Never trade Bitcoin or any other crypto without a strategy.
By Guy Avtalyon
Yes, it is possible to lose money trading BTC and crypto. It is, at the same time, one of the prettiest ways to be rich or poor.
First of all, trading cryptocurrencies is not an easy task – it is a CHALLENGE and FIGHT!
That’s the point!
Frankly, you are not the only one who loses money right now. But remember like in a war: the Lost battle is not lost war.
It shouldn’t be the question of WHY people lose money in crypto trading (it’s almost the same in every trading), the challenge is how people manage it in general.
Crypto trading is one of the best “money-making” methods today. If done right you can’t lose money. If not it so easy to lose money trading BTC.
In order to avoid failure, Traders Paradise will introduce several reasons why people are losing money by trading crypto.
Is there a reason to get panic?
Well, actually there is no reason.
One of the biggest and most important tools that traders have is technical analysis.
But there are so many and plenty of ways to lose money! Trust me!
For example, you can use social media predictions. Or you follow someone in the hope that he/she knows what to do.
And there can be the first catch.
You can lose money if you can become a victim of fake news. Because naturally, marketing always goes through these channels to keep up with the current information highway traffic. It wouldn’t be a good idea to buy coins by following “Tips” given by ICO’s or people that are trying to sell their coins to increase the value of what they have.
Right? They’re trying to create a fake “hype” that can end up in disaster.
That’s why you should always do your own researches. Clear?
FOMO or “Fear of Missing Out” is something that most people are actually feeling today. The Bitcoin train left the station a long time ago leaving people with doubts which altcoin could be the next rocket star. When Bitcoin has soared up to heights that no one has ever dreamed, a lot of people were in awe and dismayed that they didn’t buy BTC earlier.
This sense of lost opportunity again triggers, always when a price of a coin goes up making people buy at the wrong time (the price is high, damn) with the fear of it not going back down.
Of course, you MUST have a strategy! Crypto trading is very severe. Before entering the crypto trading you have to be well prepared. Otherwise, you can lose money trading bitcoin. Entering into the space of crypto trading without having any strategy ready for use is just like putting a hand into the basket full of dangerous snakes.
You will not survive! You should buy some books about trading strategies.
“Hold on for dear life.” HODL, damn! Crypto trading platforms or websites have a feature known as “Stop Loss”. There you will be able to control the loss of your assets by setting a “safety net” that would stop your loss on time and not drag you down to limbo. Limbo is not a good place!
Leverage! Too much of it is bad.
Leverage can be devastating if not used properly. It is when a trader uses borrowed money to increase trading position beyond what such could from existing cash balance on the trading account. The broker allows leverage through margin trading and borrows missing funds
If you are trading with a 20:1 leverage you can earn $20 if the price of your trade goes up by $2.
But if your investment loses and it goes down $2 you also lose $20 instead of earning when the price goes down.
A leverage trade is always expressed as a ratio: for a 20:1 leverage, you will be able to buy $20 assets with only $1. Old trading saying is “Do not ever trade more than you can afford to lose!”
The most popular adage in the trading world refers to a making margin trading or the use of leverage to go beyond the line of trading more than you can afford.
Since you are already in debt the minute you took the leverage.
And now you have the right reason to invest some time in learning.
You don’t need a degree! All you need is to read and to make a decision or you will face all ways of successfully losing money in trading Bitcoin and crypto.