Losing money in the crypto market is a regular thing for almost everybody; it has happened to many people. The cryptocurrency market is not friendly, and the asset class is extremely volatile. 60% drawdowns on strong altcoins is a normal situation; even the safest store of value, Bitcoin, regularly has 20 to 30 percent corrections during a bull market. If you are not used to this and have been in the market for a short time, it can shake you out. It is quite tough to get used to.
To avoid losing money unnecessarily in the crypto market, the first thing to do is trade less. Trading is a tough game, and most traders lose about 90% of their accounts in the first three months.
Meanwhile, people who only buy and hold their cryptocurrencies as long-term investments return thousands of percent over the years in returns. As long as you trade, you are prone to have losses. Trading is tempting, and leverage trading is very tempting, but leverage trading is a very tough game; it is a tool for experienced traders.
You do not necessarily need to be trading, most especially newer investors. It is a different situation if you have been in the market for a while and want to risk it and attempt trading. Most people do not know anything about trading, they get it, and they lose money. These big hits to your portfolio can take a long time financially for you to recover from.
It even takes a long time psychologically for you to recover from taking a big loss of big liquidation on a leveraged exchange. Experiencing losses in trade can psychologically bring you down, you want to maintain your confidence in this market, and one of the easiest ways to do that is to invest instead of trading. You can trade once in a while, especially when you see a very good opportunity, but it is advisable to invest most of the time. Most of the successful people in the cryptocurrency market invest.
Another thing is always to take your profits. Taking profits is very important, whether you have been in the market for a long time or a newcomer. The crypto market is very speculative; many of these altcoins are very speculative, even the safest cryptocurrency is still speculative. If you have observed, Bitcoin has been acting sideways lately; although it is a long-term wealth asset.
If you are throwing money into altcoins, you have to keep in mind that they are very volatile and speculative. You have to sell sometimes; you do not have to sell a hundred percent, but you can sell in bits and certain percentages. When you begin to see these gains and massive pumps on your altcoins, you know that it is time for you to sell because if you don’t, when the market dips, the coin may even dip by 90%. You have to sell and at least get your initial capital back. When you do that, you have protected yourself.
