What New Traders Often Miss When Entering the Fast World of Crypto Trading
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By PAGE Editor
Trading already tends to be an activity fraught with emotional ups and downs that come from the quite normal swings in whatever commodities or securities are being traded. However, crypto trading adds an additional layer of stress that comes from the potential to both acquire more money than you might have ever expected to own in your life, and the possibility of losing everything and more (if you choose to leverage your trades).
These swings and roundabouts will always be involved with trading of any sort, but if you’re willing to learn and add a little patience into the mix, you can dramatically reduce the negatives while boosting the upsides. This can be achieved by knowing what you’re getting into before you commit to remortgaging your home or taking out the sort of margin loan that dwarfs your current net worth. In this post, we’re going to explore what new traders tend to miss when entering the world of crypto trading so that they can understand the risks and do their best to avoid them before getting in too deep.
Misunderstanding The Nature Of Crypto Markets
For those looking from the outside in, it’s easy to get taken away on a sea of beautiful words, often parroted by the numerous TikTok and YouTube finance bro stars who will espouse the ease of becoming a millionaire overnight. While there are obviously a few individuals who happened to have won big on a few trades, these are very much the exception to the rule, and for most of you reading this, we can say with a very high certainty that you will not be one of those stories. For many, the first hurdle is a poor selection of a brokerage to use for their various trades. Selecting the wrong platform can seriously derail any plans you might have for turning what, for many, begins as a hobby into something more stable and full-time.
Brokerage selection involves numerous steps that must be followed carefully to ensure that you spend your time signing up for one that aligns with your style of trading and is established enough to have real customers, support staff, and tools to assist you as needed. You can see from the registration for Zoomex page that there is plenty of information informing you of what to expect, as well as a live chat feature to discuss any issues that you may have before committing. Outside of your section of the platform, many newcomers will have an unrealistic expectation of how this game is played and what to expect.
Lack Of Awareness About Market Cycles
Most markets move in cycles. This is true for almost any commodity, security, and financial instrument. It’s just the nature of how things work in relation to geopolitical events, the news, and what people are interested in. The crypto market is not different, and failing to understand these cycles will leave you at a huge disadvantage.
Volatility Misconceptions
Any seasoned crypto trading veteran will happily share with you the rollercoaster that you’re about to enter. In many ways, it is the unpredictability and huge swings that can make trading crypto more lucrative than other options, but it can also cause huge amounts of stress and anguish if you’re unprepared for just how violent the market cycles can be. A great case in point is seeing how Bitcoin has risen to new highs over the past several months, only to retreat to similar levels it was on before the boom. If you played this swing correctly, then you’re likely sitting pretty, but for those who failed to read the signs and stuck with their BTC out of a sense that they want to invest rather than trade, you probably either lost a significant amount or just about broke even.
The Illusion Of “Easy Money” And Leverage
If you are coming into this activity with an idea that you can quadruple your earnings by taking out leverage, you are both correct while simultaneously grossly misinformed. Yes, it’s true that by taking out leverage, you can more rapidly increase your earnings, but if you’re unable to afford your losses, you are going to be in for a really nasty surprise when the platform that you took out leverage with comes knocking. This isn’t to scare you away from utilizing leverage, but you need to have an intimate understanding of what might go wrong if your trades don’t work out the way you anticipated.
After reading this, you may be put off from trading altogether. However, this certainly wasn’t the intention. Instead, this post is meant to inform you of the numerous risks involved with the activity, so that you go into it with your eyes wide open.
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