Cryptocurrency Mistakes & Tips - Deepstash
Cryptocurrency Mistakes & Tips

Cryptocurrency Mistakes & Tips

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Cryptocurrency Mistakes & Tips

🌎 Cryptocurrency

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1. Have a strategy for crypto trading

It isn’t easy to separate genuine cryptocurrency recommendations from the scams; there are lots of sharks out there waiting to take your money.

Reports of crypto investment scams surged to 7,118 in the first nine months of 2021. This was up 30% on the whole of 2020, according to Action Fraud, with the average loss per victim at £20,500.

So when you’re confronted with a lot of information about a cryptocurrency, take a step back from the hype.

Try to look critically at the project or platform. How many users does it have? What problem does it solve?

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2. Manage risk

Some people offering crypto trading tips might not have your best interests at heart. So don’t get stung making the same mistakes as others.

Set limits on how much you invest in a particular digital currency and don’t be tempted to trade with more money than you can afford to lose.

Cryptocurrency trading is a high-risk business and more traders lose money than don’t.

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3. Diversify your crypto portfolio

It doesn’t pay to have too much invested in one single cryptocurrency. Or as they say: don’t put all your eggs in one basket.

As with stocks and shares, spread your money out among different digital currencies.

This means you don’t risk being over-exposed should one of them plummet in value – especially as the market prices of these investments are highly volatile.

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4. Be in it for the long term

Prices can rise and fall quite dramatically day to day, and novice traders are often duped into panic selling when prices are low.

Cryptocurrencies are not going to go away. Leaving your money in the crypto market for months or years at a time could offer you the best rewards.

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5. Automate purchases

Just as with regular stocks and shares, it can help to automate your crypto purchases to take advantage of pound-cost averaging.

Most cryptocurrency exchanges, including Coinbase and Gemini, allow you to set up recurring buys.

This is where crypto investors tell the platform to purchase a fixed amount of their preferred cryptocurrency every month – for example, £100 worth of bitcoin. It means they get a bit less of the currency when prices are high, and a little more when prices are low.

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6. Use trading bots

Trading bots can be useful in some circumstances, but they aren’t recommended for beginners looking for crypto investment tips. Often, they are just scams in disguise.

If real algorithm existed that timed your buy and sell trades to perfection, everyone would be using them!

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common crypto mistakes

The latest research from UK regulator the Financial Conduct Authority showed that about 2.3m Brits own cryptocurrency in one form or another.

It’s very easy to get caught up in the hype of news headlines. Crypto mistakes are startlingly common, and below we list some of them.

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1. Buying just because the price is low

Low prices do not always represent bargains. Sometimes prices are low for a reason! Watch out for cryptocurrencies with falling user rates.

Often, too, developers leave a project and it stops getting properly updated, making the cryptocurrency insecure.

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2. Going ‘all-in’

Some of the more suspect trading platforms suggest you should maximise your money by betting as much as possible. This is a quick way to the poor house.

Better crypto investment tips would be to only use a certain proportion of your investing capital — say 5% — and always keep an emergency cash fund in an easy access savings account that never gets invested in the market.

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3. Thinking crypto is ‘easy money’

There’s nothing easy about making money through trading any kind of financial asset, whether stocks and shares or commodities like silver and gold. The same can be said for cryptocurrency.

Anyone who says different is probably trying to trick you into making crypto mistakes.

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4. Forgetting your crypto keyphrase

If you have a hardware wallet for storing your crypto offline, forgetting your keyphrase is like losing the keys to a bank vault.

Without your keyphrase, all your cryptos will be irretrievable.

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5. Malicious wallet software

The best crypto tips will tell you to stick with big name crypto wallets, such as Ledger, Trezor, Exodus or MetaMask.

Dodgy or unknown wallets that you find on Google Play or the App Store can steal your crypto funds with dodgy code.

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6. Fake coins

With so many cryptocurrencies on the market, it can be difficult to tell what’s real and what’s not.

When you invest in fake coins, criminals can steal your identity and often your hard-earned money.

Don’t take anyone else’s word for it and use as many sources as possible to do your own research on coins before you buy them.

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CURATED BY

crt7

🙋Am a self taught Digital Creator , Editor 💻 from India 🇮🇳 , as well as a Technologist and a COD Gamer 🎮. Interested in learning📒 new things always for keeping up with the trend .

CURATOR'S NOTE

With this handy guide any beginner can learn how to come up with the best trading strategies and avoid common cryptocurrency mistakes.