Recently, the market has warmed up, and many new friends have started paying attention to crypto assets. But don’t rush to go all in! As an old player who has experienced bull and bear cycles, I’ve summarized 5 of the most common misconceptions for beginners to help you avoid detours and navigate market fluctuations more steadily.
❌ Misconception 1: FOMO chasing the rise, becoming a 'high position buyer'
📌 Case: In 2021, a certain meme coin surged 100 times, countless people jumped in, and the price dropped by 90%; many have yet to recover.
💡 Suggestion:
- Set a '24-hour cooling-off period' to avoid impulsive entry.
- Remember: the market always has opportunities, but the principal only comes once.
❌ Misconception 2: All in on a single asset, risk out of control
📌 Data: According to statistics, from 2020 to 2023, over 80% of altcoins ultimately went to zero, while mainstream assets like BTC and ETH continued to rise.
💡 Suggestion:
- Adopt the '532 configuration method': 50% mainstream coins (BTC/ETH) + 30% potential tracks (Layer2, AI, Depin, etc.) + 20% high-risk exploration.
- Diversify investments to avoid significant losses from a single project failure.
❌ Misconception 3: Ignoring asset security, improper management of private keys
📌 Lesson: In 2022, a certain CEX collapsed, and user assets were unable to be withdrawn; in 2023, a certain whale lost millions due to private key leakage.
💡 Suggestion:
- Use hardware wallets (like Ledger/Trezor) for large assets.
- Save mnemonic phrases offline, never screenshot or upload to the cloud.
- Use CEX for small transactions, large assets must be self-custodied.
❌ Misconception 4: Blindly using leverage, accelerating losses
📌 Reality: In March 2024, the market experienced severe fluctuations, with a liquidation rate of over 90% for high-leverage players.
💡 Suggestion:
- Beginners should stay away from contracts; spot trading is the way to go.
- If you must use leverage, keep it within 2x and set strict stop losses.
- Remember: slow is fast, stability leads to victory.
❌ Misconception 5: Emotional trading, being led by the market
📌 Psychological Effect:
- FOMO chasing highs when prices rise, panic selling when prices fall—this is the core reason for most retail investors' losses.
💡 Suggestion:
- Make a trading plan (when to buy, when to sell) and strictly execute it.
- Look less at short-term candlesticks and focus more on long-term trends.
- Invest with spare money to avoid imbalance in mindset.
🌟 Ultimate suggestion
1️⃣ Invest with spare money, without affecting your life
2️⃣ Hold BTC/ETH for the long term, participate cautiously in short-term speculation
3️⃣ Continuous learning and improving cognition is the best investment