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Nowadays, it seems like everybody is talking about the cryptocurrency space and making money out of it. Overnight success is not an impossible story in the crypto market.
While there are numerous ways of making money, there are just as many ways to lose money. More often than not people lose all of their money on the market, but those stores aren’t as popular as those who succeed in the boom.
Losing is all too common when you deal with such volatile assets. But is losing unavoidable? Here are several main reasons for losing money; learn from mistakes, and you may come out stronger and wiser.
Lack of understanding of the market
Not all of us are “experts” or have conducted deep research into a project. We often make the mistake of relying too much on “experts” without learning the market ourselves.
Is the market with high liquidity? Does the crypto have enough potential? To know when a trade setup is good, you need to know what moves the market.Do your own research.
Lack of trading skills
Are you a good trader? Have you developed your own trading strategy? There are many people who have been trading for years and still don’t know how to read a candle chart or use technical indicators.
It’s very important for traders to have their own trading styles so that they won’t follow the crowd and start trading based on emotions. Many exchanges provide tutorials and some even offer a personal account manager to help users.
Trading too much
Emotional trading is very common. Novice traders often push their limits to chase the highs in hope of getting a greater payday. When the price drops, they are often the fastest to flee the market and lose any hope of earning back their money.
Every trade they make costs them a fee that adds up to these losses. Be patient and stay in control. Additionally, always remember to divide your stash so you don’t sacrifice everything in one go. Don’t throw in all your money at once.
Forgetting to set stop-loss and take-profit order
Trading without a stop-loss or take-profit orders is like driving a car without breaks. It is true that we usually don’t like to admit defeat and are too greedy to sell a winning position.
But we can’t always be right and win, especially in these volatile markets. Trading is a long-term business and with proper stop-loss and take-profit levels, we can be safer.
Novice traders are easily scared and discouraged whenever the price drops. Cryptocurrencies are volatile, this is why they are so attractive. When you invest in cryptos, you need to have the patience and gut to deal with price fluctuations.
Is your exchange the right one for you?
There are hundreds of cryptocurrency exchanges out there, some with higher fees than others. Good exchanges allow traders to securely enter positions without charging too much to allow them to participate in the market. On some platforms, the user interface and rules are so hard to learn, traders need too much time to adjust.
If you are looking for a good exchange, find one with a demo account. With a demo account, you can practice trading strategies, learn to control your emotions while trading and learn to analyze the markets.
Successful traders are those who learn to analyze the market, keep themselves on top of market news, and keep trying out different strategies. A good demo account serves as a sandbox for you to improve your skills and get familiar with the fast-changing market.
Bexplus offers BTC, ETH, DOGE, ADA, and XRP futures contracts and provides users with 10 BTc in demo accounts to try out new strategies. Bexplus is trusted by over 800K traders around the world.
It charges no deposit fee amd traders can receive the most attentive services, including 24/7 customer support and personal account manager.
- Demo account with 10 free BTC
When you sign up, you can get the 10 free mock BTC in the trading simulator which enables you to practice trading futures contracts without losing money.
- Wallet with annual interest
Prices go up, prices go down, but the Bexplus BTC wallet offers interest on deposits despite market conditions. If you would like to be more passive or take a break, the Bexplus wallet lets you keep earning.
Users can get a 100% deposit bonus for every deposit on Bexplus. If you deposit 1 BTC, 2 BTC will be credited to your account, but profit needs to be gained with the bonus so it can be withdrawn.
Featured image via Unsplash.