There are probably very few people who haven’t heard the amazing life-changing stories about millions of dollars made with crypto. In the span of 10 years, some people did indeed manage to turn a couple of thousand dollars to hundreds of millions, via early adoption.
Many people however, made a huge amount of money by flipping altcoins and making more than a 100 investments a day. It seems great to leave your boring day job and become a crypto trader who gets rich really quick. Some attempt that and in the majority of cases, the outcome isn’t positive.
Being a trader in a modern market is hard, real hard. It’s so hard that the failure rate is up 95% and that’s only for the first few months. Most traders usually go broke within the first few months or leave a small sum which they acquired through trading and leave it to grow for the future.
Due to its volatility, the crypto market presents a huge gold mine for traders, but the volatility is also a double-edged sword as it’s without a doubt, one of the hardest markets to trade in.
The crypto market is open 24/7 for the entire world. This gives crypto traders a larger fatigue than normal and the FOMO factor (fear of missing out) is way bigger than normal. There’s no one in the world which can efficiently track a 24/7 global market, yet.
This is why rookie traders become addicted very quickly. Unfortunately, this puts a huge strain on the rookie trader which often ends up destroying both the trader’s finances and his personal life.
The biggest issue is that the crypto market seriously lacks fundamentals. If a trader purchases a stock, he could easily review the quarterly earnings, the company’s road map, the sales reports and endless other factors that would potentially lead to success.
The more important thing is that the companies trading on the stock exchange are regulated and thus transparent – in most cases, the trader knows what he buys.
When it comes to crypto investing however, the team of the project is completely irrelevant and technical analysis is the mostly used which is very hard for rookie traders.
Altcoins are almost never safe to trade and to find an opportunity could take a while. New traders often do not have the patience and/or experience to make use of such opportunities. Most new traders make the mistake to gauge the success of their trades in USD rather than realizing that if they parked their capital in bitcoin, it would have been far easier and more profitable.
Rookie traders have almost no chance to grab a huge opportunity
The market moves so quick that even successful crypto traders have shared countless stories about missing incredible opportunities while they were sleeping.
One of the biggest mistakes of rookie traders is to rely on leveraged trading. Leverage is a tool which could be incredibly profitable and devastating for traders. Entry barriers simply do not exist in crypto and inexperienced traders often burn instantly.
Most legacy markets do not offer the option of “getting rich quick”. The crypto market is extremely appealing to younger investors who want to skip the long road and be able to retire at 25. While it’s true that there are some people who made a fortune with cryptocurrencies, the majority of them were extremely lucky, not good.
Risk management seems to be very boring and young traders usually ignore the skill completely. This is unfortunately, one the most key skills to have, if you’re looking to become a successful investor, especially in the crypto market.
Understanding how to balance a portfolio and trade is far more important than entry and exit. Experience takes time to acquire and most rookie traders end up broke before they even begin to understand the concept of risk.
You can also check out:
The post Rookie Traders and Why Bitcoin Trading has a 95% Failure Rate appeared first on CoinStaker | Bitcoin News.