What are the Common Mistakes made by Beginner Bitcoin Traders?
Bitcoin trading refers to buying and selling bitcoins over the Internet at varying prices. It is quite a popular activity among bitcoin users as it allows them to earn a considerable amount of profits with minimum effort. Bitcoin has a massive market value that keeps on fluctuating, so you can use it to make some profits through bitcoin trading. You can visit bitcoin-investor.app to trade bitcoins with great convenience. Most novice bitcoin traders make few mistakes, and you can read about them below.
Skipping paper trading
There are two types of bitcoin trading; first in which you invest real cash and earn real profits, and the second is paper trading; in which you trade only on paper. Bitcoin trading is a complex task, and you can’t gain expertise in it overnight as you need to gain proper knowledge and do a lot of practice. One of the common mistakes that most traders make is that they skip paper trading and directly shift to real money trading. If you are serious about bitcoin trading and want to get success in it, you must try paper trading first.
It is irrefutable that paper trading is quite boring, but it helps you to learns all the ins and outs of bitcoin trading and enhances your skills and knowledge to a great extent. It will offer you a real-time experience of bitcoin trading without putting any money at risk. So, if you are a novice bitcoin trader, you should always begin with paper trading and then shift to real money trading.
Not focusing on risk management.
Bitcoin is a highly volatile cryptocurrency, which makes bitcoin trading full of risks and uncertainties. Most bitcoin traders fail because they are unable to manage the risks and lose all their money. If you are starting with bitcoin trading, you must have an efficient risk management strategy as it will help you to minimize the risks to a great extent. There are several essential aspects of risk management, and one of them is stop loss. If you want to make accurate trades and avoid making mistakes like other traders, you must use stop losses.
Stop-loss is a unique feature that allows you to sell the bitcoins at the right time to suffer minimum losses. You can set the minimum price at which you want to sell the investment, and when the price will reach that point, the stop loss will be triggered, and you will be able to minimize the loss. Most of the online bitcoin trading platforms allow you to set stop losses and make profitable and accurate trades.
Paying too high fees
There are several bitcoin trading platforms, and each one of them charges varying trading fees from the traders. Some traders who don’t have enough knowledge about the trading platforms fall for fraud platforms and end up paying too high trading fees. You must avoid this mistake at all costs if you want to save some money. You must be careful while choosing a trading platform and try to pick one that allows you to trade at reasonable and minimal trading fees. You should try to choose a bitcoin exchange that has high trade volume, excellent liquidity, and minimal trading fees.
Choosing a platform with low trading fees will minimize your cost of trading and will help you earn maximum profits. If you are struggling to find a reliable trading platform with low trading fees, you can take the help of the Internet and read some online reviews as it will give you a clear idea and narrow down your list to a great extent.
Not focusing on analysis.
Bitcoin trading is all about analysis, predictions, and research, as without it, you cannot gain expertise in it. Numerous beginners directly start trading bitcoins without doing any analysis, which is a huge mistake. If you want to stay on the safe side and make an accurate trading decision, research and analysis are highly important. There are different types of analysis needed in bitcoin trading, so you must learn and focus on them while trading.
One of the most important types of analysis is technical analysis. You must have full knowledge about the different terms related to bitcoin trading, such as trading volume, candlesticks, low and high points, etc.