Give sincere advice to retail investors in the cryptocurrency market. The following are the 8 most common mistakes made by retail investors. Be sure to read carefully, it will surely enlighten you.
1. Too much diversification. A person's energy is limited; it's impossible to keep track of too many cryptocurrencies. Generally, hold 3-5 types of coins if your investment is under 1 million.
2. Too much concentration. The market segments must be diversified. Opportunities in the cryptocurrency market always rotate. Usually, select quality leading coins from 3-5 segments.
3. Excessive self-centrism. Remember, the market is always right. Learn to respect the craziness and cruelty of the cryptocurrency market. Study diligently and keep improving.
4. Lack of patience. This is a common problem among many retail investors. They always like to go all-in and never leave room in their positions to wait for the right opportunity to enter. They can't stand seeing others profit. If someone else's coin rises, they become anxious. Patience is essential; the speed of rotation in the cryptocurrency market is faster, and opportunities are always present.
5. Indecisiveness. When the market starts to move, they always hesitate, thinking too much, and miss out on doubling their investment. When trading cryptocurrencies, be decisive once you identify a good opportunity. If you're wrong, exit promptly.
6. Not setting stop losses. They always think that every cryptocurrency they buy will make money. Such good fortune is rare. The cryptocurrency market fluctuates rapidly; if you're wrong, you must acknowledge it. Timely stop-losses are key to preserving your capital.
7. Not following the big funds. Observe the intentions of the market makers closely. Don’t panic and sell at the floor price just because the price drops. Big funds often conduct a final washout before a significant rise to shake out retail investors.
8. Thinking that the seven mistakes above are far from themselves.
