The Top 4 Cryptocurrency Trading Mistakes We’ve All Made
If trading were easy, everyone would be doing it.
We’ve all taken big losers. We’ve all left wins on the table.
And while it’s never fun to lose money, failure can teach us how to become a better traders.
Unless of course, you continue to make the same mistakes ad nauseum.
Smart investors accept failure as an inevitability – a temporary setback and as a teachable moment on what to do, and what not to do going forward. Here are some of the top mistakes we’ve all made – and hopefully learned from.
Top Mistake No. 1 – Riding your Losses
Some of us never want to give up on a trade that we truly believe in. However, it’s never a good idea to let your losers ride. Admit you were wrong on a trade, and jump out. Now, that doesn’t mean you can’t buy it again. But for the time being, let it go.
Top Mistake No. 2 – You Don’t Use Stop Losses
This is one of the worst things any trader can do.One of the biggest issues facing all walks of traders is a severe lack of discipline and structure. Many fail to use stop losses, or even protect gains with a simple trailing stop loss strategy. Others risk far too much.
Look at the Binance Coin (BNB), for example, which we initially highlighted around $10 using technical pivot points. After a tremendous run from $5 to $24.57 in April 2019, the best way to protect those current wins is to use a mental trailing stop of 10% for example. If it pulls back 10%, you’re out. However, if it never does, you simply readjust your trailing stop higher.
Learn How to Spot Unique and Predictable Patterns in Cryptos
Top Mistake No. 3 – You’re Betting too Much
When it comes to investing, many of us get over-excited. We believe we found the “must own” stock of the year that could run 1,000% or more. We wind up risking far too much of our portfolio. Remember, there’s no such thing as 100% certainty with stocks, though. Risk perhaps 1% to 5% of your portfolio on a trade. And work up from there if you find great success.
Top Mistake No. 4 – You Don’t Have a Trading Plan
Do you know when to exit on an up or down move? What stop losses or trailing stop losses do you have in place? Know these things, and set a plan so you won’t run into “crash and burn” scenarios as often as those with no plan.
Remove all emotion from your trading. That doesn’t mean you have to have ice flowing through your veins. It simply means you need to re-think your strategy. No matter what your emotion says, never allow emotion to dictate your trading action.
Never wait to take profits… If you have good profits in hand, take them. Exit half of the position and let the other half run. But don’t leave profits on the table for too long.
Even we’ve been guilty of these mistakes.
But as long as you learn from them, the better you are in the long-run.
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