4 Common Mistakes You Should Avoid When Trading Cryptocurrency
Today, you can invest in cryptocurrency quickly and easily. You have the liberty to invest with the help of online brokers, but you cannot say for sure if this is a foolproof venture. There are a lot of risks and pitfalls that you need to face if you are thinking of entering this field. However, you don’t have to become a master in the world of computer science or finance to get started. What it means is that you have to make an informed decision. In this article, we are going to talk about some common mistakes that most cryptocurrency investors make. Read on to find out more.
1: You Buy the Wrong Coins
If you have made your mind to purchase Bitcoin, you have to be careful. There are different types of Bitcoin, such as Bitcoin private, Bitcoin SV, Bitcoin Gold, and Bitcoin cash. In other words, there are numerous offshoots that you need to watch out for.
Although these are not bad or scams, make sure you know what you are buying. Even if you purchase the wrong coin, you can still sell it back and look for the right one.
2: You’re not for the Wild Ride
If you want to enter the world of cryptocurrency, you have to have nerves of steel to face the volatility. Unlike the traditional finance world, cryptocurrency has extreme volatility, according to Theresa Morison who is a certified financial planner in Arizona.
According to her, as a new investor, you should invest a small sum in the beginning, such as $100 per month, and then forget about it. If you keep an eye on the market on a daily basis, it will drive you crazy.
Apart from this, just because you are a beginner, you may want to stick to 2 to 3 cryptocurrencies that you are familiar with. Ideally, you may consider the established coins first such as Bitcoin and Ethereum.
3: You don’t Double-Check the Address
Many cryptocurrency traders lose their coins just because they don’t double-check the address. Unlike a conventional bank transfer, you cannot just reverse a transaction. So, you have to be really careful when making this type of transaction using cryptocurrency. If you don’t be careful enough, you may end up losing thousands of dollars in seconds.
4: You Lost Access to your Wallet
Although there are a limited number of 21 million Bitcoins, the entire number of Bitcoins are not being created. The reason is that many of the coin holders have lost access to their wallets because of forgotten passwords.
According to the report from Chainanalysis, 1 out of 5 Bitcoins mined so far is not accessible because of Lost passwords. Therefore, make sure you store your password in a safe place before you start reading.
In short, we suggest that you avoid these four most common mistakes if you want to become successful in the world of cryptocurrency trading. Hopefully, these tips will help you be on the safe side and achieve success as a trader or investor.