Panic selling, under-diversification of assets and misjudgment of the market: these are the biggest crypto trading mistakes.
“It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes. ” In German: “It is good to learn from your mistakes. It’s even better to learn from other people’s mistakes. ” This is what Warren Buffett once said, and he is one of the richest people on earth and one of the most successful investors in history. In terms of trading, it is certainly one that you shouldn’t write off immediately – even when it comes to crypto values.
If you try to mend your pocket money through clever trading or to make provisions for retirement, your own mistakes can not only be annoying, but also tear big tears in your wallet. A recently published study has now taken up this very topic and asked the 1,000 participants about the biggest mistakes in their crypto investor careers.
Panic selling, diversification and incomprehension
38.2 percent of the 1,000 crypto investors surveyed named panic selling as the biggest mistake. One thing is clear: the crypto market environment is one of the most volatile in the investment sector. Nowhere else are more assets with sometimes gigantic market capitalization vying for the favor of their investors in such a volatile manner than on the Krytpto market. It is quite possible that one or the other coin will lose 20 percent or more of its value overnight, even though it was one of the day’s winners the day before. Even die-hard traders are afraid – newbies often sell everything directly, at prices far beyond their entry-level markers. If the respective token breaks out again to the north a short time later, the desperation is great – any profits were not only missed, but a lot of money was lost.
Another mistake respondents made was under-diversifying their assets. What has always been true on the stock market, one or the other crypto investors seem not to admit – or want to admit: putting everything on one card is negligent. Bitcoin maximalism or not – a proven and far more risk-resistant strategy relies on distributions of 70/20/10, i.e. around 70 percent Bitcoin, 20 percent Ethereum and 10 percent in other Altcoins.
Learn from the mistakes
The third most common mistake the study participants made was that they misjudged the market and its processes. That it wasn’t just a brief setback, but the beginning of a bear market. Or the other way around: That it would stick with the one green candle, and not percentage price increases in the four-digit range would be possible.
After all, 12.5 percent saw their biggest mistake in a lost password – and thus in the loss of all of their assets on the respective wallet.
What remains to be said is that anyone who actively trades in the crypto market makes mistakes – sometimes sooner, sometimes later. It remains important to learn from them. To recognize the bear or bull market as such next time, to diversify the assets (at least a little) and at the same time not to sell everything in panic just because a red candle dares to appear in the portfolio. If you then pay attention to the safe storage of the wallet passwords, then you are already on the safe side.