Cryptocurrency trading can change your life. It can help you to fulfill your dream within a short time. But to become a successful cryptocurrency trader, you must learn to trade this market with fixed sets of rules. Moreover, you have to avoid the most common rules and only then you can succeed as a currency trader. Never think you know everything about this market. Keep on reading about the crypto trading industry and it will definitely help you to avoid the most common mistakes.
As a trader, you can commit hundreds of mistakes in the retail trading industry. But this is not going to make you rich. You need to know about the most common mistakes at trading so that you can avoid them in the real market. Go through this article as we are going to highlight the top 4 deadly mistakes in the crypto trading profession.
The new investors in the crypto market always think the market is in the uptrend. They never think that the crypto price might start moving in a new downtrend. As a cryptocurrency trader, you should keep in mind that the price of the cryptocurrencies will go through different phases of the trend. Unless you focus on the different phases of the trend, you will never learn to protect your trading capital from the sudden change in the trend. Learn to use the trend line in an effective way so that you can find reliable trade signals. If for any reason, the price of the asset breaks the trend line, consider it as a sign of trend reversal.
Trading with the unregulated broker
Many people often consider the unregulated broker as the prime industry to start their trading career. But if you get more info about the elite broker, you will never feel interested to trade with the low-end brokers. The low-end brokers never give you access to the tools which you can use to find the best trade setups. In fact, you will experience heavy slippage and this will definitely ruin your performance. Some people may argue by telling that the low-end brokers have low deposit requirements and give you access to the high leverage account. But leverage is more like a sword that can harm you tremendously.
The greed factor
After winning a few trades, the rookie traders start taking the trades with an aggressive attitude. They think they can earn as much money as they want. But in reality, they are digging a big hole in their career path. You have to trade this market without having any greed. If you take aggressive steps or trade with high risk, you are not going to earn more money. In fact, it will become really hard to accept the losing trades. That’s why smart investors trade this market with 1-2% risk since they know it can allow them to earn a significant amount of profit.
Selecting the time frame
Do you know that higher time frame trading is much more profitable? Sadly, the rookies start their trading careers by using the lower time frame. They keep on executing the trades and expect to make a big profit in this industry. Slowly they develop the habit of overtrading and blow up the trading account. To avoid such a critical problem, you should be trading the market in a daily or the higher time frame. Moreover, selecting the lower time frame increases the risk as cryptocurrencies are extremely volatile. Unless you select a higher time frame, you won’t be able to deal with the false spikes. However, if you still wish to trade in the lower time frame, we strongly recommend that you learn to do the multiple time frame analysis. By doing so, you should be able to execute more trades in the lower time frame but the risk factor will not be high. And do not forget to emphasize the higher time frame data while doing multiple time frame analyses.