Ever since Bitcoin in cryptocurrency has gained popularity, we’ve been hearing news about how people gain money from it. You would have often heard that someone invested a certain amount ten years back in Bitcoin, and now they are millionaires.
Well, such stories are very common. So, if you too are willing to invest in Bitcoin and want to make good money out of it, apart from knowing what you should do, you should also know the mistakes to avoid. Hence in this block, we have discussed key ideas that will help you frame your trading strategy in Bitcoin or cryptocurrency.
Mistakes To Avoid In Crypto Investment
- Not doing enough research– Once you have decided to start investing in cryptocurrency or Bitcoin, one of the common mistakes that most people commit is that they don’t do enough research. There are sharks in the market who are ready to take your money away and to be making profits, and you have to be wise enough. This can only happen when you do the right research. Knowing what to avoid and which platforms not to trust will help you make the right call.
So, the first step you need to do when looking for investing in cryptocurrency is to do enough research. Never run after things just because other people are running after them. Don’t be emotional when it comes to investment or trading in cryptocurrency. Your investment decisions should be driven by thorough research rather than the fear of missing out.
- Not adopting the right strategy- adopting the right investment strategy also plays an integral role in defining your profitability from cryptocurrency investment. Most of the new investors opt for day trading. They will purchase the cryptocurrency in the market in the morning, and they will sell it off by the end of the day. This can prove beneficial in some of them but not every time. Hence, the one size fits all strategy should not work when doing cryptocurrency trading.
For example, most investors recommend that Bitcoin investment should be for the long term rather than looking for day trading. A similar goes for other cryptocurrencies as well. Hence when you are making a decision or planning to invest or trade, then you must define the right strategy.
There are several platforms offering trading tips and tricks that will help you frame the right strategy for cryptocurrency investment.
- Not choosing the right platform – When you have decided to go ahead with cryptocurrency investment, your first move should be to choose the right cryptocurrency exchange platform. Several parameters define the suitability of a cryptocurrency exchange platform, like the platform, must be secure and should accept payments via different payment options, for example, PayPal credit cards debit cards, and e-wallets the cryptocurrency exchange platform should also do the KYC, in addition, the platform must be easy to use.
If you are a beginner, these parameters are a must consider. If you find a cryptocurrency exchange platform that does not match these criteria, it is a no, and you should start looking out for a new one.
- Not diversifying your cryptocurrency portfolio – A common mistake committed by most first-time cryptocurrency traders is that they put all their money in one kitty. This is a strict no. If you want to gain more profit from your cryptocurrency trading journey, you have to diversify your portfolio to keep it balanced.
Rather than inclining all your money in One Direction or one cryptocurrency, you must distribute the amount to different cryptocurrencies. This must be done only after thorough research. You must be sure which cryptocurrency is worth the time and money, and once you find a convincing option, you must give it the go-ahead.
Knowing what not to do is equally important, and hence, when you have started the trading journey, you must avoid all these mistakes. Also, spend enough time learning about the crypto market trend and choose only a trustworthy platform to make your investment safe.