Thursday, April 26, 2018

Bitcoin Trading For Beginners: 7 Deadly Mistakes You Are Making

With its price dipping and rising by as much as $1000 in just a matter of minutes, it’s hard to not dive into Bitcoin trading.

After all, if careful, one can cut a decent profit margin by buying and selling at the right time during high volatility period.

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Bitcoin Trading For Beginners - Avoid These Mistakes

Sadly, things are easier said than done. Bitcoin trading is indeed risky. No wonder, experts advise that if you aren’t well-versed with the overall techniques of trading, you are better off investing for a long term.

Even we recommend that you should invest with a long-term view. Just buy Bitcoin when you think the price is low and then sit back, hodl and relax. The price will rise—and so will your profit.

But, at times, when the price is jumping up and down quickly and you think there is some opportunity to trade you should definitely jump on the scene and get your hands dirty.

You buy low, sell big… or sell low, buy lower…or buy high, sell higher…

But here’s a word of caution. It’s not that easy. There’s a big room for making mistakes. And the moment you make mistake, you can end up losing big money.

So it is essential you move ahead with great caution, fool-proof strategy, and good technical analysis knowledge.

Bitcoin Trading for Beginners: 7 Mistakes To Avoid

To help you start with…

Here are 5 deadly mistakes you should avoid in Bitcoin trading:

1. Not doing own research

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Have you done your research - Bitcoin Trading for Beginners

Don’t go to one forum or on social media platforms, listen to what few individuals are saying and then make a trading decision.

You must do a thorough research before making any move. Read charts. Identify resistant zones and support zones to understand the current price.

Learn to read trend lines on Candlestick chart to know when the price will go down and when up.


If all of these sounds a tad complex then the least you can do is gather around the news from multiple sources and then analyze yourself which sources are more reliable and definite. (Make sure the news resources are trustworthy though.)

NEVER listen to one person or source. Listen to everyone and then make your own decision by looking at the current price movement.

2. Spending all your money in one purchase

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Don't spend all your money in a single purchase - Bitcoin trading for beginners

This is a BIG mistake. Even when you have found the right entry point, you think the price has bottomed out and the Bull Run is only a matter of time now, don’t spend all your money in one go.

Because predicting Bitcoin market is impossible. What if after you have spent all the money, price falls further? You would go into a complete loss with no more money at hand to leverage this low price.

In the same way, if price continues going up, you can spend the money you have in hand, in small chunks, and make a decent profit, instead of spending all at once.

Remember, trading is not just about making big money. It’s also about minimizing risks.

3. Panic Buying and Panic Selling

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Do You Panic Sell Bitcoin - Bitcoin Trading for beginners

This is the single most common mistake among the beginners. When they don’t know how market functions and how price moves – and they have invested money that they cannot afford to lose – they always end up panic selling.

Just when they see the price falling even a bit, the majority of them end up selling their Bitcoin even when it means selling at loss.

They just want to save whatever money they can, knowing less, the price regularly moves up and down (corrections). And at times, the down is even bigger due to some sudden news. But at the end, it always will come back to normal—back on track to climb higher.

Similarly, when newbies see Bitcoin price rising, they panic buy, spending all their money in one go without doing any research. They hope that price will keep on increasing. But this doesn’t always turn up well. The price can go down anytime.

(Of course, panic buying doesn’t hurt in the long run. Because the price will always rise at the end. But you do miss out opportunities to make more money from trading.)

So, avoid panic buying and panic selling. Have a great deal of patience to NOT TO ACT. Don’t get carried away in the mix of trends. Take your time to understand everything before making any important decision.

4. Not setting stop-loss and take-profit positions

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Do you have take-profit stop-loss positions - Bitcoin trading for Beginners

Different traders have different thresholds for risk-taking. After a point, it might not be feasible for you to take the loss. Likewise, after you have got the amount of profit that you had plan for, it might not be a very good idea to continue and risk the fall of price.

To counter both the situations, you must set stop-loss and take-profit positions. Meaning, you must know at what point you should exit the trade when you’re losing money and when you have made enough profit.

This move helps you minimize the risk involved without compromising in your financial goals.

5. Trading with emotions

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Do you trade emotionally - Bitcoin trading for beginners

Never trade with emotions. It’s a fundamental rule of trading in any instrument, be it Bitcoin or stock.

Keep all your emotions at bay and make decisions logically. Don’t get too attached to your holding. Understand that big Bitcoin price movement is quite common. Some days are bad, some are good. Always rely on your logic and analysis when making buying and selling decision. Never go “I feel like…”

More often than not, emotional trading will bring you loss or stop you from making more profits.

6. Becoming too greedy

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Are you being too greedy - Bitcoin trading for beginners

It’s too common. When the price is going up, instead of exiting at the right time after we have made a good profit, we continue with the flow, hoping to make more profits.

Never be too greedy. Always know when to take out your profit, exit the game and enjoy the show. Remember, when the price is moving up too fast too soon, a correction is always coming from behind.

So it is always a good decision to make an exit before the correction, dip comes. When you’re acting greedy, not only are you risking the current profits, you’re also depriving yourself of the opportunities to make more money when the price goes down.

So stop acting greedily. Always have an exit plan.

7. Letting small losses take control of you

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Do you feel too sad about small losses - Bitcoin trading for beginners

In Bitcoin trading, it’s very likely that you’re going to face losses—unless, of course, you’re an expert.

Sometimes the loss will be small, other time it would big. If you let these setbacks take hold of you, you could easily end up losing all your invested money.

Revenge trend is quite common. When you have lost money, you would want to get it back. So you invest more, trade more, without thinking anything analytically. All you want is to get your lost money back. You start treating this thing like a gamble. Needless to say, this never works. And you end up losing more.

When trading Bitcoins, you always have the chance to bounce back from small losses. But this is only possible if you’re acting sensibly.

If you let your small losses take control over your decision-making ability, you will keep getting yourself deep in the quicksand, never recovering for higher profit.

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These are 7 very common but deadly mistakes new Bitcoin traders often make.

If you’re planning to start with Bitcoin trading, make sure you’re fully aware of such critical errors and that you know how to avoid them.

Get things correct and you can enjoy big rewards from smartly buying and selling (and then buying again) Bitcoin. 

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Here are few FAQ on Bitcoin Trading.

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Bitcoin Trading FAQ

Is Bitcoin trading illegal in India?

Answer: NO.

Read: Is Bitcoin Ban in India

Is Bitcoin Trading 24/7?

Answer: YES.

Is Bitcoin Trading Safe?

Answer: If you’re asking this from a legal perspective, then yes it is safe. And if you’re talking from a financial perspective – whether your invested money is safe or not – just remember, any kind of investment, be it in cryptocurrency or the stock market, is filled with market risks. In this game, you must have the appetite to take on this risk to make more money.

Also: What If Bitcoin Becomes Illegal

How Bitcoin Trading Works in India?

Answer: Just like how it works in the entire world. You pick a nice Bitcoin exchange and then start buying and selling the Bitcoin. The basic rule is— buy low, sell high.

Which Bitcoin trading platform to choose?

Answer: Go with only the top Indian Bitcoin exchanges.

Read: Where to Buy Bitcoin- Top 15 Bitcoin Exchange in India

When Bitcoin trading started in India?

Answer: Just when Bitcoin exchanges came into existence. But again, does it really matter?!

Also Read: Bitcoin Frequently Asked Questions with Answers

If you need more help, subscribe to Bitcoin India Wiki, a leading Bitcoin India Blog. (Click to subscribe)

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