Cryptocurrency trading is what everyone has been talking about lately. The crypto market stirs up the financial industry from time to time with its extreme fluctuations. These unstable moments in the cryptocurrency market bring forward new hoards of people who are looking to benefit from the large profits that often follow the fluctuations. Traders new to the industry often don’t pay attention to the details in their rush to make large profits.
However, it takes much more than putting some of your money in an asset to make a profit. In their rush to join the trend, new traders make many fatal mistakes that can slow down or stop the profit ratio that they make from investments. Shay Benhamou, a cryptocurrency investor and expert, shares some things that traders should avoid when they are investing in cryptocurrencies. Let’s take a look at some things that Benhamou has mentioned traders should avoid.
Things To Avoid When Crypto Trading
Trusting An Advisory Group
You will find many pages and groups on social media that say that they can help you become successful with crypto investments. More often than not, these groups are a hoax because people are easily manipulated about things that they are not familiar with. You should remember that you cannot become successful with your investments if you don’t understand what you are doing. These groups follow the information that the trading signals and analysis tools give them. You also have access to those things because your broker or exchange platforms provide them.
Lack Of Clear Plan
Shay Benhamou says that a common thing among new traders is that they don’t have any long-term plans. This is a dangerous way to enter the crypto market because cryptocurrency investments are often long-term. This is because you have to wait for a long time, if the volatility is low, for the rates to go up. So, you should invest the money that you can afford to have locked away for a while. Shay Benhamou says that traders should at least have a rough outline of their plan before they jump into investing in assets.
Focusing On One Asset
A lot of the new investors jump into crypto trading because of an article or news that they came across. People who join the industry like so only focus on one asset, say Bitcoin. It is very risky and unadvised to put all your money in one single cryptocurrency. Traders should always diversify their portfolios and invest in different currencies instead of focusing on just one.
Following The Hype
The media has much influence on the cryptocurrency market. While political changes cause cryptocurrencies to fluctuate, media outlets have the power to convince people. Misleading titles on web pages and ads often make things seem better than what they are. So, Shay Benhamou advises people to not fall for such things without proper investigation.
Rushing The Investment Deals
People need to remember that online trading doesn’t bring instant profits. In fact, when you are investing in cryptocurrencies, you often have to wait for several months before hearing any good news about your investment. So, if you have invested your money into an asset and its market value hasn’t gone up, you should wait for a while before selling it to prevent more loss. This is a common mistake that people make and often the perpetrators of this act are the people who joined the industry without any knowledge of how trading works.
These are some of the common yet very damaging things that traders often end up doing. Now that they have been highlighted by an expert such as Shay Benhamou, I am sure that you will be able to see the damaging aspect of these actions. As a new trader, you have to be extra careful with what you are doing because you will be establishing the basis of your career. So, if you are a new trader, make sure to avoid the above-mentioned mistakes that Shay Benhamou has discussed.