Breaking Bad Habits That are Killing your Trading Results. Part 2
Crypto is considered to be the future of the global economy. Year after year, a currency that does not have the physical form of the usual money, but preserves all its properties, rouses greater attention. Many people dream of making a quick buck on exchange rate volatilities, however, not everyone succeeds. Attempts to catch up the market, neglect of the stop loss, buying/selling assets at the slightest price fluctuations are to blame (discover more in our previous article). Today we will continue highlighting the pitfalls to be avoided and habits that are better to give up.
You Trade Excessively
For the most part, newbies make the same mistakes. For some reason, they believe that the best way to profit is to make as many trades as possible. Well, we hate to break it to you, trading more frequently does not mean that you will earn more money.
The better option to avoid long-term losses is to limit the number of transactions you make per week. As a rule of thumb, to get an adequate profit, it is enough to conduct a couple of transactions per week. If you go on trading several times a day, you will soon notice the inefficiency of your portfolio. Being conservative about the number of transactions made is an important skill of a successful trader.
You Invest All the Capital in the First Deposit
This habit is more typical for those who take the first steps on trading. Dreaming of raising money on the digital asset market, crypto lovers forget about wealth management. Thus, they make a major mistake — they transfer all the funds to the trading account.
Crypto is always a risk, but for novice traders, it is growing exponentially. Remember that you have to pay a heavy price for mistakes in investment decisions (both literally and figuratively). Therefore, it is more reasonable to put a small part of the trading capital. It is recommended to allocate 10% of all funds for the first deposit. Of course, not all newbies have enormous amounts of money, but even with a little capital, it is not worth risking more than half of it. The initial goal of a trader is to gain experience, not profit.
You Keep the Profit on the Exchange
Experienced market players know full well that keeping all the capital on the crypto exchange can be dangerous. The risk of losing everything is great. The platform can be closed at any second. It can block access to the personal account of its users. We don't want to scare you, but such situations happen more often than we would have liked. Beware of hacking poorly protected accounts.
There are safer places to store magic internet money: crypto wallets, virtual payment systems, debit cards. If you do not plan to use the profit as part of a trading deposit, we recommend you withdraw it regularly.
You Ignore the News
The price of cryptocurrency heavily depends upon the news background. Unfortunately, many traders forget about this part. Awareness of a particular event in the virtual world will allow you to identify potential trends (more details about them are here) and open transactions in a timely manner. And the best way to keep up to date with the latest news is to follow us on: Twitter, Facebook, or Telegram.