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Since cryptocurrency has captured the attention of people worldwide, billions have bought and invested in cryptocurrency. Forex trading involves the speculative buying and selling of currencies in quest of profit.
But it doesn’t come without it’s risks.
It's incredibly easy to get carried away by the sensationalism of news headlines and the fear of missing out.
To help combat that, we've compiled a list of some of the most typical crypto blunders.
1. Purchasing just on the basis of a low price
Just because a cryptocurrency has a really low price doesn’t necessarily imply a that it’s a good deal. Prices are sometimes cheap for a reason, so keep an eye out for coins with dwindling user numbers.
Developers frequently quit a project leaving it to die a slow and quiet death, while rendering the coin vulnerable.
2. Going for broke
Some of the more dubious trading platforms advise you to bet as much as possible in order to maximise your profits. This is a fast track to the poorhouse.
Better crypto investment advice would be to limit your investment money to a particular percentage — say, 5% — and to have an emergency cash reserve in an easy-to-access savings account that is never involved in the market.
3. Believing that cryptocurrency is "easy money"
Making money through any financial transaction - whether stocks, options, bonds, forex or crypto - is not simple.
There will always be little wrinkles and nuances that can trip you up.
Anyone who claims otherwise is most likely attempting to take advantage of you.
4. Losing track of your crypto key
If you keep your cryptocurrency in a wallet (whether online or offline in cold storage) loosing your key is like losing the keys to a bank vault.
Whatever you do, make sure you save your keys properly. Because if you lose that key...you’ll never be able to get your cryptocurrency back.
5. Falling for con artists
There are many different cryptocurrency scams that happen online.
Remember, if it’s too good to be true, it probably is.
So if someone contacts you offering you the chance to double or triple your crypto through an investment, it’s probably not solid advice.
These people might be trying to scam you or lure you into a pump and dump scheme.
The Pump and Dump
This is a typical scam where criminals may quickly inflate or deflate the price of extremely tiny or unknown coins, sending their value surging.
They do this by holding a significant amount of a cryptocurrency and then promoting it to others.
Then as others rush in to buy and the price skyrockets, they sell and make a profit.
Once this happens, the price of the crypto often crashes, leaving the investors holding the bag.
Another common scam involves virus-infected wallet software.
Virus-infected wallet software
The best piece of advice to keep in mind here is to stick with well-known crypto wallets like Ledger, Trezor, Exodus, or MetaMask.
Little known wallets found on Google Play or the App Store might use dodgy programming to steal your crypto assets.
It's impossible to distinguish what's real and what's not with so many cryptocurrencies on the market. That is why it is best to check independent and unbiased websites like alts to ensure that the cryptocurrency is legit.
This leaves the door wide open for criminals to steal your identity and frequently your hard-earned money if you buy in bogus coins.
So whatever you do, make sure that you do your own research before investing in any sort of cryptocurrency. And if you want to learn how to trade cryptocurrency, visit our blog here for some great resources.
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