Crypto Mistakes to Avoid as a Beginner
Trading is as much an art as it is a science despite what technical analysts and chartists may say. This is especially applicable to cryptocurrency trading, which happens to be a developing market that tends to get volatile at times as well. Here, values can change all of a sudden because of factors such as illiquidity, herd behavior influenced by social media, and the manipulative whales. Millions of new investors enter the cryptocurrency market every year. Since cryptocurrencies are immensely unpredictable most of them lose money, which is not surprising at all. This is why there are some mistakes that must be avoided in this context as such.
FOMO
FOMO or the fear of missing out is a powerful psychological force that leads people to make impulsive decisions. As far as cryptocurrency trading goes, FOMO compels investors to purchase assets when prices are skyrocketing in the hope that they do not miss out on further gains. This means that they often buy at the top of a market cycle and this can lead to sizeable losses when the prices correct themselves inevitably. Finally, FOMO can also result in crypto scams. A lot of investors have been lulled into taking part in Ponzi schemes or buying worthless tokens because of this.