Flash crashes and bear markets have both cost me money. It took me a long time to figure it out, but I did. I’ll share my experience with you in this article so you don’t make the same mistakes I did.
How not lose your earnings on crypto Bitcoin
Cryptocurrencies remain a means of making or losing money easily. Every day, thousands of newcomers enter this industry, the majority of whom lose their money. Novice buyers are not often aware of how to invest correctly in cryptocurrencies. High variance, irregularity, decentralization of this sector, and other factors all contribute to this. Furthermore, many investors depend on fast profits or passive income. Even if they have a lot of expertise and understanding, not every investor can make money fast in the crypto industry. Before you begin investing in the crypto market, familiarize yourself with the fundamentals that will help you make less errors and avoid losing any of your money.
Don’t begin your crypto investment journey with margin trading.
In general, leveraged trading is the most effective and risky trading technique. Although, unsurprisingly, the higher the debt, the higher the cost and future profits.
Different exchanges provide different levels of leverage to customers. On the BitMEX cryptocurrency exchange, for example, a leveraging of 1: 100 is accessible. If the price moves in one of the directions by just 1%, you can increase your money in a matter of minutes if you use full leverage. If you do not use a stop loss, you risk losing all of your savings.
Margin dealing necessitates a great deal of practice and self-discipline, and it never overlooks even the tiniest of errors. Starting with margin, the first foray into the crypto industry is certain to be a financial disaster.
Begin by using the Binance exchange. Purchase a number of different altcoins. Keep an eye on their actions. After that, once you’ve acquired experience, you should go on to marginal platforms.
Trading the opposite/against trend of the current pattern
Inexperienced crypto investors may decide to bet against the trend if the trend is consistently heading in one direction. Most of the time, the investor would lose his or her capital. But don’t expect this strategy to succeed the next time. It is very difficult to make money by betting against the trend.
On the crypto market, don’t forget about protection.
Neglecting electronic protection will jeopardize your assets’ safety. Hackers are up at all hours of the day and night, able to assist you in getting rid of digital riches in the most ingenious ways possible. Keep your private keys secure, don’t submit cryptocurrencies to strangers, encrypt your data with cold wallets, and don’t install unknown apps on your device. To engage in crypto investing securely, try to make life as difficult for hackers as possible by securing your records.
When it comes to investing, don’t depend on your gut.
Experience produces intuition, which certain investors confuse for a sixth sense. If you don’t have at least a few trading books under your belt, several months, if not years, of real-world trading experience, and a trading approach, your insight is something of a hobby. Opening positions based on intuition rather than logic will easily reset your account. Most beginners to the crypto industry start investing based solely on their instincts. They might get lucky at first, but good investing is unlikely without experience. Do not spend solely on intuition to avoid losing your money; instead, keep up with the latest crypto news.
Don’t be afraid to put your money into a rising commodity.
Beginners always believe that getting the lowest rate possible is a smart strategy. Yes, it is occasionally; the investor’s goal is to purchase low and sell big. If we look at the short to long term, though, an asset’s price increase is evidence of its pattern. And a minor correction is what it takes to profit comfortably from a currency that is gaining prominence. The Binance cryptocurrency exchange’s BNB registered token is an illustration. The crypto price of 1 BNB was $6 in early 2019. Many people abandoned the coin after it gained 100% of its worth and soared to $12. (although they entered even earlier and at higher values). BNB is reportedly trading at a price of more than $560.
When it comes to cryptocurrency investment, rushing is a negative indication.
Beginners are particularly keen to get into a trade as soon as possible if they see a successful chance. Around the same time, risk estimation precision, thoughtfulness of entry, and implementation consistency are often harmed. A beginner to the crypto industry believes that if he doesn’t move in now, he won’t get rich. This strategy is incorrect. Any trader’s worst enemy is haste. Every exchange you make should be the product of steady, measured thought, and should never be made in haste. Furthermore, each exchange should be dependent on your expertise and an overview of cryptocurrency prices.
Diversify your investment portfolio.
Why is a lack of diversification in the cryptocurrency sector risky? Investing in a single coin leaves you vulnerable to a dump, or a sharp and unpredictable decline. Trading a single tactic on a losing streak will deprive you of money if it turns out to be unsuitable. When you keep all of your digital money in one spot, you make yourself an easy target for hackers. Diversification is the only way to address these issues. Invest in a variety of techniques. Have a cryptocurrency fund. Distribute all you can so you don’t have to rely on mistakes.
