DONT Make These Crypto Trading Mistakes!!
The number one mistake cryptocurrency traders make is going in without a well-defined plan, and most of this involves deciding on a timeline If you are in it for the long haul, you are better off holding and dollar cost averaging. If crypto is a short term affair, you will have to do your research to find promising altcoins that could 10x or more.
“Exit strategy” has a different meaning depending on who you ask. While fiat is nice to have, it is losing value by the day. Bitcoin may be a better “cash out” option, even compared to other assets Profits can be taken in two ways: all at once or gradually over time. Like dollar cost averaging, it is safer to take some profits every time a certain dollar or percentage gain has been made
Market depth can be measured using the depth chart on cryptocurrency exchanges and on some coin tracking sites like Coingecko If you see a depth chart where the buy wave is larger than the sell wave, this suggests that there is not much demand for the cryptocurrency being traded The “steps” you often see in the sell wave are called sell walls. Sell walls mark a price where a lot of traders will be selling. The larger the sell wall, the harder it will be to push past that Sell walls normally develop around psychologically comfortable prices which may not always match up to what’s seen in the price chart. The reverse is true for sell waves and sell walls in market depth
The trading volume you see on sites like Coinmarketcap and Coingecko give you a bird’s eye view of the trading volume for that cryptocurrency across exchanges This makes it possible to easily spot any volume abnormalities which could suggest price manipulation. A cryptocurrency should have lots of trading volume spread across multiple exchanges If you see a cryptocurrency that is trading primarily on a DEX, be sure to give it some extra due diligence during your research
Circulating supply is important because a low circulating supply relative to the total or maximum supply means that there could be a risk that you’ll get dumped on by early investors or the team behind the project. This can be easily checked using the grey bars on CMC
The larger the market cap of a cryptocurrency, the more money it will take to push its price up. This is why you have to go looking for lesser-known altcoins will small market caps if you want to pull a quick 10x
Investing in a cryptocurrency project just because you expect the price to go up for whatever reason is the number one trading mistake. Having expectations is the number one killer of crypto gains More often that not, people will FOMO in in the first few minutes expecting a price pump, and maybe it does pump by a few percentage points. It feeds on itself as those who see the pump try to catch it Then a whale comes by and dumps on those new investors, leaving them wondering why they bought that cryptocurrency. Instead of banking on a boost from some bullish news, take a moment to ask yourself if the cryptocurrency you’re investing in has *some fundamental* value that makes it worth trading or holding.
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.