Some people think that they will get rich quickly simply by trading cryptocurrencies. That's the typical moon-boy attitude that does not often meet reality.
Especially novice traders are not trading in a responsible way. The bitter truth is that you can not only make a lot of money with crypto but you can also lose a lot of money, if not all of it. There are some seductive temptations out there that can simply ruin your portfolio. For this reason, I have decided to write this post.
One of the great things about cryptocurrencies is that really anyone can participate in this free market, even the most inexperienced trader.
The problem on the other hand is that the cryptocurrency markets are highly irrational, so the market movements are totally out of your control. Markets can go up and down or simply move sideways.
As you can not control the movements of the market, there is only one thing that you can control and these are your own trading habits.
It is not possible to male profit with every single trade. So the Golden rule of cryptocurrency trading (and investing) is:
Do not trade with money that you can not afford to lose.
This is the Golden Rule that you should always keep in mind. Furthermore, there are some other areas that are defining responsible trading as well.
Do Your Own Research
Hoping to make quick money, while not understanding cryptocurrencies at all is a really bad idea! Please, before you trade cryptocurrencies, learn as much as possible about them. Please make sure to learn everything you need to know about cryptocurrencies.
In the end, you alone are responsible for your own investment decisions and no one else. That's why it is so important that you always do your own research ("DYOR"). Let me explain it like this: When you read just one article or when you watch one single video on Youtube, then you haven`t done your own research. In this case, the person who has written that post or the person who has made that Youtube video has done the research for you. This means that you are simply adopting the DYOR from others.
So doing your own research actually means reading as much as possible. You need to have as much information as possible from different resources. If you have done this you have finished your own research.
First, you need to LEARN and then you can remove the "L".
Now let's be honest. The cryptocurrency space is evolving damn fast, so there is always something new to learn. For this reason, you should continuously keep on learning and educating yourself. Otherwise, you may be left behind.
Then you should also practice self-discipline which means in other words: Be cool when trading crypt, don't FOMO, and do not sell in panic!
Be cool! 😎
The problem especially with FOMO is that your investment decisions are based upon emotion instead of logic and reasoning. It can often lead to a situation where trades are made for an asset that is overpriced, incurring much greater risks of financial losses.
Practicing self-discipline in trading also means avoiding habits that can be unhealthy leading to negative consequences. This is the case when someone gets addicted to trading like a gambler who uses every last cent for trading. Also trading 24/7 and barely getting any sleep is an unhealthy trading habit. If you recognize this then it is time to cool off before you lose all of your hard-earned Satoshis.
Be Honest To Yourself
When it comes to these unhealthy trading habits, it is extremely important to be honest with yourself. This also means that you should know when it's time to stop, and when to take a break.
For example, you are NOT honest to yourself when you have lost with trading but still keep on trading hoping that you can recoup your losses if you just keep on trading. This is the typical behavior of someone who is addicted to gambling. A responsible and serious trader does not trade like this because he always knows when to stop.
As a responsible trader, you should always keep yourself in check. Make yourself a trading strategy that you can follow and always ensure that you have procedures in place to avoid such a compulsive trading disorder.
Some Exchanges Support Responsible Trading
Finally, you can use an exchange that supports responsible trading by offering you the right tools to avoid unhealthy trading habits.
Binance, for example, has embedded its products in a complete risk management system. Binance offers its users the necessary means and tools to:
Prevent trading addiction and compulsive trading disorders by setting trading limits and self-exclusion tools.
Guarantee data privacy and security by adding security tools designed with privacy in mind and compliant with regulatory requirements.
Deliver a secure trading environment to users by integrating cyber-security monitoring capabilities.
My Final Conclusion
It is possible to get rich quickly by trading cryptocurrencies but it is also very risky and most people, especially novice traders are falling into the same traps over and over again. Some even develop an unhealthy compulsive trading disorder which is comparable to someone addicted to gambling.
Take responsibility for your trading decisions. Be a responsible and serious trader.
Finally, I hope I could provide you with some useful information about trading with responsibility.
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