Avoid the common mistakes on the crypto exchange while trading
According to a financial advisor and CEO of Onramp Invest, a crypto investment platform for financial advisors, there is no one crypto exchange that is best for every user. Instead, he suggests evaluating your own crypto interests and finding an exchange that aligns with your goals. A cryptocurrency exchange is a website where you can buy and sell cryptocurrency at cryptocurrency prices. You can use exchanges to convert one crypto to another, such as Bitcoin to Litecoin, or to buy crypto with regular currency, such as the US dollar.
Exchanges display current market prices for the cryptocurrencies they provide. You can also use an exchange to convert cryptocurrencies back into US dollars or other currencies, which you can keep as cash in your account (if you want to trade back into crypto later) or withdraw to your regular bank account.
1. Purchasing solely for the sake of a low price
Low prices are not always indicative of a good deal. Prices are sometimes low for a reason! Keep an eye out for cryptocurrencies with declining user rates. Frequently, developers abandon a project, and it ceases to be properly updated, rendering the cryptocurrency insecure.
2. Giving in to deception
- Cloud multiplier swindles
Fraudsters may contact victims via email or text message with a "investment opportunity." They promise to give investors double or triple the amount they put into bitcoin if they send it to a specific digital wallet.
- Spoofing
Criminals can easily inflate or deflate the price of very small or unknown cryptocurrencies by creating fictitious buy or sell orders and sometimes sending the currencies' values skyrocketing by hundreds of percent at a time. When unwitting traders rush in to try to get a piece of the action, the criminals cancel the orders — which they were never going to fulfil in the first place — causing the price to crash in some cases.
- Viruses in wallet software
The best crypto advice will tell you to stick with well-known crypto wallets like Ledger, Trezor, Exodus, or MetaMask. Dodgy or unknown wallets on Google Play or the App Store can steal your cryptocurrency funds using malicious code.
3. Putting everything on the line
Some of the more dubious trading platforms advise you to make the most of your crypto currency price by betting as much as possible. This is a short cut to the poor house. Better crypto investment advice would be to limit your investment capital to a certain percentage — say, 5% — and to always keep an emergency cash fund that is never invested in the market.
4. Believe that cryptocurrency is "easy money"
Making money through trading any type of financial asset, whether stocks and shares, commodities like silver and gold, or cryptocurrency, is not easy. Anyone who claims otherwise is most likely attempting to dupe you into making crypto mistakes.
5. Losing or forgetting your crypto key
If you use a hardware wallet to store your cryptocurrency offline, forgetting your key is akin to losing the keys to a bank vault. All of your cryptos will be lost if you do not have your key.