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

Security
We've already covered this topic in previous articles, including our series on how to get started in crypto-currency. It is certainly one of the most important aspects and the cause of many losses. In the digital world, we are never too protected against cyber attacks and never totally safe from a hack. There are, however, very simple methods of protecting one's funds. It seems obvious, but having a complex password (16 characters with upper, lower case and special characters) is essential. All too often novices 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 strongly advised to add a double authentication to your account. You can use Google authenticator on your smartphone for dual authentication (also called 2FA).

The Portfolio Management
Follow your investments! This point also seems obvious when you present it, yet it is common to see investors investing money in cryptosystems and then losing interest for a long period of time. Of course, it is not necessary to follow up on a daily basis, but when making an investment, it is important to keep up to date with developments on a fairly regular basis.

In order to properly manage the monitoring of your investment, we advise you, prior to 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 the investment. Having a precise goal and above all limits can help you manage your investment and avoid losing money. (e.g.: determine at what price you want to sell).

In addition, establishing a good follow-up before the investment allows you to make more rational decisions. It is rarely a good idea to make decisions in the heat of the moment, rushing under market movements. Usually, it is in these situations that mistakes are made.

Opportunity = risk
The cryptomoney market is still young. There is a flood of very interesting investment opportunities in this market. Nevertheless, one 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. Generally speaking, the more risk you take, the more you can win, but this is quite logical, because the percentage chance of losing is greater.

Don't be naive
Invest a few euros, a few hundred euros and you will become a millionaire, heading for California in your new Ferrari. Halt! Don't expect to become a millionaire without taking risks and by investing a few euros, it doesn't exist.

The world of cryptomoney is booming and unfortunately, a lot of impostors take advantage of this hype to rip off new entrants. Whenever the project seems too good to be true or when you are being sold a lot of goodies, 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.

Ponzi schemes
The Ponzi scheme is one of the most widely used systems in cryptos scams. It is a mechanism based on an affiliation (sponsorship) system where the funds brought by new users are used to refund the commissions paid by previous users. The term "network marketing" or MLM can also be used. (Beware, not all forms of MLM are scams, just the MLM-Crypto mix rarely yields trustworthy projects). The pyramid collapses when there aren't enough new members to pay the old ones.

Let's imagine that to be paid, each person has to invite 6 new users. In this case, at the end of the 13th round of recruitment, the number of people needed for the pyramid to function properly would be greater than the population of the Earth.

The system is all the more unhealthy since most of the time, you're taking your loved ones on a very bad adventure. And when you realize it, the only way to get out of it and get back some of your stake is to make other people dive into it.

Let's imagine that in order to be paid, each person has to invite 6 new users. In this case, at the end of the 13th round of recruitment, the number of people needed for the pyramid to function properly would be greater than the population of the Earth.

The system is all the more unhealthy since most of the time, you're taking your loved ones on a very bad adventure. And when you realize it, the only way to get out of it and get back part of your stake is to make other people plunge in your place...

To avoid falling into project type meshes, just ask for a minimum amount of information. Doing some research before any investment is important (press article, forum, ...). If you have a doubt, it is generally already a bad sign.

Warning: It is not because a project pays you that it is not a scam. In the Ponzi scheme, you can earn money, but it is always to the detriment of another person that you get into this trap.