5 Mistakes To Avoid When Participating In The Crypto Market

If anyone has been participating in the crypto market, there must be many valuable “lessons”. The lessons often come from mistakes in the investment process of each person. Especially, newcomers are “lucrative bait” of scammers, projects full of the smell of “shill” and countless other problems. The article will share the mistakes to avoid when entering this market.

 5 mistakes to avoid when investing in Crypto

Fomo/Fud psychology by project, price, trend

The first and most common mistake is FOMO (short for Fear Of Missing Out), a psychological syndrome of fear of missing out, often used in many markets such as stocks, forex, and Crypto.

Meanwhile, FUD stands for 3 words Fear, Uncertainty, and Doubt, alluding to fear, doubt, and uncertainty about lousy information being spread from unknown sources.

The more FOMO mistake, the higher the risk. In the crypto market, investors must think carefully before deciding to “put down money” on a particular project or coin. But to promote investment, emotional factors will affect people more.

A project in an intense growth phase, a coin “pump”, or a project that KOLs heavily fund are factors that influence the decision-making process of investors.

With an intense “flying” token attracting many traders, the FOMO mentality will turn investors’ assets into a liquidity generator for profit-taking of “fish”, also known as “discharge” in the industry. As a result, many investors lose money because they immediately buy at the peak price.

FOMO is not necessarily bad, but we should self-assess and select potential projects based on guaranteed evidence such as Backer, Investor, and core products… Don’t “invest in” when only witnessing an uptrend growth. It all needs a process, not just a temporary one.

Investment or speculation are both forms of profit-making, but effective investment depends on many factors, from objective to subjective. What to do should keep the mentality when acting, be consistent and think carefully before FOMO. Fomo is right when we know it well, follow the crowd, and don’t get carried away.

“All-in” when investing

Capital management is considered the second most important factor in investing, especially in the crypto market. Many people have made mistakes, and it is generally because they have not managed their finances well.

From the mentality of wanting to be quick – compact – fast, many people choose to invest all assets in just one time (also known as All-in). This will make them miss many opportunities if there is a risk that their total assets can be lost and even lose all of their assets.

Newbies will often have the mentality of “hit fast to win quickly”, so the investment is ineffective, leading to losses right from the start. In Crypto, quite a few traders went all-in long/short with all their capital hoping to get a quick account xx. As a result, many accounts were “burned”, and the total liquidation orders on exchanges were estimated from millions of dollars to billions of dollars.

To avoid this mistake, people must create a portfolio for themselves and adequately allocate capital. Splitting the money to DCA (Dollar-Cost Averaging) is a rational capital allocation investment strategy to reduce the impact of price fluctuations in the market. Good capital management will help people not miss many other future opportunities.

Take the market lightly: Making money in Crypto is easy!

Many people come to the market, even though they are just starting, with the mentality of a winner. Crypto is a Zero-Sum Game. In theory, the total winnings will equal the other players’ total losses, which means the loser’s money will be transferred to the winner’s pocket.

Nothing is easy with any finance, investing to make money has many potential risks. Giving your opinions is good, but the reality is sometimes not as imagined. There are many lessons when we are subjective. For the uptrend, the market is an easy opportunity to make money, but the market volatility is unpredictable, and the risk is very high.

Before we start, we need to understand how the market works. The essence of Crypto is a game of rules and players. The winner will have everything, which means the loser will “lose everything”. Therefore, everyone needs to think correctly about investing, determine a reasonable buy-sell point, and, more importantly, practice patience (profit/loss) in the right place.

Lack of investment knowledge

In Crypto, knowledge is not only information but also a “lifesaving” tool to help investors make money, maintain psychology, and find hidden gems… in the market. They were making this mistake in how to use a cryptocurrency wallet or register an account on CEX, and DEX electronic exchanges.

We encourage everyone before joining to learn how to use wallets, exchanges, and basic terminology before “diving up” into Crypto. Also, reading and viewing the materials will help us improve our knowledge awakening and expansion.

Subjective and scammed by a scammer

The development of Crypto, Blockchain is the profit potential for many individuals and investment funds. There is no denying the “fertility” in the market, but this is also a place full of scams for investors when they first join.

Along with the growth is an increasingly sophisticated scam, the primary purpose of scammers (scammers) is to target the assets of users/organizations/projects. Any security holes will be attacked if we are not vigilant, for example, revealing private sale/passphrase when using a non-custodial wallet or password when using a centralized exchange,…

People need to be alert and aware of scams with keywords such as promising huge profits, asking for private keys, impersonating admin and proactive messaging, a project team with a history of fraud, and a poor project website,…

Do not provide your personal information to anyone, even the project’s admin. In Crypto, specifically DeFi, decentralization comes to the fore like no one can control you (the user).

Conclusion

It is inevitable that mistakes will be made in the investment process, but hopefully, this article will provide some knowledge to everyone. There are many “sharks” out there waiting for the opportunity to make money from other “baby fish”, following the sharks or becoming the prey of the enemy is everyone’s choice, which will affect the property in the future. It is necessary to make the most informed choice when participating in investment and say no to emotions.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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