Have you heard stories about how some people have become millionaires trading bitcoins? Every now and then, you are going to come across tales of traders turning their initial deposit into millions and that too within just a couple of months.
For anyone who has never been a part of the crypto trading industry, it will seem like a good idea to generate substantial income. In fact, it will seem like a fairly easy way to accumulate massive wealth within a short amount of time. In some cases, people have even quit their jobs to take up trading as a full time business. They try to become professional bitcoin traders without having the required skills and knowledge. Unfortunately, such tales don’t usually have a happy ending. The fact is that so many people have lost considerable amounts of their hard earned funds in bad decisions. In an attempt to make a lot, they end up losing a lot and eventually quitting the trading industry altogether.
Becoming a trader is a hard business and becoming a successful one is even harder. It is estimated at about 95 percent of newcomers fail when they first enter the markets. So what does this tell us about the crypto markets and online financial markets in general?
Yes, they are challenging and you will have a difficult time in getting started and making a place for yourself in the industry. The bitcoin trading markets are complicated for many reasons. In this article, we will take a look at some of these main reasons.
The market never sleeps
The bitcoin market operates 24/7 which creates vast opportunities for traders; regardless of the time. But, it also makes people feel that they need to trade day and night in order to survive. In some cases, traders don’t sleep at night just because they don’t want to miss out on opportunities.
Isn’t it true that lack of sleep and fatigue can cause a person to make poor decisions? It even affects their concentration levels and slows down response time. So basically, when traders try to take advantage of the markets 24/7, they don’t realise that they are taking unknown risks. They try to trade based on emotions and the result is that they blow their finances and also ruin their health and personal lives.
Lack of transparency
In the digital currency trading industry, there is lack of transparency and usually traders don’t know what they are dealing with. Put simply, there are brokers, companies, signal service providers and trading programs which are unregulated and even scams. Without proper regulation in place, it is hard for traders to figure out what they are getting into. Although the industry is moving towards regulation, it is quite risky at the moment due to the prevalence of so many scams.
Traders may come across an offer that may sound too good to be true, but what happens when it turns out to be a complete scam. With other financial markets, there are regulations and the trader is also able to review earnings on a quarterly basis, get access to sales reports and other fundamentals which helps them make proper decisions. But in the case of digital currencies, such fundamentals are non-existent which complicates trading even more.
Moreover, traders have to rely on technical analysis only when trying to invest in bitcoins, which can be relatively challenging for newcomers.
But, the good thing today is that there are trading robots available which take care of technical analysis very effortlessly. A good one that every new trader should try out is the Bitcoin Trader. This trading software has been developed by an expert and it has some great features which enable newcomers to have a pleasant trading experience. Loss of capital investment and risks are generally minimised when you opt for a working trading solution.
Too many assumptions
Due to the assumptions that bitcoin trading is an easy way to achieve instant wealth, traders have a lot of unreasonable expectations. They try to turn their small investment into their life savings.
They don’t realise that those who got wealthy in the bitcoin industry were the early investors. Instead they became a part of the industry when bitcoin was gaining massive popularity and increasing rapidly in value. But now the time has changed. There is high volatility in the market and things have become a lot unpredictable. It is not easy to make predictions about the price movements that will take place on the market.
So it is important that newcomers stop making assumptions about the significant wealth that can be earned easily and effortlessly. Having logical thinking and reasonable expectations will help you walk towards your goals.
Bitcoin is lucrative, yet risky investment option
Bitcoin has a lot of potential and if you take the right steps and make use of proper trading tools, you will achieve success. But it is also true that bitcoin trading is risky. If you invest in other markets, chances are you will lose part of your investment and not the entire amount. but with bitcoin, you can risk losing everything.
Therefore, bitcoin should be a part of your investment portfolio and not make up your entire portfolio. If you diversify your trading options, you will be able to reduce the risk of losing your funds.
Where's the advice coming from?
With the increasing popularity of bitcoins, everyone is trying to become an expert advisor on how to trade and when to trade. Everyone on the internet seems to be knowing the ins and out of bitcoin trading and the secrets to success.
But the truth is that newcomers are taking advice from people who are also new in the industry. They take advice from strangers who only claim to know a lot. This is definitely not the right way to go about seeking advice and assistance regarding your finances and investment decisions.
Some people may also manipulate newcomers for their own benefit. They may sell you trading programs which are bogus and unsafe to use. You should never trust anyone who offers advice on the internet, unless they are licensed or accredited.
Your experience will be your best teacher. Starting out slow will allow you to gain the experience you need to make the right decisions. Remember, success won’t come to you overnight and if you want to stick to the industry, you will need patience, dedication and commitment.