It is thought that only beginners fall into these traps, but it happens to experienced traders too.
It could become increasingly likely that investors will be influenced.
According to investor Scott Melker, the Bitcoin (BTC) and cryptocurrency market is approaching a time when traders need to be extra careful.
“As the bull market takes shape, it is a matter of time before the cryptocurrency space is once again flooded at every turn with tempting shortcuts that promise prosperity if a few simple steps are followed,” Melker warned in an analysis sent to CriptoNoticias today .
He specified that These shortcuts come in various forms and often result in some investing their entire portfolio in a so-called “sure thing.”regardless of whether it is a trading system or a specific cryptocurrency.
“The most experienced tend to assume that only newbies fall into these traps, but many victims are experienced traders and investors who have become impatient over time,” he commented.
According to the expert, the longer it takes for the market to move in a positive direction, the more likely it is that even the most experienced traders will become careless.
6 things to consider to avoid investment traps
Melker, who is known for sharing his experiences and opinions on the ecosystem, explained six points that should be taken into account in order not to fall into investment traps that promise riches, especially in the expected Bitcoin bull market, where they can be strengthened.
The first question is: There are fraudulent investors who flaunt their luxurious lifestyleFor example, they display Ferrari cars and Rolex watches in opulent beach villas in Miami on Instagram to convey the message: “If they can do it, so can you.”
He warned that we should not fall for the stories being sold on the networks. “When was the last time you saw Warren Buffett, George Soros, Ray Dalio, Steve Cohen, Bill Ackman, Carl Icahn or any of the other greats behave like this? Shouldn’t they be the ones publicly boarding private planes and flaunting their jewelry? “It’s not necessary because they’re not trying to sell you anything,” he contrasted.
“Did you hear the story when Warren Buffet’s business partner had to make a call from a pay phone and asked Buffet for a dime? He reached into his pocket, pulled out a quarter and headed for change. Buffet, one of the richest investors in the world, is known for being incredibly stingy. Maybe there’s something to learn.”
Scott Melker, investor and influencer.
In second place is What to avoid is “confusing an inch with a mile.”. As an example, he mentioned that in his opinion “Solana bulls appear to have awakened from their hibernation” after their cryptocurrency rose more than 20% last week. “Today the prevailing opinion is that this ecosystem is ‘about to change the world,'” he said, suggesting that this expectation is exaggerated.
“I have no qualms about Solana; Yes, there are risks involved, but a single price fluctuation or piece of news shouldn’t drastically change how you feel about a project. For the Crypto Bros “They like to celebrate, including me, but it’s important not to lose sight of the long-term goal beyond the small victories.”
Scott Melker, investor and influencer.
The third point is that both misplaced confidence and genuine success can make investors want to take an investment a step further. But he pointed out that in doing so they are “actually moving further and further away from profitability and closer to a negative return.” For this reason, It’s important not to get too excited and reduce risk possiblehe clarified.
“Properly lowering the risk curve requires diligence, patience, conviction and additional research – qualities that many operators and investors are unwilling to endure or display,” he said.
As a fourth point, Melker points out that “it is extremely rare to find someone in the cryptocurrency space who is not guided or influenced by other people and acts solely at their own discretion.” And he made it clear that special caution should be exercised in this regard is required You can make the mistake of “investing in people instead of assets”.
“As investors spend more time in the cryptocurrency world, they may become increasingly likely to prioritize a cryptocurrency personality over managing their own portfolio, and that can be risky,” he added.
According to the specialist, many cryptocurrency enthusiasts leave the area because they trusted someone else’s advice to buy back at a lower price. For this reason, recommends paying attention to the advice of several “experts” who may have conflicting points of view. “This approach forces you to make independent decisions that prioritize the well-being of your portfolio,” he said.
The fifth situation is that you need to avoid using leverage in a desperate attempt to win back everything you lost or increase the size of your bets. Leverage is easily accessible and, in his opinion, is abused like a drug. In fact, he warns that “it’s a quick way to hit rock bottom.”
“Most traders should never touch leverage and those who do should only use it in very small doses,” he stressed. Once the bull market takes effect, one can expect to see more traders “winning” with leverage, but he cautioned: “Don’t fall for this crap, turn your head and look away.”
Sixth and finally, he emphasized this Basic security practices should not be ignored. In a bear market, stories of hacks, scams and attacks dominate the headlines and reflect the prevailing sentiment. However, in a bull market, such incidents tend to be brushed aside as if they never happened, he contrasted.
Summarize that Security remains a critical concern regardless of market conditions, whether in decline or in increase. And he emphasizes that when the community wanes and wallets are open to theft, scammers find more opportunities. Therefore, remember that there is no better time than today for everyone to reassess the security of their assets.
“Ensuring your safety doesn’t take much time. What takes time is trying to restore everything from the beginning,” he commented.
In conclusion, Melker opines that it is “better not to take shortcuts” to generate wealth in the cryptocurrency market. Consider that billionaire investor George Soros once said, “If investing is entertaining, if you enjoy it, you’re probably not making money; “Good investments are boring.”