As much as cryptocurrency is a profitable investment, you need to understand the rules to avoid costly mistakes. There is a right time and season to invest. Cryptocurrencies are highly volatile, and it may be frustrating when you do not strategize properly.
Do you ever wonder why big men buy Ripple and make some profit while other investors seem to keep losing? The main factor responsible for great loss is a lack of knowledge about the market system.
Hence, delve into this article till the end to identify common mistakes and how to avoid them.
Shallow Research or Study
Do proper research, as you are currently doing now. Make sure you understand the basics, including Crypto terms, before going in-depth.
After knowing the basic terms, move on to understanding blockchain technology. How does mining affect the value of a cryptocurrency? Understand the terms and conditions applied to transaction processes.
By doing so, you do not ingest every information that comes your way. You discern if it has any influence on your investment. Today, big investors use a lack of knowledge as a tool to confuse young and new investors.
Update yourself and make sure your source of information is reliable.
Incorrect Choice of Coin
Often, investors are confused between choosing the right coins and where to put their money. Avoid the rush to invest in cheap crypto as enticing as it may appear. A good choice is to buy Ripple.
Ripples allow you to diversify your portfolio fast. A cheap coin does not mean high returns. Hence, the supply rate influences Coins’ value. The higher the supply, the lower a coin’s worth of value.
Minimize your risk by choosing 3-7 Crypto coins. Diversification is a wise approach to earning profit regardless of the market situation. That is, it is almost impossible for your seven investments to go down at once.
Not Considering Loss and Profit Margin Wisely
To say there is no loss in cryptocurrency would be total deceit. Before you buy Ripple, draw out an investment plan and calculate the market demand and supply. Layout your plan so that you can follow it as you should. A plan will let you know when to sell and which investor to sell to.
Setting a goal and target will prevent you from being greedy with your investment. Hence, try to sell some coins to earn your profits.
Do not be too stubborn when the market moves drastically. How long can you hodl your coins? Hence, be prepared to cut some losses. A 10% loss is fair enough for a Crypto trader, as you could make multiple of it at the bullish run.
Buying Cryptocurrency at Too High Rate and Not HODLing Enough Coins
Buying Ripple at a too high price is often not favorable. There is a tendency you may not sell at a profitable price unless you allow it to grow for a while. In this case, hodling comes into the picture.
It is preferable to hodl money that you may not need for an emergency reason. Hodling is recommendable for a long-term purpose. Likewise, investing your life savings into cryptocurrencies is not a wise decision. By doing so, you make rash decisions and would want to get back your money as soon as possible.
If you are not sure of the market profit yet, it is preferable to hodl your coin. However, for maximum gain, you may have to wait up to a year.
Unsecured Wallet and Trading Platform
A major threat to cryptocurrency today is insecurity. As insecurity keeps increasing, we encourage people to buy Ripple and trade on a trusted platform like Bitvavo. Make sure to choose a trading platform with maximum security. Also, the platform should implement the latest Crypto technology. You can be sure the program is updated to the latest version, keeping viruses or malware out of the way.
A method of ensuring security is to use the 2FA. It prevents your wallet from running on any website, using a 2-factor authentication means, also known as 2FA.
With 2FA, you cannot log in your details anyhow without confirming it is from trusted ownership. You can get this done by downloading Google Authenticator and syncing it with your wallet. Since your 2FA password changes every 30 seconds, a cybercriminal cannot access your wallet without using your phone.
Conclusion
Having mentioned the common mistakes associated with cryptocurrencies, avoid them when investing. You can back up your online information or sensitive data. If you have another account, make sure to add it as a trusted third party. A lot of scams are out there, and taking precautions will prevent you from falling victim.
If you still do not know what to do, understand the above tips very well, and take a step to buy Ripple.