August 11, 2021

Classic Mistakes Investors Make (and How To Avoid Them)

Owing to the ever increasing hype around the industry, cryptocurrency is today seen by many as an alternative to both cash and investment vehicles. The prospect of 100x in the future leaves no one cold. In the pursuit of profit, a lot of people forget that investing in a virtual asset can lead to both high returns and large losses. In our blog, we often describe the failures of crypto traders. This time we’ll talk about investors. Kindly note that the mistakes listed in this article are common not only for newbies. The army veterans are constantly stepping on the same rake as well. So today every reader will learn something interesting. With that said, let's get started!

Irresponsible Investment

Golden rule, don't invest more than you can afford to lose. Remember, investing money for the rent, tuition, vacation is simply unacceptable. Otherwise, you will face financial ruin. Shut out this voice inside of you that's telling you "don't stop now and invest more".

It is better to have a fund, which is used exclusively for risky speculation. Some analysts and investors believe that it should not exceed 1% of your portfolio. Define the sum you are ready to say goodbye to in advance. Of course, setting strong targets and risk management is not the easiest aspect of investing. Nevertheless, the difference between a modest income and a total loss of funds is simply huge.

Another aspect of irresponsible investing is blindly following the signals of popular analysts on social media. We've been over this in the early article, remember? Please believe none of the rumors and lies that you will no doubt hear about crypto. The best way is to check each asset for its fundamental and technical merits. A reasonable investor should come up with findings of his own and make informed decisions. Don't let mob mentality take over.

Ignoring New Knowledge

Don't ever think that you already know everything. Don't let pride possess you. Because of it, you will persist where you shouldn’t, ignore some sound advice, and lose perspective. Even the top gurus in the crypto land are constantly learning something new, updating their knowledge, and refining skills - they live for this sphere. If you've got a breadth of knowledge and stopped at that – you've already lost. Phrases like "I don't need it, I won't need it, I already know and can do it" would do no good. The greatest single secret to success is professional growth. Be critical of yourself, this is vital. Self-education doesn’t take long, especially since the Equite blog has all the necessary materials and instructions. New content will be out in the future.

Neglecting Backups

Didn't back up your wallet? The drive which has the wallet with precious coins got broken? You can kiss your crypto goodbye. Lost Bitcoins are lost forever. So to return your coins and protect money in the case of force majeure - make a wallet backup. It ensures that you will not lose access to your funds. By the way, choose a wallet carefully and pay attention to the details. Looking for the best option, we recommend that you familiarize yourself with the features of paper, web, mobile, and hardware wallets.

Wrong Transfer

The situation when you make a mistake by sending funds to the wrong crypto wallet is familiar to both "green" and more experienced market players. There is nothing more insulting to a great investor than mistakes born out of carelessness because they could have been avoided. You have to thoroughly check everything before transferring money, take it slow.

Bottom Line

We're all in investment for our own reasons. There are many of them. However, experience shows that mistakes are often the same. Fortunately, now you know more. We hope that you will make fewer mistakes in the future. In order not to reap the bitter harvest of your financial decisions, please refer to the biggest mistake of crypto investors, which prevents many from arriving at a result. Good luck!

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