How to avoid pitfalls in Bitcoin trading
Bitcoin transactions are irreversible, this compels you to be extra careful while making a purchase, a sell order or payment to others in crypto as even a minor mistake can cost you. Besides this, the volatility of the cryptocurrency market makes Bitcoin trading quiet risky but you can avoid some of these risks through better planning and informed decision making. Here are some of the pitfalls you should avoid as a trader.
- Never invest your emergency funds- Crypto investments are risky and investing your emergency funds into it is not advisable at all since losing that might leave you in a deep financial crisis.
- Never leave your coins with the exchange- Even the most highly reputed exchanges are vulnerable to cyber attacks. Thus, it is always better not to depend on any third party for securing your Bitcoins but to secure it in your personalised cryptocurrency wallet.
- Avoid buying coins with low liquidity- The value of the coin appreciates with its higher demand. Buying coins with low liquidity may result in locking your funds with the exchange in case there are no buyers for the crypto coins you have.
- Avoid Pump & Dump groups- There are some big investors who can manipulate the demand of the coins with smaller market cap. Buying such coins may be too risky as the price trend is artificially controlled to favour a particular entity.
