Top 10 hidden dangers that every novice should know before holding an encrypted asset

Since its inception in 2009, the price of Bitcoin has gone from scratch, from a few cents to a high of $20,000. The astonishing increase has made many early investors earn a lot of money, and it has attracted thousands of latecomers to come and pick up.

Under the influence of slogans such as “To Da Moon” and “one coin and one villa”, many “takers” completely lost their senses and forgot the advice of “investing at risk, entering the market to be cautious”, in FOMO (fear of missing) psychology Driven by the brain, rushed into the cryptocurrency market. With the arrival of the bear market, these investors were “study” by the market.

As an industry that is still in the early stages of development and far from mature in many aspects, the cryptocurrency market is indeed full of opportunities, but the investment risks that accompany it are not smaller or even worse than other investment markets. If you blindly enter the cryptocurrency market, the final outcome is likely to be "coming out, mixing sooner or later."

Today, we look at what pitfalls you need to know before holding cryptocurrencies and what pitfalls to avoid.

Hidden danger 1: Unwilling to study the market by yourself

Before entering the cryptocurrency market for investment, the first hidden danger you need to pay attention to is the unwillingness to study the market yourself. Admittedly, it is not wrong to listen to some expert trading advice during trading, but as a newcomer who is keen to make huge profits, you need to study the market yourself, know when to trade, and when not to trade.

In fact, the risk of the cryptocurrency market is very large. Because the price of cryptocurrency fluctuates greatly, just as a small group of people become multi-millionaires overnight, a large number of people lose all their funds in an instant.

In the cryptocurrency market, if you only listen to expert advice and don't think about it yourself, you are likely to lose a lot of money; but if you listen to expert advice and are willing to study and research yourself, you will make Better investment decisions.

Hidden danger 2: trading decisions are controlled by emotions

The second hidden danger you need to pay attention to before entering the cryptocurrency market is that trading decisions are controlled by your own emotions. Experts in the foreign exchange market have proven that emotional investment in the investment will eventually ruin your entire investment.

The cryptocurrency market is volatile and emotionally inevitable, but you need to be careful not to let emotions dominate or influence your investment decisions, especially if you want to make a major investment decision.

Hidden Danger 3: Anxious to buy "cheap but not market-proven" altcoin

The eagerness to buy a "cheap but not market-proven" altcoin is the third hidden danger you need to pay attention to.

When many newcomers are exposed to cryptocurrencies, they will feel that “bitcoin is too expensive” and turn to some unknown and very cheap altcoins seen on regular channels such as WeChat group, circle of friends, Weibo, and media. Without a deep understanding, he began to rush to buy, and finally fell into a "harvest" end.

The founder of Ethereum V God once said that 90% of the blockchain projects will be zero. Many projects are very good at marketing, they know how to hype, how to package Token into the kind you want to invest, and entice you to hook. Therefore, when you decide to invest in a certain Token, as a newcomer to the transaction, you must first do your best to do your homework and study the related projects carefully.

Hidden Danger 4: FOMO (Fear of Missing) Psychology

▲Source: hellobtc.com

The fourth hidden danger you need to pay attention to before entering the cryptocurrency market is FOMO (fear of missing) psychology.

Since the price of cryptocurrencies such as Bitcoin and Ethereum has soared in the bull market in 2017, many investors are very afraid that they will miss the bonus of cryptocurrency. Just as people have emotions, FOMO (fear of missing) psychology is hard to avoid completely. But as a result-oriented investor, you can overcome this FOMO (fear of missing) mentality and prevent it from controlling or affecting your investment decisions.

Hidden Danger 5: Stud, All In All your funds

Stud, All in All your money is the fifth hidden danger to be aware of when entering the cryptocurrency market. It is very dangerous to put all the eggs in one basket. In addition, it is more important not to borrow money in order to invest in cryptocurrency.

