Trading is an art that requires your absolute attention to the minutest detail. It is important for you to possess the necessary skills if you want to be successful as a trader. When professional traders make mistakes (no one is above mistakes), it is most likely due to a miscalculation. There are however, a number of mistakes that a trader should avoid. Below are five (5) of them.
Looking for a short term approach with more profits
Cryptocurrency is not a get-rich-quick scheme. It is not Ponzi. If you decide to venture into crypto trading, you must be patient enough to wait out the storm of market uncertainty while observing the market. As a newbie, it is most advisable to use 10x when trading Futures. Focus on Spot trading until you are well acquainted with the process. Also ensure to use funds that you can afford to lose because in most cases, you may have to wait for weeks or months before making profit. So, do not venture into trading with the mindset of making profit in a short term.
Spontaneous trades because the chart looks good
You should always carry out technical analysis before making a trade. That the chart looks good or the market is green does not indicate a go-time for a buy or sell. As spontaneous as you go, you could also spontaneously get rekt. The crypto market is a crazy place so you must ensure to stay calm and collected at all times. Carry out research on the project and find out the reason why the market is moving that way. Check the media for any big announcement then make your move.
Trading too often because "I want to recover faster from losses"
In reality, getting rekt by the market is sometimes an indication that you need to stay off for a while. Newbie traders often think professionals sit 24/7 in front of a screen trading. This is so not the case. Learn to take some time off to relax and socialize. Ask questions, read books, observe the market. This will help you in the long run to become a successful trader. Also, learn to say No to some signals. Avoid jumping into every single trade that looks good.
Trying to catch a top in the market
Trying to catch a top in the market is extremely risky. As my good friend Ezekiel once advised, "the profit you are seeing is yours. Take it". When trading, it doesn't have to reach your take profit (TP) before you close a trade. Instead of trying to catch the top of the market, you can use stop loss on a profit zone to secure some profits for yourself while trying to get to your take profit zone.
Get distracted by social media
Looking out for big announcements about a project on social media is an essential part of your decision making process in trading. It is important to find out if there has been an announcement of something big about to happen for a project before buying or selling. Sometimes, bad news for a project means you should sell while good news is capable of causing a pump for a coin which puts you in instant profit if you are able to buy in at the right moment.
On the other hand, news can be manipulated for the purpose of attracting investors. This is where technical and market research comes in. Do not act upon every word from social media. News platforms can be bought, influencers can be bought. Know the difference between a false information and a real one. Avoid popular trends without real facts to back it up. Avoid these 5 mistakes and you will be well on your way to becoming a pro trader.
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