Nov 28, 2019 11:20 UTC
Nov 28, 2019 at 11:20 UTC
Bitcoin Trading Mistakes: How Can You Avoid Them?
While the old adage is true: we learn from our mistakes when money is on the line, it’s always best to learn from others.
There are a number of common mistakes that get made when you’re new to trading. That fact shouldn’t deter you from trying to get more out of your money. As a new trader, it’s important to be prepared to make a few of them. However, most of the common mistakes made by bitcoin traders are easily avoidable, as long as you know about them.
A large majority of the problems that new traders run into are down to inexperience and user error. One of the best ways to keep you safe is to be aware of potential common pitfalls before you face them. Choosing a trading platform, like highly trusted https://bitvavo.com/en for example, designed to lend a helping hand through every step of the trading process is one way that newbs can gain a solid footing when dealing with bitcoin trading. Another is to do your homework and read this article.
Avoiding trading mistakes generally starts with avoiding user error. The most common problems that crypto traders are up against have to do with wallet security.
- Choose a secure wallet
If you’re flying solo or using a trading platform that doesn’t offer an online wallet feature, choose your wallet wisely. Do a bit of research on which type of wallet will suit your needs best. Make sure that you are using secure sites and always keep a close eye on any funds you have stored.
- Backup your wallet
Losing access to your wallet or hardware wallets getting damaged can be utterly devastating. To ensure that this won’t negatively affect your bitcoin balance, have an encrypted wallet backup at the ready. There are many online tutorials on how to do this and it’s a step you should definitely not skip.
- Update often
Keeping software, drivers, and operating systems up to date is wildly important for the safety and security of your bitcoins. If there’s a patch or a newer version of the software you are using, make sure that you download it as soon as it’s made available.
- Write down your personal key
If you lose, forget, or misplace your personal key for your wallet, any bitcoins you have are essentially lost. It’s next to impossible to access a wallet that you no longer have a personal key for, so make sure that you take note and store it in a secure location.
Have multiple types of storage. If you plan on holding a good amount of bitcoin, but you may not be needing it immediately, make sure that you separate out your funds. Keeping the lion’s share in an offline account. Keeping all of your money in exchanges or wallets that are directly linked to the internet set you up to get hacked.
- Cold storage
This is a type of storage that is not connected to the internet. These types of wallets and storage spaces are far more secure, but generally, cost money to buy the software. That being said, an $80 investment may just save you thousands.
- Hot Wallets
These wallets are the ones that are simple to set up, always connected to the internet, and often free to get. Hot wallets are easy to use on mobile devices and can transfer to almost any machine you’re using. However, they are far more susceptible to hackers, technical problems, and regulation.
For crypto traders who have spent many hours in the fiat game, it’s easy to fall into old patterns and less than useful habits. Cryptocurrency trading works much differently than that of most traditional exchanges.
- Read often
The more you know about bitcoin and how it works, the more likely you are to make good choices when it comes to trading. Read as much as you can and always stay engaged with the tech as well as the trends.
- Explore options
Don’t pin yourself down to just bitcoin. Even if that’s all you plan on trading with, it’s often beneficial to follow other cryptocurrencies and altcoins. The movement and valuation of altcoins often correlate with the price of bitcoin. Learn to read the relationship between the two and boost buyer confidence in bitcoin.
- Follow good advice
There are a number of bitcoin-centric news sites, blogs, YouTube channels, and social media feeds that are designed to keep traders up to date. Read as many as you can until you find advice that you are happy following. Try not to get all of your information from just one source, and follow often. There’s incredible advice out there, you just have to find it, and follow it.