The cryptocurrencies like Bitcoins, Ethereum, Litecoins, and other altcoin are digital ledgers with monetary value. Like shares or other stocks and fiat currencies, they experience lows and highs or fluctuations. However, due to the decentralization nature of the virtual currencies, they are highly volatile. A little speculation in their market can instill fear on potential investors resulting in a significant drop in their value.
The same way a positive commendation can increase the value. A good example of this effect is the Bitcoin value which rose unimaginably in 2017 and started experiencing a drop during the first months of 2018. As such, cryptocurrency trading is like a game. Meaning, you must learn how to play safe to stay ahead of the game and avoid making losses. Here are some of the mistakes you need to avoid while trading through Canadian cryptocurrency exchanges:
• Falling to conduct the cause of the drop in value
Panic is one of the reasons why most people make losses while trading with Bitcoins. When a rumor arises targeting a particular virtual coin, investors start selling them fearing to make further losses. However, most of this crowd does not take time to assess or find out the cause of the value drop. Instead, the aim is to dish out their investments even if the price is below the cost they spent in acquiring these altcoins.
Rather than joining the bandwagon of these investors, you should always make an informed decision before concluding to sell out your digital currencies. A Critical assessment of the cause of the drop in value will help you to come up with a decision that will enable you to take an action that you will not regret in the future.
• Considering past failures as bad lucks
Like in any game, cryptocurrency trading involves designing of winning techniques and strategies. Poor strategies will always lead to failure. Instead of admitting to this fact, most investors say they were unlucky when they make losses when selling Bitcoins and other altcoins.
In a game, losing means, you need to change your strategy by understanding its cause and improving on the next move. The same case applies here. You need to realize that a loss was a product of a weak tactic rather than bad luck. Hence, you should learn from such a fail and take a new turn next time. Otherwise, failing will become a perennial issue in your digital currency trading.
• Ignoring your trading strategy
The crypto market is becoming attractive due to the profitability potential. In this regard, while you develop a plan to trade Ethereum, you may be tempted to switch to Bitcoins when you notice their price is rising. By making such a move, you venture into a trade with the wrong strategy. Do you think you will make a profit or succeed? That is only possible in your dreams or imaginations. As such, you should always stick the right trading strategy to avoid failing or making losses.
• Lacking independence in trading decisions
Certainly, you have peers taking part in cryptocurrency trading. Also, you share ideas and trading tips. Despite this, one of the mistakes you can make is to let them make your trading decisions. Here is where you trade when your peers tell you to do so and abstain when they are speculative or sense a loss on value.
As such, you lack the independence of making a trading decision. While their opinions may help you to avoid losses at some time, they may be a source of regret on other instances. For this reason, you should own your cryptocurrency trade by making independent decisions regardless of their views.