Learning And Earning From Your Trading Mistakes - Is It Possible?
Noob traders — young males with a passing understanding of computer science who earned a quick profit on a few cryptocurrencies and brand themselves CryptoGuru or CryptoKing – are all over social media. For those curious about what happens to men like that, continue reading as we provide you with some mistakes that noob traders do but are not totally wrong.
Author:James PierceReviewer:Camilo WoodFeb 04, 20224.4K Shares344.7K Views
Noob traders — young males with a passing understanding of computer science who earned a quick profit on a few cryptocurrencies and brand themselves CryptoGuru or CryptoKing – are all over social media. For those curious about what happens to men like that, continue reading as we provide you with some mistakes that noob traders do but are not totally wrong.
Never Hold On To A Losing Trade
You may greatly increase your chances of success in trading if you follow this one simple guideline--never hold on to a losing trade.
When you're trading cryptos, preserving your trading money should be your first concern. Every time you stick onto lost cryptos until they rebound, your losses are wiped, and you feel like a million bucks. This is a good strategy.
It's important to question yourself, though, whether you're trading to gain self-confidence or to generate money. The answer to the question is of paramount importance. While trading for the sake of feeling like a genius is a great motivator, it may also lead to disastrous results if the deals you've made are losing money. There is a good chance that this method will succeed at least part of the time.
If you don't follow this rule and continue to hold on to a losing trade, you'll lose whatever you've gained in other cryptocurrencies and have much less money to invest in the future, making it far more difficult to turn a profit.
In the end, selling a failing investment is a painful procedure that crystallizes your loss. It entails severing relations with a cryptocurrency with which you may have been romantically involved.
Brand Name Is Not All
There's more to a company than just its brand name.
It's blasphemous to some to think that Bitcoin (the first and most renowned cryptocurrency) would not take the globe by storm. When I made the suggestion at a conference, I was met with gasps from crypto exchange operators whose lives relied on Bitcoin's popularity. That being said, there is no such thing as a safe haven in this world. Netscape was the Internet browser of choice for most people in the early 1990s when most people had access to the Internet.
Warren Buffet's Strategy
Aside from being a master of the buy-and-hold strategy, Warren Buffett is not a tech genius. However, one thing he is a master of is effectively purchasing and holding. Some of his investments have been in place for decades. "I don't want a company that's simple for my rivals," he adds. "I want a company surrounded by a moat, with a very expensive castle perched above it."
In other words, he wants to know that the asset he intends to invest in is nearly impenetrable. If a corporation has a loyal customer base, they are likely to have a hard time convincing them to transfer allegiances to a rival. Despite the fact that a large number of individuals currently hold Bitcoin, very few of them actually utilize it to make purchases (yet). People may easily switch to one of its rivals if they so desired.
Bitcoin Is Very Risky
When Bitcoin's value plummeted by 93% in 2011, it took almost two years for it to recover to its former high. For the first time since 2013, Bitcoin has returned to its pre-crisis levels.
In each of those crashes, there was a chance to sell at the peak and purchase at the bottom of the market. We I don't want to lose more than 90% of my asset every few years, thus we won't be purchasing Bitcoin and keeping it forever. I'd rather take advantage of the increase and avoid the worst of the downturn than deal with it all.
Cut Your Losses
Every new trader should adhere to a guideline that most experienced traders follow religiously. When your losses are still tiny and insignificant, it is best to close out lost transactions and reduce your overall exposure to risk.
Losing 50% of your money in a transaction means you'll have to work really hard to get your money back. Why? Because only to go back to where you started, you had to create a profit of 100%! It's necessary to double your remaining money in order to come back to the initial amount of money you had.
Keep those losers around just in case they end up becoming winners, right? There's no need to take my word for it; my rule is supported by a wealth of factual facts.
Grow Your Profits
When your transaction is already earning you money, it's time to give it some breathing room. Since you acquired it three months ago, the value of your cryptocurrency has soared by 100 percent. You've made a full profit on your deal thus far.
The price is likely to drop by as much as 30 percent when investors begin to take winnings from their successful trades. This is a common occurrence in long-term uptrends, and it occurs on a regular basis.
So why not sell and reap the rewards of your hard work?? So as to keep up with the overall trend. The two-year bull market trend in Bitcoin would have earned you a 6,000 percent return if you had just held onto it.
Summary
It's okay to commit mistakes while doing your trade. Mistakes are a part of who you are becoming. The more mistakes you commit, the more you can learn from them. There are a lot more mistakes and faults that you might commit. So, don't beat yourself too much.
James Pierce
Author
Camilo Wood
Reviewer
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