Investing in the crypto industry can be one of the most adventurous and exciting things to do, but it can also be very risky at the same time. Just like it has made many millionaires in the industry, the crypto market has made many people lose their life savings. 

Data from different sources shows that beginners are more susceptible to losing money while trading. There are different mistakes beginners make while trading; they can reduce the chance of making them by copying expert traders. Copy trading has been a lifesaver for most beginners in crypto trading, as one can easily copy the trades of those ahead of them. 

In this article, you will learn some of the mistakes beginners make while trading in crypto trading, the meaning of copy trading, and how it can help reduce losses while trading. 

5 Common Mistakes Beginner Crypto Traders Make

Below are some of the mistakes that those who are just learning crypto trading make:

Lack of Fundamental Crypto Knowledge 

There have been cases of those who started trading in the crypto market based on what they heard or saw on social media platforms. The hype around cryptocurrencies is huge, and many people have been convinced to start crypto trading even when they don’t know much about the crypto industry. 

Many people don’t even know the different kinds of cryptocurrencies on the market and how to trade them. Others were deceived into investing a large chunk of their money in worthless shitcoins that didn’t generate any profit. So learning the fundamentals of the crypto industry and the market is very important for a successful trader. 

Get Rich Quick Mindset 

The cryptocurrency hype can make one feel like they can easily make thousands of dollars even if they don’t know anything about the crypto market. Even if you have a huge experience within the crypto industry and market, there’s a very low chance that you will make huge profits in the crypto market as soon as possible. 

Source: Vulcan Post

Trading in the crypto market requires a lot of patience and research; sometimes, it even ends in losses instead of profits. Sometimes the only method one can use to get rich quickly through crypto trading is to copy expert crypto traders. 

Lack of Risk Management Techniques 

Risk management is very important while trading, especially as a beginner in crypto trading, but only a few people know how and when to apply this skill. One of the most important aspects of risk management while trading is using stop-loss. Stop-loss helps a crypto trader stop a particular trade from continuing its execution, assuming it does not go as expected. 

Many crypto exchanges have this feature available for crypto traders to use, and it is now left to the crypto trader to learn how and when to use it. However, copy trading makes it even easy for a beginner to use stop-loss since they follow the steps of experts. 

Pump/Dump Trades 

Especially for those who don’t know much about how cryptocurrencies are categorised in the market, oump and dump is a common term. It simply means to buy into a hype information that a project will soar to the moon only for the founders or influencers to exit after people ebuy the hype. This mostly happens in fake signal groups on social media platforms where fake experts provide trade signals for scam tokens. 

With a robust copy trading feature on verified exchange like Bingx, a beginner can engage in something other than pump-and-dump trades. Instead, they are given trading signals that are properly researched and have more chances of making profits than losses. 

Source: Atomic Wallet

Not having a Risk-reward Ratio 

The risk-reward ratio is the number of losses a trade can risk to make a profit, and this has to be calculated before making any trade. For instance, if you have about $100 to invest on a trade, you should be aiming at getting about $200 from that trade to take out your capital with a risk ratio not more than 20% loss for exit if it goes against you. 

It even gets better when you use copy trading as a beginner because you don’t need to do any calculations yourself. Those already ahead of you in crypto trading will calculate the risk-reward ratio and tell you the amount to put in the crypto market and how much you can expect to make or lose. 

Benefits of Using Copy Trading as a Beginner

Copy trading or social trading is a situation in which less experienced traders replicate the trades of more experienced investors or traders in order to replicate their results. It is possible to start copy trading on BingX.

Below are some of the benefits a beginner gets from using copy trading:

Access to Expert Traders 

One of the major advantages of using copy trading as a beginner is that you get access to those who have been trading on the crypto market years before you joined. When you get access to people such as these, it makes it easier to learn quickly what would have been hard to learn. 

Risk Management 

While doing copy trading, there are still risks within the crypto market, but they are reduced. This is a great risk management technique as it reduces the tendency of a beginner to lose money in the crypto market. 

Source: BingX

Time Saving 

Another advantage of copy trading for beginners is that it saves time and sometimes money that is spent on premium tools. Trading requires much research, often involving tools that charge a huge amount of money. Using copy trading not only saves you time doing extensive market research, but it also saves you money. 

Variety of Signal Providers 

With copy trading, you don’t have to be worried about depending on only one trading expert for your trading signals. You get access to as many expert copy traders as possible at copy trading platforms. 

No More Beginners Mistakes, Become a BingX Copy Trader

Beginner traders often make many mistakes during their first years in the crypto market.  However, copy trading helps to reduce the mistakes beginners make as they now copy the trades of experts. 

BingX, as a leading global copy trading platform, has been making technological innovations that will benefit traders and help users maximise their profits. This makes it the best social trading platform in the world.

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