A cryptocurrency exchange is a platform for trading and exchanging certain digital currencies against others (bitcoins, altcoins and stablecoins) or against various global fiat currencies (rubles, dollars, euros). The most popular and trusted platform for digital asset trading is, for the fourth year in a row, the Binance exchange, but there are plenty of other decent platforms for trading as well, like eToro. You can read more about eToro by clicking on the link.
Many people go to a cryptocurrency exchange in the hope of quickly making money on cryptocurrency price differences with minimal effort. However, reality makes its adjustments and a novice trader can quickly be disappointed with this type of activity. Why is this happening? Which are the errors to avoid?
The main mistakes of traders
Start trading with large amounts
It is better to take your first steps in trading, using small trading orders and not committing the entire deposit at once (and, above all, avoiding putting it in the purchase of a only cryptocurrency). Calm and balanced attitude to trading, it is difficult for beginners to analyze what is happening if 100% of their deposit was invested in a certain cryptocurrency at a time, which instead of growth suddenly began to fall or fall. already fallen, for example by 10%.
Coverage of losses
Carrying out losses involves selling an asset that has “cheated” your hopes of growing below its purchase price. If there is no reason to worry that you bought the asset at the highest price, you should not rush it off at the first drop, the price may go up. Analyze the situation in the market and draw your own conclusions.
Make decisions based on excitement, emotions, and unfounded information
Keep a cool head and analyze the situation soberly. Spontaneous, impulsive, or motivated by panic or greed decisions are very bad for trading. Above all, rely on your experience and verify the information you receive
Use of trading bots
Do not rely on trading programs (trading robots – bots) if you do not have a clear idea of how they work and what to expect from them. Free bots can be deliberately infected with viruses at the time of their creation. But even safe (usually paid) bots don’t have a perfect trading methodology, although in some situations they can compete successfully with human traders.
Neglect of security issues
Paying too little attention to the security of your trading account, email, and computer in general is a mistake that often has dire consequences. Always use two-factor account security (2FA) and a reliable computer with good antivirus.