Most investors often complain that it is hard to make money in crypto market, blaming the crypto market for their losses. On the other hand, we also hear stories of savvy investors making spectacular profits from investment opportunities that are often missed by others. So what’s going on here?
After investing in crypto market for more than 5 years, I came to realise that most crypto investors often make the following mistakes that often cause them to get “rekt” and loose their money.
1. Investing based on emotions, without a logical pre-defined buy and sell rules
Most people often invest based on emotions. They usually buy a coin because they feel that the coin price would go up, without any idea on how much the coin they are buying is worth. Trouble is, our emotions tend to get the better of us most of the time and this often lead to poor investment decisions.
2. Stubbornly Holding On To Losing Coins
Without a logical set of pre-defined sell rules, investors often find themselves holding on to losing coins for a long time. They usually “justify” their decisions by thinking that the price of the coin will rise eventually.
The problem with this approach is that by holding on to losing coins for too long, the risk that the investor is assuming often rises to dangerously high levels. To make matters worse, when he finally decides to sell the coin, he will usually incur a loss that is much larger than intended.
3. Investing based on a prediction of the crypto market direction
At any one time, there would usually be one group of analysts predicting that the crypto market would go up and another predicting that the crypto market would crash. So who’s right?
The truth is, no one can consistently predict the direction of the crypto market. And contrary to popular belief, you do not need to predict the direction of the market in order to invest successfully! Rather, it is more important to able to spot whether the market is on and uptrend or downtrend and invest based on the current market trend.
So what does this all mean?
If you are planning to increase your wealth by investing in the crypto market, it is crucial that you avoid these investment mistakes at all costs. And that’s just the start! The next logical step before you start investing is to do deep research of the coins you intend to invest and make sure that coin is currently not overvalued. If you decide that coin has potential to grow in value next step is to pre-determine set of buy and sell rules. With these rules, you would likely to be less emotional when it comes to making investment decisions. In the long run, you stand a higher chance of achieving consistent profitability. So there you have it. All the best to your investment success!