- When required, experienced traders will leave trades.
- However, stop-loss orders must be used in every single transaction.
Let us take a look at the three crypto mistakes every trader should avoid.
Invest What You Can Afford to Lose
While it may seem obvious to avoid borrowing money from institutions or family members for trading in the crypto market, some traders rely on the success tales they hear from individuals who have earned a fortune with Bitcoin, Ether, and altcoins. A proper risk management system and trading only with money investors are willing to lose crucial for any trader, regardless of their level of risk appetite.
FOMO Mentality
Following the crowd blindly and jumping into a transaction after a coin has already soared is another frequent FOMO mentality. When required, experienced traders will leave trades, make judgments, and stick to their plans. For newbies, greed is a frequent feeling in trading, which means they may lose out on profitable exit positions.
Use of Stop Loss
The capacity to accept a loss and go on to the next transaction is a talent that every trader should have, even if it takes some time to learn. Establish the stop-loss so that even if the transaction goes against it, the losses will be limited to the amount that has been set. Setting a stop-loss may help to avoid blowing up the money in the unpredictable cryptocurrency market.
To establish a stop-loss on an exchange, investors need to know how much money they have to work with and how much they want to lose. However, stop-loss orders must be used in every single transaction.
