Why beginners fail in cryptocurrency trading
Why Most Beginners Fail in cryptocurrency trading?
First we have to understand trend of the market and then Do fundamental analysis before investing in any token or coin.
And then look up at the previous record of the coin/token and see whether the coin/token is long term or not. If you want 100% success then you should consult professional traders, analyst or an app like us about cryptocurrency trading.
Risk and reward
The risk-reward ratio measures a crypto trade’s potential profit in a market uptrend to its possible loss in case of a market downtrend. The possible loss from trade is its risk, whereas the trade’s potential profit is its reward.
Generally, a 1:3 or greater risk-reward ratio is usually favorable for crypto traders to enter meaningful trades. This 1:3 risk reward ratio implies that the trade will likely have three times the potential reward for every 1 unit of additional risk undertaken.
Avoid Crypto Trading with HIGH VOLUME
Volume totally depends on how much you can take risk. For example you have a 100 % fund and you have to invest 40%. See the market position and trend and then invest. If you are a beginner invest small amounts. If you see you are getting profit invest more and it is generally favourable that we should put stop loss at 5 %.we should not invest more than 40% of our funds
Dollar Cost Average
A brilliant trader always us dollar cost average also known as DCA. DCA means that you must always buy in parts. If you have $100 then buy a coin or token with $40 and if it goes down then invest more $30 while keep rest of the $30 in your wallet for investing this $30 when your coin or token goes further down. In this way your profit chances will be automatically high.
Do not sell in Panic
Never sell in panic because if market goes down it has to come up anyhow. So instead of panic selling, just hold your coin or token till the market goes high and during this downtrend use Dollar Cost Average as described above to get out of any loss. Always keep in mind that you are never in loss until you sell in cryptocurrency trading.