5 Fatal Mistakes That Cryptocurrency Traders Often Make

1. Do Not Use Pressure Capital When Investing

So-called pressure capital includes loans, borrowing money to trade cryptocurrencies, mortgaging houses, etc. Clearly, this is not a wise practice. Once pressure capital is used, the mindset will inevitably become anxious, and the desire for profit will become even stronger. In the face of slight fluctuations, the mentality will always be restless, and one cannot view the future market trends with a calm mind. Putting one's life savings at stake with pressure capital is clearly a major taboo for investors.

2. Full Position Trading

Warren Buffett has a famous saying: do not put all your eggs in one basket. The biggest benefit of being fully invested is that you can achieve adequate profits when seizing market opportunities. The downside is that once the market goes against you, the road to recovering your losses can be long and arduous. As the saying goes, if you invest 10,000 yuan and it increases by 100%, you will have 20,000 yuan, but if that 20,000 yuan decreases by 50%, you are back to where you started. Those who frequently trade contracts know how much psychological burden it takes to gain 100% as a contract trader, always risking liquidation.

3. Overtrading

The greatest tragedy for those new to the cryptocurrency space is entering the market during a bull run. In a bull market, everything seems to be rising, and during this time, they lose their sense of risk and engage in frequent trading. They might make a few points on one cryptocurrency and then switch to another that hasn’t risen, effectively jumping from one trade to another. The eventual outcome is often that they switch to a cryptocurrency that keeps dropping, and without any awareness of stop-loss strategies, they end up losing more and more, eventually being eliminated from the market.

For seasoned veterans, overtrading is also not a good strategy. They may call it short-term trading, but this excessive trading prevents them from seeing the market direction clearly, ultimately leading to their exit from the market.

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