The Top 5 Mistakes of Beginner Crypto Traders 1

The Top 5 Mistakes of Beginner Crypto Traders

Trading
• Digitex
April 14, 2021

With an over $2 trillion size, the current cryptocurrency bull market provides great opportunities for many investors and traders.

However, as with other asset classes, crypto is not a get-rich-quick scheme in which you put your money to see over 1,000% returns a day after (it can happen, but it’s highly unlikely).

Instead, you have to research assets to pick the right ones, gather knowledge about the market, as well as create and implement a viable crypto trading strategy to succeed.

That said, many newbies have failed to achieve the above, causing them severe losses after pouring money into digital assets.

For that reason, we have collected the top 5 mistakes of beginner crypto traders and some tips to avoid them in this article.

1. Trading Without the Necessary Knowledge

It’s tempting to jump right into day trading crypto without having the necessary trading or market knowledge.

While you may achieve good returns at first, it’s the result of pure luck in most cases. Even worse, when your luck goes away, you will likely face serious losses.

For you to succeed in day trading crypto, you need at least a basic knowledge of cryptocurrencies, market mechanisms, as well as trading assets in general.

If you have acquired that, you will know how to use fundamental analysis, technical analysis, or the combination of the two to spot crypto trading signals and pick the right ones to make decent returns on your trades.

Fortunately, the digital asset industry has tons of guides, tutorials, and even full-fledged courses that you can use to learn crypto trading.

The Digitex Blog is an excellent starting point to read beginner-friendly articles on crypto trading; we highly recommend checking it out!

2. Lack of Crypto Trading Strategies

Even those who have extensive market knowledge often fail to develop their crypto trading strategies before jumping into a trade.

The lack of a decent plan will lead to impulsive trading, which can be best compared to visiting the supermarket hungry without a grocery shopping list and buying all the food you find there.

While both cases lead to spending significantly more money than you would have planned, impulsive decisions in trading can cause severe financial losses.

For that reason, you need a good crypto trading strategy, which includes strict rules to enter and exit trades, tactics to manage your risks, as well as the tools and indicators to research assets and find decent opportunities to trade.

3. Panic Selling

When you are trading cryptocurrencies – or basically any other asset class –, it’s hard to keep your emotions in control.

Greed, fear, hope, and excitement are some of those emotions that prevent traders from making the right decisions.

If you can’t control your emotions, you will likely face the issue of panic selling, in which traders or investors sell a cryptocurrency as soon as it experiences significant losses.

While it makes sense to cut your losses sometimes, you should remember that you will only lose money on a long trade after selling the asset.

If your crypto trading strategy is a great one, you will know when to enter and exit trades, and you won’t experience the panic that would make you sell your digital asset holdings when prices hit bottom.

4. Revenge Trading

One of the most common mistakes of beginner crypto traders is revenge trading, in which one loses funds in a trade and enters into a new, riskier position in an attempt to recover his losses.

In such a case, the trader takes too much risks while his decision is driven by frustration and fear. For these reasons, it’s very likely to lead to further, more significant losses.

Being disciplined, keeping your emotions in control, and leveraging a decent crypto trading strategy is an excellent way to overcome revenge trading.

5. Paying High Exchange Fees

A common misconception among beginner crypto traders is that you have a 50-50% chance to win or lose a trade.

However, in practice, it’s (almost) never true.

Since crypto exchanges impose fees on your trades right after entering a position, you will start trading crypto with a loss.

And things will get worse when you margin trade crypto – a 0.10% fee becomes 10% in case of a 100x leverage – or pick a service provider that features higher costs than average.

The lower the fees, the higher your chances for winning trades; you should remember that.

At Digitex, our top priority is to offer the best crypto trading experience to our traders. For that reason, we have completely eliminated fees, allowing all our users to have access to free crypto trading.

As a result, you can limit their risks and maximize your chances for winning trades while keeping 100% of the profit you make on the platform.

Start trading crypto on Digitex now!

April 14, 2021
Trading

The Top 5 Mistakes of Beginner Crypto Traders

Digitex
The Top 5 Mistakes of Beginner Crypto Traders 2

With an over $2 trillion size, the current cryptocurrency bull market provides great opportunities for many investors and traders.

However, as with other asset classes, crypto is not a get-rich-quick scheme in which you put your money to see over 1,000% returns a day after (it can happen, but it’s highly unlikely).

Instead, you have to research assets to pick the right ones, gather knowledge about the market, as well as create and implement a viable crypto trading strategy to succeed.

