How Not to Lose Money Due to Greed and Bad Decisions

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Numbers don’t lie —- approximately 70-90% of investors lose money over one year. Although crypto and financial markets generally can be pretty complex, let us assure you that most losses occur due to greed, fear, and stupidity. 

If you want to be in the remaining 10% of investors who benefit from crypto, we suggest you keep reading. We have gathered the top triggers that force market players to make bad decisions and, as a result, lose their honestly earned (or not) money. 

Good old FOMO 

How a Squid Game Crypto Scam Got Away With Millions — this headline appeared in the media after the hyped Squid token “collapsed” and left thousands of people with losses and disappointment. But how did they pull off a multi-million-dollar scam? Easy — they played on human greed. 

Fear Of Missing Out (FOMO) is a common trigger that creates a feeling of vanishing gains. Imagine you see a hyped token all over the media, everyone is buying in, and the chart is skyrocketing. It then translated into the feeling of urgency to buy this asset and not miss out. Sadly, the result of FOMO-driven decisions is usually not gaining but losing. We strongly advise you to keep a cool head and do research before opening any positions. 

All the eggs in one basket 

Diversion and risk management are key to succeeding (or, at least, not failing) in any financial market. Shanghai investor lost $28,000 in life savings on the previously mentioned Squid Game token. However, this could have been easily avoided had he abided by the number-one rule: do not keep all your eggs in one basket. 

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Sure, there is a chance some speculative asset will do the trick and make you a millionaire overnight. However, keep in mind it is an incredibly small chance, and the Shanghai investor’s fate is much more likely. 

“Hunch” trading 

If you want to benefit from crypto long-term, you should consider investing in your education first. Skills and knowledge are necessary to choose an effective working strategy, manage risks, and calculate profits and losses. All top traders are highly organized, emotionally collected, and calm. Instead of basing their decisions on internet predictions, FOMO, or greed, they conduct technical and fundamental analyses to identify promising assets. 

How to make it in crypto?

Although crypto investing and trading may seem too complex and unpredictable, the first step to success is identifying your goals and strategies. Our next article will shed light on the most common trading strategies and how they work — stay tuned!