Keep up with the latest cryptocurrency data/news.
Professional analytics, trade recommendations, and other useful knowledge are easily accessible across a variety of providers and tools. You can easily locate those forums, where experts with several years of experience in their sector can assist you in avoiding the most common blunders. In the world of crypto investing, being in a knowledge vacuum cannot be very complex or interesting.
To make a good investment, you must always keep up with the news and continue to read.
The most common blunder made by new investors is trading without a stop loss. There is no better way to waste all of your money than this.
12 crypto-currency challenges and how to avoid losing your money
Billing and phishing
Assume you’ve agreed to give a few coins to a friend. You copy his wallet’s address, but the virus on your screen replaces it at the last second, right before you push the “send” button. Not everybody would think to check the address a second time before sending, particularly because it is a long string of random characters.
Phishing occurs when an attacker copies the site of a common crypto exchange or wallet and extracts user passwords; unlike conventional banks, which have management tools and client funds insurance, crypto-currency providers do not. Furthermore, the bank has the authority to cancel fraudulent transactions on rare occasions.
The payment portal was hacked.
Hackers were able to introduce themselves to the service hosters domain owners and install code to intercept transactions in June of last year, when the famous online purse Ethereum Classic started withdrawing money from customers’ wallets.
Fortunately, the hackers were greedy, and they began stealing money too soon, exposing the fraud, but they nevertheless managed to steal $300,000 in a matter of hours, and the harm could have been much worse if the problem had not been discovered in time.
Not insured and conventional financial institutions are at risk, and there have been cases in the past where hackers were able to infiltrate even banks.
Error correction
Crypto currency has certain pitfalls, and consumers must use extreme caution when transferring funds: it is possible to make an address error or transfer money to the wrong party.
But, if a user Ethereum reaches the recipient’s ETH purse address without the last character, the amount sent will vanish for good and go to the intended wallet, but the amount sent will increase 256 times.
In this way, bitcoin has an advantage: it verifies the identity of the address, but you can always make a mistake and lose a lot of money.
The wallet file was misplaced.
Another danger for crypto currency consumers is losing their wallet. Not a real wallet with cash and cards, but a file with personal keys that grant access to the tools that most people keep on their computers and can therefore be hacked by hackers or lost in the event of a hard drive malfunction or damage.
What is the best way to tackle this issue? A USB wallet can be purchased or several backup copies of a file can be created. You may still use “cold” storage, but this is a facility reserved for the wealthy, and the spaces are still limited.
Traditional financial institutions are much better to use than decentralized crypto-currencies today since they employ a variety of safeguards to guarantee the protection of their clients.
An ICO that is fraudulent.
With the introduction of crypto currencies, start-ups were able to collect money for their initiatives practically “on the knee” – what they needed was access to the Internet.
The Ethereum blockchain, which hosts almost all ICOs, is a significant advancement, yet the uncontrolled market seems to be causing a slew of issues, and consumers aren’t only left with no guarantees; they can’t even determine their risks. The only thing they have left is the founders’ name and the expectation that their investments will pay off.
As in the real world, the majority of crypto-currency start-ups fail – yeah, there is a bright idea, but that does not mean that it would turn into a viable venture. Furthermore, the owner will easily take all of the funds raised during the ICO and leave investors penniless, since crypto currency’s anonymity makes it possible to launder money.
Creating a fake email account.
When the ICO begins, a public address is posted on the dedicated website to which investors can submit funds, which opens up the possibility of fraud.
Bitcoin will lose its appeal.
A fork occurred in mid-2017, splitting bitcoin into two parts – Bitcoin and Bitcoin Cash – with the goal of rising network capacity and transaction rates, lowering commissions, and accelerating the proliferation of technology.
So what happens if the company abandons bitcoin? More than 150 businesses now use Ethereum’s blockbuster and smart contracts, which allow you to check transactions and execute them under specific circumstances, which is difficult with bitcoin. The price of bitcoin will fall as the number of people who prefer Ethereum grows.