That said, many newbies have failed to achieve the above, causing them severe losses after pouring money into digital assets.

For that reason, we have collected the top 5 mistakes of beginner crypto traders and some tips to avoid them in this article.

1. Trading Without the Necessary Knowledge

It’s tempting to jump right into day trading crypto without having the necessary trading or market knowledge.

While you may achieve good returns at first, it’s the result of pure luck in most cases. Even worse, when your luck goes away, you will likely face serious losses.

For you to succeed in day trading crypto, you need at least a basic knowledge of cryptocurrencies, market mechanisms, as well as trading assets in general.

If you have acquired that, you will know how to use fundamental analysis, technical analysis, or the combination of the two to spot crypto trading signals and pick the right ones to make decent returns on your trades.

Fortunately, the digital asset industry has tons of guides, tutorials, and even full-fledged courses that you can use to learn crypto trading.

The Digitex Blog is an excellent starting point to read beginner-friendly articles on crypto trading; we highly recommend checking it out!

2. Lack of Crypto Trading Strategies

Even those who have extensive market knowledge often fail to develop their crypto trading strategies before jumping into a trade.

The lack of a decent plan will lead to impulsive trading, which can be best compared to visiting the supermarket hungry without a grocery shopping list and buying all the food you find there.

While both cases lead to spending significantly more money than you would have planned, impulsive decisions in trading can cause severe financial losses.

For that reason, you need a good crypto trading strategy, which includes strict rules to enter and exit trades, tactics to manage your risks, as well as the tools and indicators to research assets and find decent opportunities to trade.

3. Panic Selling

When you are trading cryptocurrencies – or basically any other asset class –, it’s hard to keep your emotions in control.

Greed, fear, hope, and excitement are some of those emotions that prevent traders from making the right decisions.

If you can’t control your emotions, you will likely face the issue of panic selling, in which traders or investors sell a cryptocurrency as soon as it experiences significant losses.

While it makes sense to cut your losses sometimes, you should remember that you will only lose money on a long trade after selling the asset.

If your crypto trading strategy is a great one, you will know when to enter and exit trades, and you won’t experience the panic that would make you sell your digital asset holdings when prices hit bottom.

4. Revenge Trading

One of the most common mistakes of beginner crypto traders is revenge trading, in which one loses funds in a trade and enters into a new, riskier position in an attempt to recover his losses.

In such a case, the trader takes too much risks while his decision is driven by frustration and fear. For these reasons, it’s very likely to lead to further, more significant losses.

Being disciplined, keeping your emotions in control, and leveraging a decent crypto trading strategy is an excellent way to overcome revenge trading.

5. Paying High Exchange Fees

A common misconception among beginner crypto traders is that you have a 50-50% chance to win or lose a trade.

However, in practice, it’s (almost) never true.

Since crypto exchanges impose fees on your trades right after entering a position, you will start trading crypto with a loss.

And things will get worse when you margin trade crypto – a 0.10% fee becomes 10% in case of a 100x leverage – or pick a service provider that features higher costs than average.

The lower the fees, the higher your chances for winning trades; you should remember that.

At Digitex, our top priority is to offer the best crypto trading experience to our traders. For that reason, we have completely eliminated fees, allowing all our users to have access to free crypto trading.

As a result, you can limit their risks and maximize your chances for winning trades while keeping 100% of the profit you make on the platform.

Start trading crypto on Digitex now!

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Trade

Expert Tips: Common Practices Before Entering a Trade

Trading
• Ali Martinez
March 28, 2021

Despite the popular belief that trading is easy, the truth of the matter is that it takes a lot of practice and know-how to become a successful trader. There is a widely known statistic that says that 90% of traders are not profitable. 

So, over time, 80% of those who enter into this profession lose money, 10% usually break even, and 10% percent are able to generate returns from the price action in the markets.

For this reason, Digitex is doing everything in its power to help traders around the world reach their financial goals. This time, we want to provide you with different practices that you can employ before entering a trade to minimize losses and maximize profits.

The Power of Knowledge

First and foremost, it is very important to have a clear picture of what you are getting into. In trading as any other profession, education is what separates those who are able to reach their goals from those who do not.

It is essential for traders to not only be aware of the developments around the market and the cryptocurrency of their choice but also focus on learning something new every day. Technical indicators can provide guidance regarding what the future may hold for a given digital asset, but on-chain metrics can help identify what the so-called “market makers” are doing.

With the vast amount of data that blockchain technology provides to investors, it is important to consider diving into these metrics before entering a trade.

