How to Avoid Traps in the Crypto Trading?
1. Buying High
FOMO (Fear of Missing Out) can lead to buying at peak prices. Avoid chasing rallies without proper analysis.
Set entry points based on technical indicators or support levels.
2. Margin Trading Risks
Leverage: High leverage amplifies gains and losses. Be cautious; excessive leverage can wipe out your account.
Liquidation: Margin positions can get liquidated if prices move against you. Set stop-loss orders to limit losses.
Interest Costs: Borrowing funds for margin trading incurs interest. Factor this into your strategy.
3. Futures Trading Traps
Rolling Contracts: Understand how futures contracts roll over. Sudden price changes during rollover can catch traders off guard.
Contango and Backwardation: These affect futures prices. Research market structure before trading futures.
Market Manipulation: Futures markets can be manipulated.
Stay informed and be wary of sudden spikes or crashes.
Remember, risk management, discipline, and continuous learning are essential to avoid these traps. 🚀📉📈 .
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