Bitcoin trading is not without risks and uncertainties. It is an art that comes with a great deal of experience and expertise. No surprises then why traders are likely to face big losses initially, unless of course they are plain lucky. The important thing to remember in trading is that there will be some good days and some bad days. But there are some common mistakes that one must avoid when trading Bitcoins to improve his chances at making profits.
Common Bitcoin Trading Mistakes:
1. You must never start selling or buying Bitcoins on the basis of hearsay or unfounded tips. So, just because your friends or colleagues are all praises for a certain cryptocurrency is not enough to start investing in it without doing proper research first. Following advices of so-called investment gurus can land you in a great deal of trouble. Learn about some effective bitcoin automated trading bots available in the cryptocurrency market as they help even beginners to trade like a pro. Visit https://www.bitcoinrevolution.org/fr/ to know more about bitcoin automated trading bots.
2. It is a big mistake to start trading after a news release on the assumption that the market will move in a certain way. Cryptocurrency market is flooded with trading pairs and these can rise or fall dramatically after the release of some significant news. You may feel that you are right about predicting the direction in which the prices will move, but you may be completely wrong about it. A proper trading strategy will help you profit from price volatility without risks.
3. Another common mistake that traders often make is misusing the stop-loss order. The purpose of this is to halt trades if your trading strategy fails to yield results. It is not for a risk-free trade whenever the market swings in your favor. So, a stop-loss must be decided after proper technical analysis. It is always safer to stick to the original plan and change the stop-loss only when dictated to do so by technical evaluations.
4. Related to the above argument is another key mistake that traders make, and that is trading without the stop-loss in the first place. This is a classic rookie mistake because first-timers tend to think that these stop-loss orders will lock them out of trades, whereas the prices may actually bounce back to a stage where they could have made profits. This prompts them to disregard stop-loss for their subsequent trades and they end up setting only profit orders. This is a gamble that may or may not pay off.
5. Bitcoin traders may start trading too many crypto coins and in doing so, they lose focus. If you wish to increase your chances of earning profits you should focus on trading few pairs, and not on tracking 20 distinct crypto coins.
6. You should never keep tweaking your trading strategies and adjusting indicators simply because you may have lost some back-to-back trades. Such losses are common for crypto traders and evaluating your strategy on the basis of a handful of results is not wise.
7. Most people in the crypto world are seen to use terms like “overbought” and “oversold”. If you wish to know the art of trading different trends through use of indicators, you must indentify such oversold or overbought markets. Markets can always be oversold and it can be like this for long periods; the same is the case with uptrend.
