5 mistakes to avoid when investing in crypto currencies

In the world of cryptocurrencies and trading, it is common to see new entrants make avoidable mistakes and lose their initial investment. Often, these errors are simply the consequence of a lack of hindsight in a new market. The purpose of this article is to give you some tips to avoid the most common mistakes.

We have already covered this subject in previous articles, especially during our series on how to start in cryptocurrencies. It is certainly one of the most important aspects and the cause of many losses. In the digital world, we are never over-protected against cyber-attacks and never completely safe from a hack. On the other hand, there are very simple methods which make it possible to protect its funds. It seems obvious, but having a complex password (16 characters with uppercase, lowercase and special characters) East essential. Too often newbies use simple passwords making it easy for anyone who wants to take over your account. It is also a good idea to change this password regularly. To go further, it is very strongly recommended to add a double authentication to your account. You can use Google Authenticator on your smartphone for double authentication (also called 2FA).

Track your investments! This point also seems obvious when presented, however, it is common to see investors putting money into cryptocurrencies (by buying Bitcoin for example) and then losing interest completely for a long period of time. Naturally, it is not necessary to carry out a daily follow-up, but when making an investment, it is important to keep abreast of developments in the latter on a fairly regular basis.

To properly manage the follow-up of your investment, we advise you, before the investment, to establish a strategy and set your objectives. In this way, you will have a more precise vision of what you expect from this investment. Having a specific goal and especially limits can help you manage your investment and avoid losing money. (ex: determine from which price you wish to sell).

In addition, establishing a good follow-up before the investment allows more rational decisions to be made. It’s rarely good to make decisions in the heat of the moment, rushing under market moves. Generally, it is in these situations that we make mistakes.

The cryptocurrency market is still young. There is a slew of very interesting investment opportunities in this market. Nevertheless, it should not be mistaken, in the world of investment, opportunity systematically rhymes with risk. Indeed, there is no investment offering high returns with zero risk. In general, the more risk you take, the more you can win, but this is quite logical, because the percentage chance of losing is greater.

Invest a few euros, a few hundred euros and you will become a millionaire, heading to California in your new Ferrari. Stop! Do not expect to become a millionaire without taking risk and investing a few euros, it does not exist.

The world of cryptocurrencies is booming and unfortunately, a good number of imposters take advantage of this hype to scam new entrants. As soon as the project seems too good to be true or that you are being sold mountains and wonders, it is better to move on. A serious person will always expose you to the risks associated with the investment and will never talk to you about guaranteed gains.

The Ponzi scheme is one of the most widely used systems in crypto scams. It is a mechanism based on an affiliation system (sponsorship) where the funds contributed by new users are used to reimburse the commissions paid by previous users. The term “network marketing” or MLM can also be used. (Beware, not all forms of MLM are scams, simply the MLM-Crypto mix rarely results in trustworthy reliable projects). The pyramid collapses when there are not enough new members to pay the old ones.

Imagine that to be paid, each person must invite 6 new users. In this case at the end of the 13th round of recruitment, the number of people necessary for the proper functioning of the pyramid would be greater than the population of the Earth.

The system is all the more unhealthy since most of the time, you take your loved ones on a very bad adventure. And when you realize this, the only way to get out of it and get back some of your bet is to make other people dive for you…

To avoid falling into the mesh of the type of project, all you need to do is get a minimum of information. Doing some research before any investment is important (press article, forum, etc.). If you have any doubts, that’s usually a bad sign.

Warning : Just because a project pays you doesn’t mean it’s not a scam. In the Ponzi pyramid system, you can make money, but it is always at the expense of another person that you get into this trap.

The universe of cryptocurrencies is absolutely fascinating, it is made up of many interesting projects with great potential. But it’s also a young universe, you have to be vigilant, always do your own research. Do not be lured by projects that sell dreams and promise exorbitant gains.

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