16 investing mistakes that You should avoid

Covduk
5 min readJul 6, 2022

I’ve made a lot of investing mistakes. Read this article to avoid years of losses & pain in 2 minutes. Here are 16 common investing mistakes & how to avoid them

  1. The Sunk Cost Fallacy.

When you’re losing money, it’s hard to cut your losses. I failed to cut losses in time because I thought “I’m down 50% already, how much lower can we go” And every time I did this, I regretted it. 50% is better than 0. Cut your losses.

2. FOMO

It’s very easy to resist the urge of aping into a coin that’s pumping. Everyone is talking about it. Everyone made millions, except you. It’s super hard to resist the urge of joining them. I’ve done this countless times & it’s always ended up in losses.

3. Not taking profits.

When I just started out, I had a $500 trade reach $11K (unrealized) by pure luck. I was euphoric — the adrenaline was pumping & I was staring at the screen 24/7. But I was greedy. I was hoping it would go higher & didn’t take profits. It crashed.

This is a big one that everyone does. In the bull run, everything was pumping & people didn’t take profits. When the market became bearish, the people who didn’t take profits & stuck to their bad bull habits suffered. A lot of the blood we’re seeing now is due to that.

4. Don’t revenge trade.

Don’t allow one loss to cascade into a string of losses. It’s easy to get triggered by a loss & let the emotions take over. This always ends up with poor investing decisions that your rational self would normally never allow you to make.

A good rule to have it to step away for a bit when you get hit by a loss. Don’t make investing decisions when your emotions are running high.

5. The Cults.

Cults & echo chambers can be hard to beat. We saw this with Terra: Anyone who criticized them was torn to shreds. As a result so many folks were sucked into the echo chamber & lost money. Always be on the look out for echo chambers.

6. Don’t be in love with yesterday’s narrative

Narratives change. In crypto, every cycle has multiple new superstars. But things move quickly here. If you’re blindly stuck up on a…

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Covduk

I write crypto 101s, dive dives and how tos. Crypto | NFTs| DeFi