wallets
For large amounts, it is advisable to store your funds in a wallet, as exchanges also have risks. For small wallets, there can also be risks of disappearing.
6. Don’t engage in ultra-short-term trading
The fluctuations in the crypto market can be significant; it is common for Bitcoin to drop by 20% in a day, and altcoins can halve in value. It is difficult to control short-term trades, so hold onto the coins you have.
7. Set stop-loss and take-profit levels
Set targets for yourself. If the price drops to a certain level, execute your exit strategy. If it rises to a certain point, sell decisively, regardless of how much more it may rise afterward. Many people lose money in a bull market because they fail to take profits in time.
8. Don’t bring all your funds into the crypto world
The risks in the crypto world are too high, and both deposits and withdrawals carry risks. It is advisable to use your spare cash for initial practice in the crypto space.
9. Continuously learn and gain knowledge
You can’t earn money beyond your understanding. Even if you make a lot of money at first, if your understanding doesn’t keep pace, you will quickly lose it back. Constant learning to improve your understanding is crucial.
10. Find an experienced and reliable mentor
There are many pitfalls in the crypto world, and over 99% of people lose money. Find a reliable mentor with experience from whom you can learn. While it may not guarantee profits, it can help you avoid many pitfalls. However, do not seek mentors who promote contract trading.