The cryptocurrency market is relatively new, so everyone wants to be the first to get rich there. However, the last significant drop in cryptocurrency in December 2017 led to significant losses for many traders and platforms, but the most important thing here is that some people have even lost faith in this market.
At the moment, the cryptocurrency market is more than stable. But despite this, traders should remember that it can sometimes be useful to get such a shock from losses as early as possible and begin to move on.
We have selected some tips for you based on cryptocurrency market observations over the past few months. They can help you better understand this industry.
In people’s lives, there is such a thing as a “syndrome of missed opportunities.” This is when a person always thinks that the best, most profitable and interesting happens somewhere else. For example, when you observe a huge green candle on the chart, but you do not have this token. You start selling tokens that you have in order to have time to jump on this outgoing train.
Trading with such emotions can be very dangerous for you and your funds. Because in the end, you invest an asset that has already grown significantly or even reached its maximum, and its growth will no longer be manifested.
So traders should not give over to emotions. The time will come and your digital coin will grow. As a rule, in a bull market, every normal asset has its best hour.
Twitter is a very convenient place to study public moods and read the news, but sometimes it turns into a “minefield”.
Self-proclaimed crypto experts every day share their ideas and investment advice, while many do not even fully understand their commitment. Unfortunately, most of these information spreaders are for their own benefit. Sometimes they advertise certain assets and can be sponsored by companies.
Most of them even purposefully spread panic or hype. A good example of this is the situation of security expert John McAfee and the Binance exchange. McAfee tweeted that Binance was hacked without any evidence and panic broke out in the market right away. Fortunately, Binance confidently denied these allegations, which reassured investors. But still, such incidents significantly reduce confidence in the cryptocurrency market.
So traders should pay less attention to the hype and check information from reliable sources.
During the fall of the cryptocurrency market, people always find something to blame. For example, bitcoin futures, the loss of interest in the first cryptocurrency, the game to downgrade large players or even the Chinese New Year.
However, most likely, all this is false news. A similar case was the regulation of crypto exchanges in South Korea. Then, due to media news, everyone thought that in the near future, exchanges and trading on them would be banned in this country.
A few days later it turned out that the government would simply introduce exchange regulation and prohibit anonymous transactions. Such changes were for good and made exchanges more secure.
The conclusion is: do not believe everything you see or hear in the news and study the information yourself.
There are risks in any financial transactions or trades. So it should be understood that the goal of an investor in trading is not to completely reject risk but to choose a solution at what level this risk can be accepted.
The first thing a market participant should do if he invests or speculates is to allocate the amount of money that he may lose. Psychologically, this mark is at the level of 10% of monthly income.
In cryptocurrency trading, you must be able to pre-determine risks, adjust them and learn from your mistakes. It should be understood what potential profit and potential loss you expect.