Cryptocurrencies are on the crest of the wave and generally represent a novelty for most Forex, CFD, or other instrument traders. In this article, I propose a list of mistakes to avoid if you decide to start trading cryptocurrencies.
You should also use the right tools for this kind of trade. A perfect example is BestChange, which you can use to convert satoshi to usd, Bitcoin, and multiple currencies. The following are common beginner mistakes to avoid when trading cryptocurrencies.
Investing the Funds You Need
Invest in cryptocurrencies only funds that you are willing to lose without regrets, tears, or emotions. This trading is, in fact, very risky (even if, at first glance, it seems to you that cryptocurrencies do nothing but increase in value).
Communicating the Private Address of Your Wallet
When a wallet is created, two addresses will be communicated to you: a public key and a private key. NEVER disclose the private key! With this key, anyone could access your account and steal all cryptocurrencies. As for the public key, there are no problems. It is used to access the account exclusively as a visitor or to transfer funds to it.
Losing Your Funds Following a Transfer Error
Yes, it is possible! For example, if you transfer Bitcoins to a NAVcoin wallet, you will lose your entire investment in the blockchain. Contacting your broker’s customer support or filing a fraud report will do no good. You are solely responsible for cryptocurrency transfers, and you cannot make the slightest mistake.
Reminder: transfers of specific cryptocurrencies (e.g., Transfer problem for Ethers) are carried out in the form of a “smart contract”; Unfortunately, not all sites accept these tools. Be well informed before making a transfer from one wallet to another.
Not Protecting Your “wallet” or Its Access on the Exchange Platform
Always secure your wallet with a “two-factor authentification.” Unless you want to log into your account to liquidate some positions and realize that all cryptocurrencies have disappeared.
Keeping Bitcoin or Ethereum When Reselling an Altcoin
For some investors, it is too long and complicated (in their opinion) to convert the amount of their investment into a specific currency when they resell an altcoin. As a result, when reselling an altcoin, they hold positions in Bitcoin or Ethereum. The problem is that Bitcoin continues to go on a roller coaster. The capital gain obtained following the resale of an altcoin can quickly turn into a loss due to the simple fact of having kept the funds in Bitcoin.
NB: Up until now, these investors have done well, as Bitcoin has only been going up. The gains on an altcoin have therefore turned into even higher capital gains in Bitcoin.
In summary: when you collect the profit or loss after an altcoin resale, do not keep the positions in Ethereum or Bitcoin. Move them to the website/intermediary/broker that allows you to convert their value into the currency you prefer.
Believing That Cryptocurrencies Will Always Continue to Rise
Forget it! I prefer to be frank. Nobody knows for sure what happens to these cryptocurrencies. Therefore, be cautious; learn how to collect capital gains from time to time and convert them into regular currency on your current account.
The same goes for ICOs: it is wrong to believe that all the quotations of the new cryptocurrencies on the stock exchange allow you to always multiply your investment by 10 or 100. Sooner or later, some ICOs will fail.
Failure to Diversify Your Portfolio
Cryptocurrency trading is risky. As with all investments, buying a single product does not allow you to diversify your risk. So remember to diversify your cryptocurrency investments.