During a fundraiser campaign, an attacker hacked the site and changed the company’s address to his own, stealing over $ 8 million from investors in under two hours. And after the corporation warned customers that the address was forged, investors wanted to send money to the hacker’s address, and the perpetrator made another $ 2 million.
Cryptocurrencies will no longer be accepted by large businesses.
Over the last two years, an increasing number of retail establishments have begun to adopt bitcoins and other coins as a form of payment, something certain buyers see as a positive sign and an opportunity to purchase crypto-currencies while they are still cheap.
However, this may also be a cause of aggravation. If bitcoin’s volatility continues to rise, it’s possible that the company will soon stop accepting the digital currency. The problem is that bitcoin transactions take a long time to process, because the price of bitcoins can fall between the time the buyer transfers the funds and the time the seller converts them to a hard currency.
Excessive government oversight
The crypto currency was recognised as legal tender in Japan in March 2017, and the CME Group announced in December that it would begin selling bitcoin futures, bolstering the market with a new trading option.
In October of the same year, China and South Korea banned the ICO, and the People’s Republic of China also outlawed the operation of exchanges in the region. As we can see, a lot depends on government decisions, and legislation can both support and hurt the crypto currency’s job.
Exchanges in cryptocurrency have been hacked.
Crypto-currency cyberattacks are not rare around the world, but the effects can be devastating. Mt. Gox, a Japanese stock exchange that once accounted for more than 75% of all bitcoin trading, was compromised just four years ago. The exchange had to file for bankruptcy, and she said that coins worth $ 6.9 billion, as well as standard currency reserves, were stolen. Following this case, the market took a long time to rebound, and bitcoin lost about 80% of its value.
Bitfinex is also in a similar position, as the exchanger is in charge of handling about half of all bitcoin trades. If Bitfin is effective.
Calls on the margin
When the CME Group introduced bitcoin futures to the market in 2018, everybody was ecstatic. Futures allowed financial institutions to own bitcoins without having to use decentralized exchanges, which was thought to be a very positive event for both the crypto-currency market and Wall Street. Furthermore, some speculated that the currency’s uncertainty would be reduced as a result of this occurrence. But it seems that not everyone is aware of the situation.
The reality is that the introduction of futures enabled financial institutions to gamble on bitcoins and use them for hedging for the first time. Furthermore, individuals with varying levels of financial literacy will also participate.
Investors’ sentiments
Often, since private investors are the dominant force in the industry, the decline in prices for bitcoins and other crypto-currencies may be triggered by their vulnerability. Retail investors, in comparison to financial companies, are often more reactive when making decisions, which can lead to misguided behavior based on the surge of feelings.
The majority of the sudden market swings in bitcoin and other crypto-currencies is caused by speculation – or, conversely, a frenetic purchasing spree.
When dealing with cryptocurrencies, use common sense.
Hot wallets, cold wallets, online, offline – it all sounds confusing, and you might be unsure how much encryption is appropriate for you. So let’s go through a rundown of common sense ideas that you should adapt to fit your unique financial situation.
1. How much money do you keep in your online portfolio if you aren’t regularly selling funds? Almost certainly zero. Shift your funds offline to a computer where you have hold of the secret key until you’ve done trading for the day.
2. Just keep as much money in a hot wallet as you will in your actual wallet for day-to-day transactions. Why would you keep more cryptocurrencies in your hot wallet if you don’t feel safe keeping more than a few hundred dollars of fiat currency in your actual wallet?
3. Will you leave tens of thousands of dollars scattered around your home? Isn’t it likely that you’d keep it in a home safe? The majority of your cryptocurrencies should be stored in cold storage on your mobile (disconnected from the internet).
4. How about gold coins worth tens of thousands of dollars? Will you feel comfortable keeping everything in your house safe? It would be a good idea to keep it in a safe deposit box. If you have enough cryptocurrencies that losing it will put you out of business, I strongly advise you to purchase at least one dedicated cold storage unit and store it in either a fire-proof safe at home or, for added protection, a safety deposit box.
Experts say that if you treat cryptocurrencies carefully, it’s just as secure as dealing with cash. Is it possible to misplace cryptocurrency? Sure, but I’m guessing the majority of people have misplaced or dropped cash on the ground. Is it possible for your cryptocurrency to be stolen? It can, but money is stolen every day, both on the street and in elaborate pyramid schemes like Bernie Madoff’s. You must be cautious and thoughtful when dealing with cryptocurrencies, just as you would with cash. You should have no trouble defending yourself from online robbers or unintended failure if you handle it as diligently as fiat money and use common sense.
