10 Common Mistakes Traders Do in Crypto Bull Market
The post 10 Common Mistakes Traders Do in Crypto Bull Market appeared first on Coinpedia Fintech News
The cryptocurrency industry is poised for another bull run in 2024! One might feel a bit out of shape due to the crypto winters. However, Coinpedia’s report on how to avoid the biggest common mistakes in the crypto bull run of 2024. The crypto bull run is a period when there is a significant price increase in various cryptocurrencies.
It is driven by increased investor optimism, adoption, and other driving forces. For 2024, the confluence of the Bitcoin halving event and the Ethereum 2.0 upgrade paves the way for the bull run. It is our advice to be prepared ahead of time and avoid these ten common mistakes that most traders make in the crypto bull market!
- Emotional buying due to FOMO
Investors often feel pressured to jump into investments with haste as they witness a sharp price ascent. They fear that they might miss out on potential gains and ultimately go for impulsive decision-making! One needs to avoid the FOMO emotion while being in the cryptosphere. Research, pause, and buy, instead of going for hasty decisions.
- Overleveraging
Some might use excessive leverage or take too much debt to amplify the potential gains! While leveraging can maximize profits during a bull run, it also increases the risk of losses if the market turns upside down! We put overleveraging off the list while running in a bull market.
- No risk management
Risk management strategies like setting stop-loss orders or position sizing are crucial when trading in a bull market. Without proper risk management strategies, investors might expose themselves to losses if the market collapses.
- Chasing the hype
During a bull run, the hype around specific projects or coins can be extremely intense. Traders might make bad investment decisions based on rumors, social media trends, or celebrity endorsements. Therefore, thorough research plays a vital role!
- No exit strategy
Traders make the mistake of not planning their exit strategy. We advise all investors to keep their exit strategy handy. Anytime when the market hits its low, the plan might help. Also, it is better to stick to commitment and goals. Once they are achieved, it is better to exit rather than over-indulge.
- No diversification
Some traders make the mistake of concentrating all the funds into a single cryptocurrency or a handful of assets without diversifying their portfolio. It is always better to place your eggs into different baskets to earn the most out of them. Lack of diversification exposes them to high risks if an asset performs poorly.
- Not taking profits on intervals
Being overly optimistic during a bull run often leads to failures. It is important that we do step-by-step accumulation of profits. It is not okay to believe that the market will continue to rise indefinitely. Always take the profits at regular intervals.
- Running in the cattle race
Instead of conducting research on their own, traders are seen following the crowd blindly. They do not understand the basics of the assets they are choosing. This can lead to buying at inflated rates or panic selling when the market takes the downturn! Always follow your own instinct instead of running in the cattle race.
- Poor security measures
Traders often neglect the most important part of the entire process, that is, following stern security practices. It is very crucial to protect the crypto with strong passwords, keep private keys safe and store funds on insecure exchanges. Always put the assets in a risk-free zone where the security is on-point!
- Overbuying
Overbuying during a bull run is very common! People just get excited due to the hype and end up overbuying, without thinking much. We suggest you buy as much as your goal allows and never get too much into the trap of the bull run hype!
This report by Coinpedia has been compiled by studying authentic resources and analysing insights from the experts. It is going to be helpful if you wish to be a part of the upcoming bull run in 2024!
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