Mistakes in Cryptocurrency,
Top 21 to 30,
Newbies Make when trading That Can Be Avoided!
21. You Don’t HODL Hard Enough; Mistakes in Cryptocurrency
On the flip side, lots of investors are impatient and ‘cut their losses’ early because of emotions.
The cryptocurrency market is made of cycles, where prices rise and fall drastically.
If you buy high, then you will need to wait out an entire new market cycle to end up with profits – meaning a new bear, then bull run – which can be well over a year of waiting.
Remember: if you still believe in the project, then your best bet is to be patient and hold strong, even if the price is dropping fast.
22. You’re a Math Noob; Mistakes in Cryptocurrency
Any successful investor needs to understand the basic maths behind trading. If you don’t understand the real implications of a 20% drop, it’s time to learn.
Here are some examples of math-related confusions:
• If an asset drops 50% in price, it does not need to raise 50% to break even again. In reality, it needs to raise 100%.
Think about it: if you purchase a coin for $100 and it drops to £50, it needs to double (+100%) in price from £50 to hit £100 again. If it only goes back up 50%, then you will have £75 – still at a loss.
• The difference between an 80% loss and a 95% loss is extremely significant. To break even after an 80% loss, the price needs to bounce back 5x. To come back from a 95% loss, you’re looking at 20x.
Every 10% drop, makes a bigger and bigger difference.
23. You Don’t Use 2FA; Mistakes in Cryptocurrency
The crypto world is the wild west. Full of opportunities, but extremely dangerous.
One crucial step when working on your cryptocurrency investment strategy is to reinforce the security of your cryptocurrencies.
Enabling 2FA on every sensitive website is the most important habit you need to adopt to increase the security of your accounts.
2FA, or two-factor authentication, is another layer of security upon login. Most cryptocurrency exchanges, wallets, and services offer to enable 2FA.
To enable 2FA, you will need to download an app on your phone – either Authy or Google Authenticator, and sync it with the exchange or wallet via a QR code. It’s super simple.
Next time you go to log in to the exchange/wallet, you will be required to enter your username, password, and the passcode that the 2FA app shows. The passcode changes every 30 seconds, so for someone to hack your account, they will need your phone as well.
24. You Leave Your Coins on Exchanges; Mistakes in Cryptocurrency
One of the most famous mottos in the crypto industry is “if you don’t control your keys, then you don’t control your coins.”
Exchange are huge targets for hackers and are always at risk. When you leave coins on an exchange, the exchange controls your coins. You are trusting the exchange’s security measures and not your own.
Do yourself a favor – keep your coins in a personal wallet.
25. You Don’t Own a Hardware Wallet; Mistakes in Cryptocurrency
I will be straight up: if you’ve invested more than $500 in cryptocurrencies, then hardware wallets are a smart investment.
They are disconnected from the internet, which means that hackers can only obtain your funds if they steal your physical device and also know the passphrase to access it. This makes security a much easier task.
If you have large amounts of money, say over $5,000, then it may be worth buying two. The second can act as a copy to the first one, in case you lose it.
Hardware wallets such as the Ledger Nano S are incredibly secure, reliable, and easy to use.
26. You Don’t Know Best Security Practices; Mistakes in Cryptocurrency
Both the wallets and websites you choose to use hold sensitive personal information – do your best to keep it safe!
If someone compromises your accounts, then you can say goodbye to all of your funds. Take security seriously, and learn from those who have learned the hard way.
When using a wallet, hardware or desktop, be sure to:
• Avoid using Public Wifi
• Avoid using unsecured software/extensions • Use strong passwords
One more important tip: do NOT use your daily email address when you navigate the crypto space. Use a separate one dedicated to your cryptocurrency investments.
27. You Don’t Back Up Your Sensitive Information; Mistakes in Cryptocurrency
Always back up both 2FA and wallet data.
If you lose access to your computer and haven’t backed up your private keys, seeds or passphrases, then you won’t be able to access your coins anymore.
Same for exchanges: you’ll be locked out of your accounts if you lost your phone and haven’t kept a safe copy of the 2FA keys.
Wallets and exchanges will often guide you through the process, so make sure to read and follow their instructions carefully.
For 2FA, I recommend you backup your keys so when you get a new phone, you can recover all of your accounts to log in. Do not forget to do this, as it will be a huge pain and time sink if you forget!
28. You Fall for Scams; Mistakes in Cryptocurrency
Be careful out there. There are scammers in the crypto space, and they become smarter over time.
While I know you are not a gullible old lady, here are some trusted ways to avoid scams:
• Double check the URLs you’re clicking on. A URL can be embedded in the text.
What if you click on a sensitive link – like a wallet – and end up on a different URL? If you don’t believe me, click on www.google.com and see what happens. You can check the URL embedded in a link by right-clicking on it, copying the URL address, and pasting the URL in a new tab. But DO NOT press enter.
• Triple check the domains you land on. You might see some surprises. For example, you may land on coiinbase.com instead of coinbase.com. And believe me, these websites are set to steal your money.
• Avoid ‘easy money’ opportunities. Each time you’re offered to get rich online, there is a hidden scam. This includes Ponzi schemes such as the famous
Bitconnect case. Remember: Great opportunities aren’t offered to you on a plate.
• Ask questions to Google and communities. Type [“Website” + Scams] or [“Website” + Review] on Google, and you should know soon enough.
29. You Don’t Find a Reliable Community to Learn With; Mistakes in Cryptocurrency
Online communities will be handy when you experience any difficulty in the cryptocurrency space.
Whether you struggle to use an exchange or have a question about the fundamental value of Bitcoin – or anything else, surrounding yourself with likeminded people is essential.
These communities can also provide you with a consistent flow of cryptocurrency sentiment to keep a pulse on the industry.
There are great Facebook groups, like Cryptocurrency Investing and Crypto Coin Trader. If you’re not on Facebook, then you can search on Reddit, BitcoinTalk, and Uptrennd.
30. You follow shills : Mistakes in Cryptocurrency
Shill is a common word for someone who is compensated or has a financial incentive to spread the good word about a coin, even if it is terrible.
I won’t name anyone in particular, but lots of influencers, bloggers, and YouTubers have been guilty of promoting horrible cryptocurrencies – sometimes even scams – because of their own, selfish intentions.
Whether they’ve been paid to review a cryptocurrency or have other incentives (they own a lot of coins, they know the owners, etc.), you will be the one paying the price if you follow their advice blindly.
Things To Avoid When Trading Cryptocurrency (Part 3/5) will be on What’s On In Bromley.
Mathilde Renaud
What’s On In Bromley.