Protect Your Capital

People are usually optimistic and tend to discourage the potential of adverse market conditions. But with the unpredictability of the cryptocurrency market, wild price movements can be triggered at any second. Now that the market is in the midst of an extremely bullish cycle, having capital to deploy is a must.

Before going long or short on any cryptocurrency, it is critical to assess the risks that are involved. Having a good idea of where to place your stop-loss order before even thinking about the profits, is a great way to stay afloat in such a volatile market.

As a rule of thumb, most retail investors risk no more than 2% of their investment capital on any single trade, and hedge fund managers usually risk less than this amount, according to Investopedia.

Keep Calm and Stick to Your Plan

The final and most important practice to have in mind before entering any trade is to stay relaxed and have a solid plan of action. If you were supposed to enter a trade at a certain price and you missed your entry point, don’t worry about it. A new opportunity will likely present itself in the near future.

Chasing trades is one of the best ways to put your capital at risk. Therefore, staying true to your trading plan and maintaining a solid risk management strategy will help you minimize your losses.

Remember that you don’t need to win every trade. Indeed, many traders, including 45-year trading veteran Peter Brandt, only win 50% to 60% of their trades. However, they make sure that their winning trades are bigger than what they lose by implementing stop-losses.

So before you enter into your next trade make sure to be aware of what is happening in the market, prioritize your stop-loss order over anything else, avoid trading when you’re not in the right mind frame, and keep calm.

Digitex’s zero-fee model introduces a unique opportunity to try out new scalping strategies on Bitcoin futures that wouldn’t be profitable on other exchanges. So if you’re ready to start making money on bitcoin futures whether the market goes up or down, sign up for our zero-fee trading platform now.

March 28, 2021
Trading

Expert Tips: Common Practices Before Entering a Trade

Ali Martinez
Trade

Despite the popular belief that trading is easy, the truth of the matter is that it takes a lot of practice and know-how to become a successful trader. There is a widely known statistic that says that 90% of traders are not profitable. 

So, over time, 80% of those who enter into this profession lose money, 10% usually break even, and 10% percent are able to generate returns from the price action in the markets.

For this reason, Digitex is doing everything in its power to help traders around the world reach their financial goals. This time, we want to provide you with different practices that you can employ before entering a trade to minimize losses and maximize profits.

The Power of Knowledge

First and foremost, it is very important to have a clear picture of what you are getting into. In trading as any other profession, education is what separates those who are able to reach their goals from those who do not.

It is essential for traders to not only be aware of the developments around the market and the cryptocurrency of their choice but also focus on learning something new every day. Technical indicators can provide guidance regarding what the future may hold for a given digital asset, but on-chain metrics can help identify what the so-called “market makers” are doing.

With the vast amount of data that blockchain technology provides to investors, it is important to consider diving into these metrics before entering a trade.

Protect Your Capital

People are usually optimistic and tend to discourage the potential of adverse market conditions. But with the unpredictability of the cryptocurrency market, wild price movements can be triggered at any second. Now that the market is in the midst of an extremely bullish cycle, having capital to deploy is a must.

Before going long or short on any cryptocurrency, it is critical to assess the risks that are involved. Having a good idea of where to place your stop-loss order before even thinking about the profits, is a great way to stay afloat in such a volatile market.

As a rule of thumb, most retail investors risk no more than 2% of their investment capital on any single trade, and hedge fund managers usually risk less than this amount, according to Investopedia.

Keep Calm and Stick to Your Plan

The final and most important practice to have in mind before entering any trade is to stay relaxed and have a solid plan of action. If you were supposed to enter a trade at a certain price and you missed your entry point, don’t worry about it. A new opportunity will likely present itself in the near future.

Chasing trades is one of the best ways to put your capital at risk. Therefore, staying true to your trading plan and maintaining a solid risk management strategy will help you minimize your losses.

Remember that you don’t need to win every trade. Indeed, many traders, including 45-year trading veteran Peter Brandt, only win 50% to 60% of their trades. However, they make sure that their winning trades are bigger than what they lose by implementing stop-losses.

So before you enter into your next trade make sure to be aware of what is happening in the market, prioritize your stop-loss order over anything else, avoid trading when you’re not in the right mind frame, and keep calm.

Digitex’s zero-fee model introduces a unique opportunity to try out new scalping strategies on Bitcoin futures that wouldn’t be profitable on other exchanges. So if you’re ready to start making money on bitcoin futures whether the market goes up or down, sign up for our zero-fee trading platform now.

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