Ten biggest mistakes to avoid when starting with Crypto

Investing in cryptocurrencies carries inherent risks, and it's essential to approach it with a cautious and informed mindset. Educate yourself, seek advice from reputable sources, and consider your risk tolerance before diving into the world of crypto.

Starting with crypto can be exciting, but it's essential to be aware of potential pitfalls to avoid making costly mistakes. Here are ten of the biggest mistakes to steer clear of:

1 - Not having a Clear Plan:

*Lack of research: Not understanding the fundamentals of cryptocurrencies, blockchain technology, and the specific projects you're investing in can lead to poor decision-making.

a) Have you studied / learnt from reputable courses / investors long enough (at least 6 months) to understand well the market of Crypto in full detail?

b) Have you tried a Demo account ?

c) What is your current financial position ?

d) Never risk / invest more than you can afford to lose

e) Do not borrow money or use leverage if you do not have clear understanding and prior successful experience with them

f) What is your risk tolerance? :

* Aggressive (maximum return with maximum risk)

* Moderate (balancing high and low volatility investments)

* Conservative (risk-averse approach with little or no risk but lower return)

g) What strategy will you use? :

* Buy and Hold?

* Buy cheap and sell high?

* Trade with Fundamental, Technical and Sentiment Analysis Tools?

* Buy the rumor and sell the news? , etc.

FOMO (Fear of Missing Out): Making impulsive decisions based on fear of missing out on potential gains can lead to buying at the peak of a market bubble, resulting in significant losses.

2 - Pick up the wrong Crypto Exchange

a) Do a fully comprehensive research. Have a look to popular and well-established crypto websites like CoinGecko or CoinMarketCap.

b) Verify the exchange is legit and supervised by the appropriate authority in your country, including insurance and audits

c) Is your currency accepted there?

d) What the fees and charges are?

e) Check with your bank how they transfer or receive Crypto into your account (is there any conditions, restrictions, limits, etc?)

f) What are the Exchange' functionalities?

3 -Not doing always your own research and overlooking scams and phishing attempts:

a) Neglecting security: Ignoring security measures like using strong passwords, enabling two-factor authentication, and storing crypto assets in secure wallets exposes you to the risk of hacks and theft.

b) Not diversifying your portfolio: Putting all your funds into a single cryptocurrency or a few assets increases risk. Diversification can help protect your investments from sudden market shifts.

c) Ignoring the emotional aspect: Cryptocurrency markets can be emotionally charged, leading to impulsive decisions based on fear or greed. Developing a rational and disciplined approach is crucial for long-term success.

4 - Taking too much risk or leverage :

a) Set up Stop Loss and Take Profit levels, usually a 2:1 Reward to Risk Ratio is acceptable.

b) Avoid high leverage

c) Overtrading: Frequent buying and selling of cryptocurrencies based on short-term market fluctuations can lead to transaction fees, reduced gains, and increased risk of losses.

d) Investing more than you can afford to lose: Crypto markets are highly volatile, and investing more money than you can afford to lose may lead to financial distress if the market takes a downturn.

5 - Trust in online wallets and do not Get a Hardware Crypto Wallet(secure and offline), like Trezor or Ledger Wallets

6 - Keep seed words, access codes or passwords online : Make sure they are kept in an organized physical notebook or reliable diary and always on a secure place

7 - Not knowing what are the Tax implications in your country:

Failing to understand the tax implications of your crypto transactions can lead to legal issues and unexpected financial burdens.

8 - Share your Crypto life and information with friends, colleagues or others

9 - Not Avoiding Scams

a) Falling for scams, fake airdrops, or phishing emails can lead to the loss of your cryptocurrencies or personal information.

b) Chasing hype and rumors: Relying on rumors and unsubstantiated information can lead to poor investment choices and a lack of due diligence.

10 - Not Selecting an independent, reliable and private email for all your Crypto dealings, for example, Protonmail

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Disclaimer : All the content is not financial advise but general information for education purposes. Always do your own research.