🙅🏻‍♂️How to avoid blunders in trading?

How to avoid common mistakes and be a successful beginner in crypto trading?

A crypto trader is one who both is well-educated in trading and has impressive practice. On a way from a beginner to a master, traders make similar mistakes that could be easily avoided.

🐹 All or nothing

Being excited and waiting for a jackpot new traders are ready to spend all their money and savings and even take a loan but they are mistaken. Never use your reserves and never take loans for trading and investing activities. Always use only those funds that you are ready to lose.

🐹 Money and risk management

Money management supposes you to distribute your funds and plan activity. If you spend all your money to buy cryptos and leave no room for maneuver such as to average your position after a price pullback or to buy other promising cryptocurrencies you loose.

Thoroughly analyze your risks, especially if you trade with leverage that is not recommended for beginners.

Always have reserves in case of emergencies like dropping courses. Moreover, with free funds, you can hedge your risks by opening opposite transactions in conditions of increased market volatility.

🐹 Diversification problem

Diversification is one of the fundamental rules of crypto trading. If you distribute the money among several cryptocurrencies losses from a fall in the price of one crypto asset can outweigh gains from the growth of other coins. Many beginners are willing to buy only one crypto asset and wait for near success without any diversification. Having only one asset in your portfolio leads you to increasing losses and missing out on potential profits on an uptrend.

The diversification rule says you need to have several coins in your portfolio. There are three concepts of diversification such as conservative, moderate and aggressive. Bitcoin dominates in the conservative risk profile with a share from 50% to 70%. A moderate profile is more balanced in terms of the ratio between risk and potential profit. The aggressive profile emphasizes more on promising altcoins and ICO-tokens, which could “shoot up” in the foreseeable future.

🐹 Lack of systematization

Chaotic trading can yield results but they are more of a casual nature. A trader must develop his own system and algorithm of behavior which he will adhere to in his activity. For this purpose, it is necessary to master fundamental and technical analysis, to test and analyze different trading strategies.

🐹 Emotions

Both beginners and masters are vulnerable to emotions, FOMO and FUD effects. Fear and greed sometimes lead them to make ridiculous decisions. That makes them hamsters, traders who follow their emotions in trading, they buy on on the highs and “drain” assets when they have already fallen heavily. Hamsters wait for the last moment, when emotions reach their limit and make losing trades in advance. Stay cool-headed and analyze the situation and the market sentiment.

MMPro hopes now you will avoid these mistakes and trade with a cold head.