Here’s our new LATOKEN review, and we want to ask you several questions about crypto trading. Why do many crypto newbies have a run of bad luck? What rules should be followed to make crypto trading profitable? Let’s try to figure it out today.
Novice traders can make serious mistakes that ultimately lead to losses. So in today’s LATOKEN review, let’s try to find out what to do when trading cryptocurrency to minimize risks.
Following someone else’s ideas and strategies
Many beginners start trading cryptocurrency using the strategies and ideas of other traders. However, this is unlikely to lead to anything good. The fact is that the essence of traders’ work is to analyze the market, make their own forecasts, and search for confirmations.
If a trader is confident in the growth of an asset, it is logical to buy and hold. If the trader is sure that the asset will decline, it is necessary to sell and transfer to other instruments. It should be remembered that everyone can make mistakes, as well as have losses and profits.
Overconfidence in crypto trading
When trading, one cannot be too self-confident since the situation on the crypto market changes every minute or every second, and a trader must be prepared for these changes. Furthermore, cryptocurrency is a highly volatile asset, and the digital asset market is largely unregulated. Therefore, investors should be discreet and very careful. In our LATOKEN reviews, we always remind our users that when you are dealing with cryptocurrency, you should always be on your guard and do your own research. This is how you minimize all risks and do not become a victim of a crypto scam.
Too active crypto trading
Entering the cryptocurrency market, newbies try to catch every move and trade all promising coins. However, this can be a path to a quick burnout. Active crypto trading during the day (intraday trading) is suitable not for every trader. These specialists should be well versed in technical analysis, feel the market signals, and understand that crypto-assets can move contrary to traditional ideas about market mechanisms.
The fact is that with such an intensity, it is difficult for beginners to maintain the quality of transactions. That’s why the risks of going to pieces are very high.
It is more advisable for newbies to make deals not too often – at least once every couple of days or a week. On such a planning horizon, it is easier to predict since you can move, taking into account the general trend in the crypto market.
Technical analysis? It is not a guarantee
Technical analysis might give an idea of what is happening in the crypto market right now. But it does not include fundamental factors that can significantly affect the quotes. Technical analysis can help to make forecasts based on the previous dynamics.
For example, technical analysis does not provide predictions in a situation where mining is prohibited in China.
Technical indicators can work well in a stable market environment. However, traders should always consider the risk of a complete change in the situation due to any news.
At the end of May, the Bitcoin price per day decreased by more than a third. This happened after the Chinese authorities banned organizations from providing services for storing and managing crypto and called for a complete ban on mining. The situation was the same in early September. BTC fell by 16% per day after a total ban on cryptocurrency transactions in China.
Compensation for losses
After exiting a losing trade, traders may want to compensate for the loss by entering a new position, but this is often the wrong goal. Instead, novice traders should try to shut off emotions and work with a cool head.
The goal should be to get profitability: some deals can be negative, some for sure will be positive. The main and most important thing is that the overall balance should increase.
If the overall balance is decreasing, it is worth taking a break and conducting a thorough analysis of the trades to determine the reasons for the failure.
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About LATOKEN
- Ranked #2 worldwide in the startup tokens primary market with 220+ IEO’s since 2017.
- Has over 2 mln registered users, over 1 mln Android app installs.
- Is in the TOP 10 of CoinGecko rank by the amount of token pairs and coins listed.
- VCTV, a live streaming panel with high-profile industry leaders, produced over 500 shows to advise traders and investors how to navigate the crypto world with discussions, news updates, and interviews.
- Advisory Board includes former CFOs from JP Morgan and Paypal.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.
