While the crypto market is well known for two things, high volatility and scam projects.
That is why you should be so cautious about where you invest your money,
whether you're a new investor or seeking to invest in cryptocurrency,
this video will help you limit your margin for mistake. Hey everyone. Welcome to crypto trends
In today's video, we'll go over one of the most asked questions. How do people lose
all their money in cryptocurrency crash? So make sure to subscribe to the channel
so you don't miss out on any of our videos. So without further ado, let's get into it.
Mistake. Number one, trading strategy, going into crypto trading without a well-defined plan
is the most common mistake. Before you begin any deal, you must decide whether you will play the
long game or the short game buying and keeping is just as rewarding in the long run as day trading
hots use a practice known as dollar cost averaging in which they buy Bitcoin at regular intervals,
regardless of its current price in the long run dollar cost averaging is a more profitable
investment strategy. This is because there is no way of knowing for certain where the
bottom of a dip is, and it's doubtful that you'll buy the bottom of the dip every time.
Mistake number two, exit strategy. A great exit strategy is just as important as a trading
strategy. If you need to convert your profits into Fiat currency, you can withdraw them all
at once or over time withdrawing all at once may cause FOMO or fear of missing out. If prices rise,
this may prompt you to return to the game after cashing out. All of your winnings at once.
Profits should be taken at regular intervals and profits in dollars or percentages should be used
as a benchmark mistake. Number three, market tap. Another typical mistake made by traders is failing
to pay attention to order book depth. This is primarily due to the fact that most cryptocurrency
traders are unaware of what it is, how to monitor it and why it is crucial in trading.
The order book for a trading pair is displayed. When you click in the depth tab of a trading
terminal on an exchange, this is a depiction of the cryptocurrency pairs purchase and sell
orders on that exchange a chart in which the selling wave is larger than the buying wave
indicates that there is little demand for the traded cryptocurrency.
A sell wall is a price at which a big number of dealers will sell at
a depth chart with a buy order wave that is substantially greater than the sell order wave
usually indicates that there is a lot of rational demand for that cryptocurrency.
The steps in the buying wave are known as bylaws. These tend to denote support zones because many
people have placed orders to buy in. When the price falls to that level. Sometimes the salt
support you see in the depth charts, doesn't quite match up what you see on the price chart,
which might throw your plan to purchase the dip off track. If the depth chart seem arbitrary or
chaotic, you can use coin GetGos market tab to check the order book depth for the cryptocurrency.
You're interested in mistake. Number four, trading volume traders, completely disregard trading
volume. A cryptocurrency should have a large trading volume in relation to its market cap.
And that volume should be high on many exchanges. This is especially true for emerging ERC 20
tokens, which are only traded on decentralized exchanges like unis swap. The basic rule of
thumb is that if you observe a cryptocurrency trading predominantly on a decentralized exchange,
you should conduct further due diligence on it throughout your study. Also keep an eye
out for any unusual trade volumes on less or known exchanges. The trading volume reported
by coin market cap and coin gecko might sometimes be inflated by fake volumes. Mistake number five,
circulating supply coin market cap makes it simple to monitor circulating supplies.
It is significant because a low circulating supply relative to total or maximum supply
indicates that you may be dumped on by early investors or the project's team. This is why
it is crucial to review the vesting timelines for coins or tokens aside to the team early investors,
advisors, and any other parties who may begin selling vesting schedules can be discovered in
a project's white paper documentation, or in the details of an initial coin offering or ICO on ICO
dumps mistake, number six, market cap, the greater the market capitalization of a cryptocurrency.
The more money it will need to raise its price. If you wanna make a quick 10 X
opt for lesser known alt coins, alt coins on the fifth or six pages of coin market cap or
coin gecko typically have relatively low market capitalizations implying that it takes less cash
to drive up their prices. This also implies that less capital is required to push it down.
Mistake number seven, fundamentals. Don't be one of those investors that
invests in the project and then expects the price to rise for no apparent reason.
The number one killer of crypto gains is expectations. Any trader's anticipation is
that the price of cryptocurrency will increase. This may induce one to open a leverage position
with no stop loss and 100 X leverage resulting in being utterly destroyed. Leverage tokens offer
reduced downside risk and do not urge you to increase leverage putting your capital at risk.
Unrealistic expectations are created by others, particularly through the news. It is simple
to believe any form of news, especially if it is promoted by well known. People
do your research since not everything you hear on the news is factual
mistake. Number eight, poor choice of crypto exchange.
Choosing the appropriate reputed crypto exchanges is a crucial step in ensuring that your money is
safe and secure. A cryptocurrency exchange is a company that provides a platform for users to buy,
sell, and trade their crypto assets in exchange for Fiat money or other cryptocurrencies. There
are many crypto exchanges out there. So you should look at factors like transaction costs,
geographical constraints for support founders, the range of cryptocurrencies available
and the platform security given the frequency with which crypto exchanges are hacked.
We recommend that you keep your crypto in cold storage, not connected to the internet.
Final thoughts. Finally, there are no safe bets in crypto trading as a newbie.
We recommend that you be extra cautious and don't put all of your eggs in one basket.
Have you ever lost a significant portion of your investments in cryptocurrency dips?
If so, please share your experience in the comments section below.
This would help others. When investing with that being said, here we come to the end of
our video. I hope you like this video. And if so, then don't forget to subscribe to the channel. So
you never miss any video. See you in the next video till then take care. Thanks for watching.