Add Your Heading Te5 Reasons Why People Lose Money in Crypto
Cryptocurrency is one of the most widely studied tradable assets nowadays. And if you weren’t aware of the word a few years ago, we’re certain you’ve seen or read anything about it, which has led you to this post. When people participate in crypto trading, why do they risk money? People lose money all the time, whether it’s in the crypto trading world or not; the issue is how they do it in general.
If done correctly, crypto trading is one of the better “money-making” strategies available today. To help you prevent disappointment, we’ve put together a list of 5 things to watch out for and reasons why people lose money.
Social Media Suggestions
Traditional media has become outdated as social media has become the go-to medium for communication. To keep up with the new knowledge highway flow, ads will naturally go through these networks. Buying coins based on “Tips” given by ICOs or people wanting to sell their coins to maximize the worth of what they have is a terrible idea.
To put it another way, anybody may say, “My coin is better than yours; buy it now before it attracts further interest and you skip the train as rates rise” –a very familiar line you might have read anywhere online. They’re attempting to build a phony “hype” that might lead to catastrophe.
There Isn’t Any Precise Trading Strategy – Jumping off the top of the Empire State Building into the world of crypto trading without a plan is like jumping off the Empire State Building! You would not be able to withstand the fall.
The best source for crypto trading strategies is the latest ebook for crypto trading newcomers, which is the best source for crypto trading strategies. Newcomers are taught crypto trading from the ground up and in great detail.
The book covers a wide variety of high-probability trading techniques and describes it in great depth so that novice traders can learn to trade profitably without relying on others. The tactics outlined in the ebook are adaptable to a variety of market conditions, so the reader can learn how to profit in almost any situation.
The expenditure is insignificant in comparison to the experience gained by the reader and the high returns that can be achieved.
The following are some common trading techniques that will help you learn the ropes and one day profit from it:
Holding – If done correctly, HODL can be lucrative. Buying at a cheap price and riding it until you like you can’t make any more money. That’s like going into space on a spaceship and then bailing out until it crashes! The majority of investments for long-term ownership are made when the valuation is very low, and they ride the “Bulls” as the market advances over months, if not years.
Buy the Dip – Purchasing when the price of a commodity falls is one of the oldest tactics in the book. Buying at a low point in time where the value is low almost inevitably leads to profit when the price rises! I
Copy Trading – A novice trader can benefit from copy trading to use it as a benchmark to which to test their own abilities. What we’re trying to suggest is that today’s trading/exchange websites allow copy trading. This helps an investor (you) to copy the trades of seasoned traders who have registered. Please bear in mind that you are not copying trades from “trade stars” who can never make a mistake; there are humans, and copy trading without any prior experience of the market can be fatal. Always use restraint when copying traders! com and 1Broker.com are two examples of websites that have this service (1Fox.com).
Stop Limit Order – A stop limit order is a function that can be used to limit the amount of money that can be traded.
HODL – “Hang on for dear life” is a phrase used in the Bitcoin culture to describe individuals who hold cryptocurrencies amid falling commodity values in the expectation of a future rebound. Most exchange/trading platforms also have a feature called “Stop Loss,” which allows you to monitor the loss of your savings by establishing a “safety net” that can stop your loss early and prevent you from going bankrupt. Holding on to a coin through difficult times is possible as long as you are not losing a significant amount of value; but, if you purchased the coin at a high price and are losing a lot of money, you can let it go and not hang on to prevent more losses. However, as previously said, HODL can be lucrative if done correctly.
Leverage – Failure to comprehend the calculations and how quickly they are liquidated
If not used correctly, margin betting crypto or using leverage may be disastrous. What is margin trading and how does it work? For example, if you sell with a 20:1 leverage, you will gain $20 if the price of your trade rises $2; but, if your investment fails and the price falls $2, you will lose $20 instead of winning $20. A leverage exchange is often expressed as a ratio; for example, with a 20:1 leverage, you can buy $20 worth of assets for just $1.
The most common trading adage is “Never sell more than you can afford to lose,” which makes margin trading, or the use of borrowed money, a risky proposition.