Bitcoin trading can be fascinating, especially to those who are just about to kickstart their crypto journeys. While this can offer a lot of hopeful income-generating opportunities, there are no shortcuts to mastering how to get the most out of these thrilling potentials.
However, some folks are eager to bag every opportunity possible, even without fully understanding how trading works. This often leads to disappointment, confusion, and even loss of funds—we certainly don’t want you to experience any of these.
Here’s a list of the top bitcoin trading mistakes made by newbies—and some pros, too—and how you can avoid them from happening to you.
1. Jumping into crypto trading without understanding how it works
We’ve all probably had a strong urge to quickly get ourselves into something interesting, but jumping into the unknown without making an effort to learn what it is and how things work can lead you to unwanted results.
If you’re planning to try your hand at bitcoin trading, doing your research, along with learning how it works and how you can properly make it work for your own good are not optional—these are all required steps.
Remember, your BTC funds are on the line here and no matter how tiny or massive the amount may be, it’ll still be painful to lose them. You may also want to consider making your own decisions and not only relying on anyone you consider an expert. You own those funds, so you must know how to manage them on your own properly.
2. Investing money you can’t afford to lose
Investing in bitcoin can yield promising outcomes when done fittingly, but it can also be tricky and risky when you don’t have an idea of how to properly earn an income out of it.
You might want to consider investing only an amount of money that you won’t regret losing. Bitcoin can be a highly volatile asset, and its price movements can be erratic and unpredictable. While its price shifts exceptionally high and sometimes low, no one surely knows the exact timing of when these movements happen.
That’s one reason why putting in vast amounts of money in every trade offer—especially on your first—may not be the best way to earn big. To help you get an idea of how much you can profit from your trade, keep an eye on the exchange rates of bitcoin to INR, USD, EUR, YEN, or other fiat currencies.
3. Making trading decisions based on emotions
The saying “never make a decision when you’re emotional” is applicable and helpful in many aspects, including bitcoin trading. This is truly evident, particularly when BTC prices go overly high.
Some traders let their fear of missing out (FOMO) drive them to buy bitcoin when there’s a price dip and then HODL their coins until the market price rises—or never again. Others sell bitcoin when there’s a surge in price, hoping to earn more from even higher rates. But when the prices decline all of a sudden, they’ll feel regretful and frustrated.
Emotions might be an important factor when making almost each of our daily decisions. But don’t let that get the better of you, especially when your crypto funds are at stake!
4. Storing BTC funds on unreliable crypto wallets
Choosing a reliable digital wallet to store your crypto funds is very crucial. You’ll be surprised to see thousands of available BTC wallets online, but it’s best to scout for known, reliable, and secure ones in your region.
Some bitcoin peer-to-peer marketplaces like Paxful provide a free BTC wallet upon creating an account on the platform. It’s also accessible almost everywhere, so you can buy bitcoin in India and other South Asian countries, and every part of the world.
Having a highly secured and reputable digital wallet can save you from unnecessary worries and give you a good night’s sleep—no need to check whether your funds are still there or not every three minutes.
5. Trading just for the sake of having active offers
Some inexperienced traders think that having many active offers can yield lots of instant profits. While this is true at times, there are some instances where the market offers limited to no profitable trade opportunities.
Patience is a virtue, so they say. And that may also be true when it comes to bitcoin trading. Overtrading may not be the best option for gaining multiple incomes all at once. Experienced traders often look at the market’s timing—when the prices usually shoot up or decline—and then decide from there.
Keep control of your funds and build dependable trading strategies
We’ve listed the five most common trading mistakes in the crypto space, but there’s undoubtedly a lot more. There’s a lot of great opportunities to unlock when you trade bitcoin, and it’s better to grab them without having to go through a lot of mistakes and possible losses. Patience is the key here, so familiarize yourself with how bitcoin trading works, check for the best time to buy or sell, and never let your emotions get in the way!
Disclaimer: The content of this article is for informational purposes only. The opinions expressed here are not meant to be taken as financial, investment, or any other advice, nor do they express the opinion of Paxful.