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Excitement in a crypto bull market can lead to several common mistakes that may put your investments at risk. Its easy to become overly confident in your investment decisions during a bull market, thinking that every choice will yield positive results.
This type of mindset can lead to neglecting due diligence and impulsively buy/sell without doing a proper research. To avoid this, a disciplined approach be maintained and continue analyzing market conditions and asset fundamentals, regardless of recent successes.
FOMO, the fear of missing out often drives investors to purchase assets at their peak prices hoping to capitalize on further gains which can result in significant losses if the market corrects shortly after your purchase. Instead, consider strategies like DCA.
There's a temptation to focus investments on sectors or assets that are trending. This strategy, however, greatly raises risk. Diversifying portfolio across various assets can help cushion against potential declines in any one sector.
Many investors hold onto their assets too long hoping to reach an unrealistic peak price, which can lead to missed opportunities for profit collecting. Structure clear profit taking strategies and set targets based on percentage gains or specific price points to secure profits regularly.
In order to counteract emotional reactions that can lead to panic selling during market dips or buying impulsively during price surges, develop a long-term investment strategy and stick to it. Avoid knee-jerk reactions based on short-term market movements.
Driven by hype of FOMO, investors often jump into new projects without thorough research. Conducting comprehensive research on the fundamentals of the project, team and market potential is important before making any investment decisions.
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