Sometimes, the enthusiasm for investing in cryptocurrencies can lead us to make costly mistakes. I want to tell you my story of how I lost 1000 USD on Binance so that you can learn from my mistakes and avoid going through the same thing.
It all started when I heard about a cryptocurrency that would be the boom of the moment, something incredible. I didn't want to be left out and, like many, I was afraid of missing out on the opportunity to make large sums of money quickly. This was my first mistake: investing on impulse, without research.
Mistake 1: Investing on Impulse and Without Information
I saw that cryptocurrency was trending and that many were saying it was âthe next big thing.â However, I didnât spend time researching the project behind it, its real utility, or the risks. I just got carried away by the excitement of the moment and bought $1000 of the coin. Always research the project before investing, understand what itâs for and whoâs behind it.
Mistake 2: Not Having a Strategy
Seeing that the currency remained stable, I thought that my investment would multiply in a short time. But, suddenly, its value began to plummet. I had no clear strategy: I didn't know when to sell, or what to do if things went wrong. I was paralyzed as I watched my investment disappear. Always establish a plan before investing: define how much you want to earn and how much you are willing to lose.
Mistake 3: Not Using Stop-Loss
If I had placed a stop-loss order, I would have at least been able to recover part of my investment. This mechanism allows you to automatically sell your assets if the price falls below a level you determine. By not using it, I was left without any protection. Always use tools such as stop-loss to limit your losses.
Mistake 4: Not Diversifying
I invested all my $1000 in a single cryptocurrency, a huge mistake. If I had diversified, the losses in that asset would have been less devastating, as other investments could have offset the declines. Never put all your money in one asset. Diversify to reduce risk.
Final Lessons
Losing that $1,000 was a painful experience, but it also taught me valuable lessons about how to invest more wisely:
1. Always do your own research before investing.
2. Define an investment strategy with clear goals.
3. Protect your investments with stop-loss orders.
4. Diversify to reduce risks.
EXTRA TIP: Never buy a cryptocurrency immediately after it is launched on the market, wait a few days for its value to settle and you will not get any negative surprises. An example of this is Hamster's drop from 0.1 to 0.007 in a very short time.
I want to clarify that I am not giving the Dogs cryptocurrency a bad image. I simply want to express how this situation allowed me to see cryptocurrencies differently.
