Bitcoin trading is a profitable but difficult thing to do. If you, do it right, you can earn huge profits, but a single mistake can make you lose all your money. So, before you start trading bitcoins, you must learn about the mistakes that most traders make, but you need to avoid. Some of the bitcoin trading mistakes that you need to know about are as follows.
Skipping paper trading
There are two types of bitcoin trading; trading with real money and paper trading. Bitcoin trading requires incredible skills and knowledge, and if you try it with proper knowledge, you may have to face some huge losses. It requires a lot of practice which is why paper trading is recommended for beginners, but most of them avoid it. Most novice traders directly start real money trading, which is a mistake that you need to avoid at all costs. Bitcoin trading is not going anywhere, so there is no need to rush. The more practice you will do with paper trading, the higher profits you will be earned with real money trading. https://crypto-superstar.io/ is great software to trade bitcoin and there is multiple software like this software that allow traders to enhance their trading skills.
So, if you have decided to try your hands in bitcoin trading, you must spend a few weeks doing paper trading and enhancing your knowledge and skills. Once you gain enough confidence in your skills and are fully prepared, you can shift to real trading and invest real money in bitcoins. You may be able to earn some profits without paper trading, but you won’t survive in the market for long.
Follow random advice
There are several self-proclaimed bitcoin trading experts over the Internet, and each one of them offers varying advice and claim that their advice can make you earn millions. If you are trading based on their random calls, you are making a huge mistake. If you are new to bitcoin trading, you must not follow others; instead, it is better to do your own research and make your own decisions. Even if you follow their advice and make some profits, it won’t work for you forever as at some point you will have to make your own decisions.
So, it is better if you focus on technical analysis and learn to do proper market research to make the most profitable trading decisions with great ease and comfort. You must avoid such pump and dump calls, especially in the beginning, as they can kick back quite hard and bring losses for you.
Going for revenge trading
It is obvious that if you are trading bitcoins, you will get profits as well losses, but some traders aren’t ready to accept the losses. When they face any loss, it hurts their ego, which makes them angry. It induced them to trade for revenge which most of the time make things worse. So, while bitcoin trading, you must not make the mistake of revenge trading as most of the time, it will increase your losses, nothing else. Profits and losses are the parts of bitcoin trading, and you need to accept that someday you will get profits, and at some days, you will have to face losses.
No traders ever earned 100% profits, and if you keep that in mind, it will become a lot easier to accept losses. Revenge trading pushes you to make decisions purely based on your emotions, and they are wrong most of the time. So, you must maintain a balanced ratio between risk and reward so that you won’t get stressed and start revenge trading.
Using margin trading frequently
Margin trading, better known as leverage trading, refers to borrowing money from the trading platform and get into trading. It is highly beneficial as it allows you to make big profits without making any investment, but some traders use it in excess, which is a wrong thing. You must not get addicted to margin trading as it involves high risk and can create some problems for you. There are equal chances for getting a profit as well as loss during bitcoin trading, and if you are using margin trading, you will have to repay the loan even if you face a loss. So, you should only try leverage trading once you have gained enough confidence in your trading skills.