The cryptocurrency market is not a creation machine for wealth, and investment failure is always a majority. Just because I heard that someone earned millions overnight, it can't be the reason you put all your money into it or borrow money. The cryptocurrency market is full of speculation and uncertainty. Like “making millions in one night” is just a survivor bias. In fact, most people are losing money, which is very similar to other investment markets.

Therefore, even if you want to enter the cryptocurrency market, you should only use a portion of the funds that you can withstand and will not affect your life even if you lose all of them.

Hidden danger 6: I believe that all the information you have come into contact with

I believe that all the information you are exposed to is the sixth hidden danger that needs to be paid attention to when entering the cryptocurrency market.

With the popularity of the mobile Internet and the rise of the media, anyone can easily access a variety of information through their mobile phones. As an investor, the first challenge you face is to select which news media information is reliable and worth reading in many media news. You need to remember that more than half of the news reports you see every day have no real value, most of them are hype and attract your attention, which is why the current "Title Party" article is flooding. .

Therefore, you need to be very careful about the source of these news, don't accept it all, and don't trust all the information you are exposed to. Do a detailed investigation before making any investment decisions.

Hidden 7: Be attached to a Token and put all in

Persevering in a Token and investing in it is the seventh hidden danger to be aware of when entering the cryptocurrency market.

In fact, you can have your own optimistic portfolio, but as a business-minded investor, you shouldn't be too attached to a particular Token. If you are too persistent, you are likely to put all your money into it. Once the project fails, you can only return.

In addition, if you are too attached to a particular Token, you may also miss some “potential stocks”. Although the proportion of such “potential stocks” is small, for example, the Ethereum in 2015 and 2016 is a lot of bitcoin enthusiasts. I missed it.

Hidden Danger 8: Open trading operations without in-depth analysis

Before entering the cryptocurrency market for investment, the eighth hidden danger you need to pay attention to is to start trading operations without thorough analysis.

As a newcomer to trading, you should invest as much time as possible to learn relevant knowledge, analyze market conditions, and without in-depth analysis, do not rush to trade. Analysis of the market may make you sleepy and boring at first, but over time, you can master a wealth of trading knowledge, develop outstanding analytical skills, and truly understand the essence of the works written by many investment masters.

Hidden danger 9: niche trading platform

Before entering the cryptocurrency market for investment, the ninth hidden danger you need to pay attention to is the niche trading platform.

Security is the number one priority when choosing a cryptocurrency trading platform. In history, there is a famous "Moutougou" incident as a guide to the past. Even with the current head trading platform, there have been more than 7,000 Bitcoin thefts this year. Compared with large trading platforms, some niche trading platforms have weaker security measures and technical strength, and are more vulnerable to hackers. Once hacked, assets are stolen, small platforms may not be solvable, and losses are likely to be borne by investors themselves.

Therefore, it is very important to choose a reliable and trustworthy veteran trading platform.

Hidden danger 10: expecting a glimpse

Expectation is a tenth hidden danger that needs to be paid attention to when entering the cryptocurrency market. This kind of psychology is very easy for people to make quick success and benefit their own "gambling."

In fact, whether it is to learn the relevant knowledge of cryptocurrency, or to analyze the market conditions, to earn investment income, it will not be smooth sailing, nor will it not happen overnight, but it will take a lot of time and effort.

Don't think of the cryptocurrency market as your "cash machine". It's not magic, it won't make you rich overnight. On the contrary, it is likely to become your "burning machine" because of your lack of cognition and ability. Losing the principal, it ended in a fateful ending.

Message mining : 10 hidden dangers/traps mentioned in this article, which ones have you committed? Or do you know what hidden dangers/traps? Feel free to share your opinion in the message area.

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『Declaration : This article is translated from “The Daily Hodl”. The original author is Ejiofor Francis. The translator has deleted the article. The article is the independent view of the original author. It does not represent the vernacular blockchain position and does not constitute any investment advice or suggestion. You are not allowed to reprint this article by any third party without the authorization of the "Baihua Blockchain" sourced from this article.

Compilation: Fang Fang