Don't Do These 5 Things If You Don't Want To Lose In Bitcoin Trading

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JAKARTA - Driven by investor enthusiasm, the cryptocurrency market, including Bitcoin recently crossed the US$3 trillion mark for the first time, but the past few days the bitcoin price crashed with the issue of a new variant of the COVID-19 virus. This puts into perspective the craze surrounding digital currencies, which have emerged as a lucrative investment tool.

However, along with massive returns, cryptocurrencies come with their fair share of hardships as well. Fixed assets are highly volatile, which often discourages investors from putting their money there.

Considering the pros and cons of cryptocurrencies, as a crypto investor, you should be careful to avoid these mistakes if you want to make a lot of money from them:

1. Only trading and not willing to learn

Again, the focus is only on buying bitcoin and looking at the price. Cryptocurrencies are more nuanced than they seem. It is not recommended to enter the crypto market as a complete beginner without knowledge of how it works.

To begin with, one should have basic knowledge and technical analysis of cryptocurrencies before investing in them. Paper trading, where novice investors can learn the basics via a trading simulator, can be a good way to get started. Similar simulators are also used to learn stock market trading.

2. Mindset that is not long term

No investment can generate returns overnight. Not even cryptocurrencies.

Like any other investment instrument, crypto investors need to be patient. The volatile nature of the nascent market adds to the need to treat cryptocurrencies as long-term investments in order to maximize them.

3. Invest without a goal

Investing without a purpose is as useless as traveling without a purpose. Setting goals for your cryptocurrency investments will help you understand the up, down and sideways market in a matter of hours.

Having clear long-term goals will help you understand how much profit you need in a given timeframe. This will make your coin of choice more organized.

4. Jumping without a plan

In a volatile market like cryptocurrency, the importance of having an investment plan grows manifold. Investors should have well-defined entry and exit points before investing in cryptocurrencies.

The entry point is the price at which an investment instrument is purchased, and the exit point is the rate at which the instrument is sold to realize a certain profit margin. Never invest on the basis of belief because then you will be busy chasing higher values.

5. Trading on unsafe platforms

Amidst all the digitally available investment assets today, cryptocurrencies are the ones born in that space. This is by no means safer from cybercriminals than other asset classes.

There have been several successful attempts to hack cryptocurrency wallets and entire platforms. The market is also full of scam tokens, as are Squid Games tokens, and scam platforms.

Beware of these scammers before you put your hard-earned money into cryptocurrencies. Always choose a trusted platform and currency, or it will be a bitter lesson you learned the hard way.