Bitcoin trading has become quite popular nowadays, but it is not everyone's cup of tea. There are several complexities involved in it; you need great knowledge and excellent skills to become an expert trader. You can visit platform like this trading Bot if you want to start with bitcoin trading. Some of the common mistakes made by novice bitcoin traders that you need to avoid are listed below.
Not Having A Trading Journal
It is one of the most common mistakes made by novice traders, and if you want to become a successful Bitcoin trader, you need to avoid it at all costs. A trading journal is a type of notebook in which you record all your trades and other vital aspects such as the purpose of trade, mistakes, goals, etc. It is crucial as well as useful as it allows you to know which trades brought you more significant profits and what were the reasons behind the losses that you suffered. If you are serious about bitcoin trading, you must maintain a trading journal as it will keep you aware of your mistakes and will ensure that you don't repeat them in the future.
Profits and losses are inseparable parts of bitcoin trading, but the important thing is to learn more about your losses and mistakes and use them to earn bigger profits in the future. The trading journal helps you to do it as it allows you to have a look at your previous trades and know the mistakes that you made. So, by maintaining a trading journal, you can improve your trading skills, knowledge and become a better bitcoin trader.
Revenge Trading
There is no bitcoin trader in the world who has not suffered any loss. Loss is a part of bitcoin trading, but everyone doesn't have enough muscle to accept the losses. It is the primary reason that some traders start trading for revenge when they face some continuous losses. So, you must avoid revenge trading as it will only make things worse for you when you make any decision in anger or frustration; most of the time, it will be wrong and will kick back. Revenge trading is one of the biggest mistakes made by traders as they accept to take higher risks in a try to recover their previous losses, which is a foolish thing to do.
You need to keep your mind calm and learn to accept wins as well as losses. You cannot win every time as there will be some bad trades that will bring you losses, but you need to accept them calmly, learn from your mistake and move on instead of getting frustrated and focusing on revenge trading. If you maintain a proper balance between the risks and rewards, you will be able to keep your portfolio always in profit.
Keep your emotions in check with your Bitcoin transactions. Being emotional is not a wise decision as a BTC cryptocurrency investor. Leave your impatience and frustration at the door.
Paying Massive Brokerage Charges
There are several bitcoin trading platforms, but all of them charge some fees from the traders for trading bitcoins. The trading platforms have varying trading charges, as some of them charge low fees, whereas some of them charge fewer fees. Some traders make a mistake by picking a platform with high brokerage fees. The higher brokerage fees you will pay, the fewer profits you will earn. So, to avoid such a mistake, you must choose a broker or bitcoin exchange that has a higher trading volume but charge low fees. It will minimize your cost of trading and will maximize your profits. Paying higher brokerage fees means that you are giving a massive portion of our profit which is obviously a foolish thing to do.
Poor Risk Management
Risk management is the most important aspect of bitcoin trading, but most traders don't focus on it. You cannot avoid risks while bitcoin trading, but you can minimize them by using some risk management tools such as Stop loss. It is a helpful tool, but most traders don't use it, which is the primary reason that makes them face huge losses. The Bitcoin market is highly unpredictable and volatile, so if you want to be on the safe side and earn good profits, you must use stop losses. It allows you to sell the investment at the right time and protects you from facing a significant loss. You must use stop loss in every trade as it will help you avoid a common trading mistake.
