So we've covered a lot of ground in previous videos when it comes to crypto basics as a whole.
There's still a bit more to go.
There have been videos about crypto charts, the best times to buy and sell, basic terminology, and a lot of other topics.
You should now feel comfortable enough to get your feet wet.
If this is not the case, I would recommend you go and watch the previous videos in the series.
Most crypto newbies' doubts are quite similar,
and we know that there are mistakes that are commonly made when they start investing.
We all were there once after all.
Today, we're gonna look at what the most common newbie mistakes in the crypto world are and how to guard yourself against them.
Let's get it.
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Alright, guys.
Today, we're looking at common mistakes.
So, the first mistake we're gonna look at, which is pretty easy to avoid, is being too invested in what you're trading.
I'm not saying that you don't care about trading or don't care about any given trade,
but what I'm saying is,
don't bet everything on a trade working or a project succeeding.
Don't get emotionally invested with a crypto project.
This works into trading crypto not being your sole source of income as you start.
You're likely to lose money as you learn from experience,
as not all coins are going to be winners,
and so do not trade what you cannot afford to lose.
Although a lot of people have become millionaires with crypto,
some have lost out for different reasons.
Worry not!
If you take this seriously and do your own research,
the latter is not likely to happen.
Trading, in general and in crypto, is more of smaller increments than suddenly making it big with miracle projects.
Just because you believe that a project is going to work out does not mean that it will.
No matter what anyone told you,
there are no crypto fairies coming to make your wishes come true,
no matter how much you believe in them.
I’m a queen fairy.
So, be smart about your trades and make sure that you're not betting your house on a pile of dung.
Usually when people make trades like this, they're acting out of emotion rather than logic.
Being emotional about a trade or a project will lead to further mistakes,
and some of them are avoidable.
And while we're on this topic, it would be a good place to mention methods that are used to avoid betting on a lame horse.
stop losses
Not using stop losses is a big mistake.
So, I'm going to go over them quickly so that anyone who hasn't caught up yet can.
Stop losses are orders that will trigger and sell the asset should it reach a given price.
At that point, you admit that your idea was wrong and you are limiting losses.
Accept that a trade failed and move on.
Be cold about it.
Your ex has been saying you're emotionally unavailable,
so prove her right for once and do the same thing with your trades.
I don't know if that was the right move in your relationship, but sure is in crypto.
Going back to the topic of piles of dung,
don't buy worthless crypto.
You can fall for this in many ways,
and one of them is following the hype created around a project
and not actually doing the research needed to be sure it's a worthwhile investment.
Although it may sound cool to be trading in crypto,
it's not free money
and you need to do the boring work.
Make sure to take time when researching a project and see that the foundations of a coin you are thinking of investing in is solid.
There are many many scam projects out there.
Read the white paper and do the needed research to make sure that you are confident enough in the project to actually invest in it.
Or if you're too lazy for that, at least make sure to follow reliable sources.
Don't blame me if it goes badly.
Don't jump into a project just because someone tells you to,
even if it's me doing so.
FOMO for a new hot coin is not a good investment strategy.
I hope you know that.
Experienced traders are going to be exiting trades when it gets too crowded.
While newer traders may stay in a trade long after the smart money has moved out,
be confident enough in your research to not go with the herd.
Wake up, sheeple.
This also follows into falling for pump-and-dumps.
Don’t fall for hype created regarding a worthless project to buy high and then get stuck having to sell that worthless coin low.
If you see a project that suddenly found massive activity with no apparent reason,
it could be a pump-and-dump.
Now, on the topic of buying high and selling low,
don't.
Emotional newbies will look to buy a project that suddenly had a 75% increase.
Oh, yeah! This coin is on a tear.
I'm gonna jump in and make loads of money! They say.
Then it turns out, shortly after, it goes down and they lose out.
Those who invested in BTC back in 2017, led by FOMO, are still trying to make up for it.
Now, nobody can know what the project will do or that it might keep going up or might keep going down.
Right now, when you're looking at something peaking, it's a peak.
Given that it's already up, it's unlikely to go up more,
but you, being the emotionless robot that you are and having seen this video,
now you know that.
Instead, you'll look at projects that have been on an upward trend in the past
that you have done the needed research on
and hopefully now are looking possibly to make future investments.
When it takes a local downward fall,
you pounce.
Get out your tacos and buy the dip.
You want to make money, not give it to someone else.
Now, selling low does come from newbies holding on for too long.
Everyone keeps memeing about HODLing.
People have made money by doing that.
But people have also lost out on a lot of money by being greedy when the markets turn.
You want to be able to make profits even if they are less than their maximum potential.
You do not know the future.
And in crypto, dollar-cost averaging and selling an investment in smaller increments are both smart ideas.
As you see the price go up, you sell fractions of what you invested
to ensure that you actually make a profit and don't lose out on 100% of your investment.
This also lets you have the needed money to buy the tasty tasty dips when you see them.
Here we get to the Zen parts of trading.
Never thought I'd say that, did you?
First, know thyself.
Keep a trading journal.
And I don't mean be a teen girl who writes about, you know, the latest cutest coin in the class she’s in.
Just keeping a spreadsheet that tracks your trading activity
and shows you which trades did not work and which ones did
is a good way to know where your shortcomings are---
how to learn from your past mistakes.
Not keeping a trading journal is an easy mistake to make
and an easy way to repeat old cycles.
Another thing we can learn here is balance
in trading,
portfolio management.
Set some goals for the portfolio you have and make sure that you have enough diverse assets
with a solid backbone and a small amount of coins that are more risky.
Betting all your assets on a one shot is an easy way to lose all of your strong portfolio.
Being patient and having a strong portfolio is a good way to counteract that.
Perfectly balanced,
this whole thing should be.
Now, I'm sure you see a trend here.
Risk management is an important part of crypto
and with that, comes security.
Make sure to keep your wallet as secure as you can.
People getting hacked and losing all their crypto is in part because the person that was hacked did not keep their wallet source.
Hardware wallets are easy ways to keep your crypto assets secure.
Not only that, it's advisable to spread the assets around a bit
so that if at any point you're hacked, you don't lose it all.
But the biggest most important thing is when you make mistakes,
learn from them and you will become a good trader and investor.
But now it’s your turn.
Which of these mistakes have you made in the past?
Which other common mistakes did I miss?
Let me know what you think down below in the comment section.
I hope you enjoyed this video.
If you did, please make sure to smash the Like button and hit Subscribe to become a member of the BitSquad.
Thank you so much for watching.
Have a blessed day.
BitBoy out.