The emergence of cryptocurrencies has presented new investment opportunities to those seeking passive income. Crypto investment can guarantee consistent and stable earnings in the short and long term. In addition, investing in crypto presents an opportunity for investors to grow their funds through the currency’s appreciation.
Putting your money in crypto gives you a chance to enjoy most of the benefits associated with traditional banking while at the same time growing your investment.
Crypto trading can be carried out by any person provided they are knowledgeable and experienced in investing. New traders are particularly at increased risk of loss due to inexperience. With the little information they get online, they feel ready to venture into the crypto trade. In most cases, these beginners make mistakes that can cost them their funds.
Getting started with reliable platforms such as IXFI can help increase the chances of success and earn good returns from your investment.
Watch out for the following major mistakes that new traders make, leading to the loss of their investment.
#Using the Wrong Trading Strategy
Choosing the right strategy in crypto trading is the first step in ensuring success. Many strategies can be used to get into a trade, and the trader must be fully aware of when to use which method. Some methods are meant for short-term trading, while others are more effective for long-term investment.
Using the wrong strategy can lead to a bad trade decision that eventually results in losses. For example, short-term strategies such as scalping can be effective while carried out within minutes, and then the trade closes. However, when this strategy is used for long-term trading, it can lead to losses.
As a new trader, it may help if you pick the right strategy for different situations and stick to your strategy. Check out our article here on how to choose the trading style that suits you best.
#Investing more than you can afford to lose
Like other investment opportunities, investing in crypto has risks that traders must be aware of before making an investment decision. While it can generate good returns when done in the right way, it can also result in huge losses within a short period. Any trader must be aware of the associated risks before deciding to venture into the trade.
Some new traders may have aquired the misconception that they can invest safely in crypto without making any losses, mostly because of the false promises advertised to them. As a result, they are likely to be less cautious when getting into a trade that exposes them to big losses.
To minimize chances of losing in trade and maximize winning, a new trader needs to:
- Know their risk tolerance levels, enabling them to invest in what they can afford to lose
- be aware that a position can go against their analysis, and they may end up losing everything they have invested, especially when they take higher risks
At IXFI, we are fully aware of the risks involved in investing in crypto, and we put a big emphasys on financial education through series like Smartvestments and Crypto Fundamentals, detailing how to grow your portfolio safely. By reading these articles, new traders can better avoid making mistakes.
#Choosing the Wrong Trading Platform
The choice of the right trading platform is an important risk management strategy for crypto trading.
So what makes a crypto trading platform worth your time?
- Secure – A serious trade will look for a secure platform that safeguards their funds from bugs, hackers, or malicious insiders.
- User-Friendly – looks out at the functionality of their websites; a good platform should be easy to navigate, with few or no bugs, and of course, no unnecessary ads. Trading apps that are compatible with your mobile phones is also a plus.
- Fast and Reliable – It is 2022, and you definitely want a platform where you can place your trades and complete transactions 24/7 from any location, while also making use of advanced features.
- Technical Support – A good platform will have professionals who can offer solutions to any technical challenge you may encounter within the shortest time possible.
Your Friendly Crypto Exchange can provide all of these and more. The IXFI trading platform is your go-to place whether you are a new or experienced trader. The platform has been designed with the sole aim of making the crypto journey easy for users of all levels. You can register to start your own today.
Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.
