While you can make the most of cryptocurrency without being an expert, crypto is definitely not something you master overnight.
The easiest way for new traders to minimize their losses and maximize their profits is to learn from the mistakes of others and get the lay-of-the-land before diving into investing. We have compiled a list of the most common beginner crypto mistakes to avoid if you’re new to the game and want to bypass some time-consuming and expensive mistakes.
- Not choosing the right crypto exchange platform
Before you begin trading, you need to choose a cryptocurrency exchange to sign up with. Unfortunately, this first step is one that many beginners rush into, and it can be very costly down-the-track. Some of the factors you need to consider in choosing the right crypto exchange platform are having a user-friendly system, diversity of cryptocurrencies available, low fee charges, platform security, and reliable customer support.
- Not knowing what a good investment looks like
In such a competitive marketplace, for crypto to succeed above all the others, it must possess a unique function or significantly improve on existing technology. A crypto’s ability to solve a problem in the world is what defines whether or not it will succeed in the long term.
Additionally, when evaluating a cryptocurrency, there are other factors to consider beyond just the price of the coin (and remember: cheaper does not always mean better!). By making sure a project is well-supported by trustworthy and reputable names, you’ll save yourself some expensive errors going in on coins that talk a big game but never actually make it off the ground.
- Believing everything you read
Not all advice is created equal, especially in the world of crypto. A common mistake beginners make is following tips and advice they see on social media from people they don’t know or have never heard of.
The Internet is rife with crypto trading advice, a lot of which is just false hype and, in some cases, blatant.
Major news sites also commonly release very negative and threatening news – however, keep in mind that a lot of these news articles and exaggerated headlines are intended for the sole purpose of generating clicks, controversies, and FUD (fear, uncertainty and doubt).
If you are going to take someone’s advice, make sure that they have some expertise and a decent following or reputation to back it up.
If you’re a crypto trader and want some free, personalized guidance from trained professionals, consider speaking to one of our gurus at Digital Surge. We’d be more than happy to help you figure out an investment strategy that works for you!
- Not diversifying your portfolio
Generally, having a blend of the largest, most stable cryptos along with some medium-sized to small cryptos is recommended.
An 80/20 blend of large-cap to mid to small-cap is an excellent rule to follow if you are new to crypto investing. This will also minimize any liquidity issues in your portfolio.
Following this rule will allow you to make sizable profits from any sudden surge in the small to mid-cap cryptos, whilst also having a large part of your investments in stabler coins.