Ask a question The crypto market is very appealing but also full of risks, especially for newcomers. Here are some common psychological traps and mistakes that beginners often make, along with easy-to-understand examples.
1. FOMO (Fear of Missing Out)
Many newcomers jump into crypto because they see the price of a coin rising quickly, such as Bitcoin soaring to 20,000 USD in 2017. They fear missing out on an opportunity and rush to buy, without fully understanding the coin. As a result, the price can drop quickly afterward, and they may lose money.
Example: You see your friends buying Dogecoin, and it’s increasing rapidly, so you hurry to buy in without researching, only to see the price fall sharply afterward.
2. Not Researching Properly
A big mistake is buying a coin without researching it thoroughly. There are thousands of coins in the market, but not all of them are trustworthy.
Example: You buy a coin just because someone told you it would rise in price, without checking the project's background and the team behind it.
3. Believing in Promises of Huge Profits
Newcomers often fall for promises of massive returns in a short time, like being invited to invest in an ICO (Initial Coin Offering), not realizing it could be a scam.
Example: An ICO promises you 200% profit in just a few weeks, but in reality, it could be a fraudulent project.
4. Investing Too Much in One Coin
Another mistake is putting all your money into a single coin, thinking it will “explode” in value. However, the crypto market is very volatile, and no one can predict price changes with certainty.
Example: You invest all your money in Bitcoin, and when its price drops from 60,000 USD to 30,000 USD, you lose a significant portion of your investment.
5. Not Managing Risk
The crypto market can grow exponentially but can also lose value just as quickly. If you don’t have a stop-loss plan or an exit strategy when prices fall, you might end up losing everything.
Example: When Bitcoin falls from 60,000 USD to 30,000 USD, you don’t know when to sell, leading to a big loss.
6. Relying Too Much on Tools and Advice from Others
Many beginners overly depend on automated trading tools or follow advice from others without doing their own research. Every investor has their own strategy, and you need to learn and master the market yourself.
Example: You follow a popular influencer's trading strategy without understanding it, and it doesn’t turn out as expected.
The crypto market can offer high returns but is also full of risks. To succeed, you need to research thoroughly, manage risk, and not let your emotions drive your investment decisions. Remember that patience and learning from mistakes are key to making smart investment decisions.
