Ian Mausner: The 5 Deadly New Cryptocurrency Sins – Learn from other traders’ mistakes.
Ian Mausner

Ian Mausner: The 5 Deadly New Cryptocurrency Sins – Learn from other traders’ mistakes.

Today the cryptocurrency investor community is growing rapidly. There are thousands of new investors into cryptocurrencies that have never traded before or have just had small amounts of success says Ian Mausner. These ‘noobs’ are flooding into trading with hopes for large gains, but many of these traders don’t know what they’re doing and will lose all their money.

I’ve seen it happen first-hand, and I’m sure you have too. New traders that have just bought into bitcoin or another cryptocurrency are finding themselves getting emotional when their trades don’t go the way they planned.

They’re not experienced enough to know how to keep their emotions out of trading, so they lose all their money because of silly mistakes. What’s worse is these new traders are celebrating their losses as if it’s a huge win for them because they still own 90%+ of their original investment. Sorry to break it to you buddy, but that is still a loss.

This post is meant for those people who haven’t had success in trading yet and need some guidance on what NOT to do (trust me… there’s plenty) so you can start making money in trading cryptocurrencies.

If you’re experienced enough to know all of this, then ignore this post because it’s not aimed at you. If you are new to trading or have had only marginal success, read on!

Here are five deadly sins that will kill your cryptocurrency portfolio if you don’t fix them now:   

Sin #1 – Not Using Stop-Losses

One of the biggest mistakes newer traders make is not using stop-losses when they trade. A stop-loss order allows a trader to set a predetermined level an asset price must reach before triggering a market sell and closing their position (so they lose their money). Without stop losses, there’s no way for profitable traders to guarantee they won’t lose money, or more importantly – to guarantee that one trade doesn’t wipe out all their previous gains from other trades.

Many people who are new to cryptocurrency trading don’t understand the importance of stopping losses and ignore their gut instincts to use them explains Ian Mausner. There’s nothing worse than seeing your favorite coin pump by 10% then dump right back down because you didn’t set a stop-loss order! If you don’t use stop losses when you trade you need to re-evaluate what kind of trader you want to be… because losing money isn’t fun at all.

Sin #2 – Not Having a Trading Plan before Every Trade

A lot of traders don’t have any sort of plan before entering every single trade. They just react to price action and trade-off emotion. This is a bad plan, and one that will cost you money over time so doesn’t do it.

Before every single trade, you need to have a set of rules in place for when to enter the market – at what price, how long you’re willing to hold before selling and a mental stop loss that’s outside your entry point (to prevent losing all your gains from a bad trade)

Writing down these rules will make them more concrete in your mind which makes them easier to follow when actual trading occurs. Without having some sort of plan map out in front of you. You’ll find yourself getting emotional when it comes time to make trades. You can avoid this by having preset rules for every situation.

Sin #3 – Not Learning Technical Analysis (TA)

Technical analysis (TA) is another one of the keys to successful cryptocurrency trading. TA will show you where price has been, where it is right now, and where it’s likely to go in the future based on past patterns (and emotions). Understanding some basic TA can help you immensely when deciding what price to set your stop-loss at or whether or not a coin might moon after the next big announcement.

  Using an app like Coinigy will allow you to easily chart out technical indicators like moving averages, RSI levels, MACD lines, Bollinger Bands, and more… all of which are essential for understanding how to trade cryptocurrencies effectively.

Sin #4 – Over-Trading

One of the most common mistakes new traders make is over-trading. They see a coin pumping and jump in with both feet trying to take advantage of the situation by buying, then selling every little swing that follows. Doing this repeatedly will result in a major loss for you due to the transaction costs on the exchanges… not to mention you might get caught up in a flash crash or some other crazy price swing!

The best way to avoid over-trading is to set rules for you when it comes time to buy, sell or hold. You should never be buying/selling more than 5% of your portfolio at one time and always use a stop-loss (you did read

Sin #1, right?). Over-trading is a rookie mistake that will constantly burn you… so do yourself a favor and follow your pre-planned rules religiously says Ian Mausner.

Sin #5 – Not Diversifying Your Portfolio

One of the biggest problems new traders have when it comes to cryptocurrency is not diversifying their portfolio enough. You should never put all your eggs in one basket and you definitely shouldn’t be investing more than 5% of what you’re willing to lose on any given trade. This rule also applies to the number of coins/tokens you’re trading at one time as well (see sin #3).

Conclusion:

Cryptocurrency trading is a very emotional and risky endeavor. There’s no doubt about it, which is why you need to make sure you aren’t making any of the mistakes listed above – because they’ll keep you from having fun and potentially losing money too says Ian Mausner. By using stop-loss orders before every trade, developing a sound trading plan and learning the basics of TA (technical analysis) you will be well on your way to trading success!

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