Bitcoin Investor Lost On Every Trade. Here’s Why

For many of the newcomers, this is their first foray into investing. They skipped the “boring” 20%-plus returns of the stock market last year and went straight for the crypto. None of them have faced a true bear market, as every recent dip has been met with eager dip buyers.

However, most of them, like Jordan, have no plan of attack. Everyone knows how to buy; nobody knows how, or when, to sell. Millennials have a penchant for risk, but this can also be a curse when they avoid selling when they should.

It is no wonder that investors keep losing money on an asset class that rose 5,000% in two years.

If You Fail to Prepare, Then You Are Prepared to Fail

 One of the greatest investors of all time, George Soros, had no qualms with buying bubbles. He famously said that when he saw a bubble forming, he would rush in to buy, “adding fuel to the fire.” Soros also knew when, and how, to sell.

The biggest mistake by investors is not having a strategy — and giving into emotion. Every trade must have an entry point, an exit point and a stop-loss to keep you on track.

Booking profits might limit your gains, but stop-losses will also prevent total losses. As a rule of thumb, I always leave an open “good ‘til canceled” limit order to sell 25% of my position at higher prices. This forces me to take a profit and reduces my initial cost basis.

If you are consistently booking profits, you will be left with a better mindset when the panic selling happens.

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Moon Kil Woong 1 year ago Contributor's comment

Sadly many people in #bitcoin right now are in it with the gambling mentality which, as the author demonstrates, is the exact wrong mentality for this. $BITCOMP