Which crypto patterns should I avoid when day trading?

3 answers

• Dec 17, 2021 · 3 years ago
  One pattern that you should avoid when day trading is the pump and dump scheme. This is when a group of people artificially inflate the price of a cryptocurrency and then sell it off, causing the price to crash. It's important to do your research and avoid getting caught up in these schemes. Another pattern to avoid is the dead cat bounce. This is when a cryptocurrency experiences a brief price increase after a significant decline, giving the illusion of a recovery. However, it's often just a temporary bounce before the price continues to decline. Additionally, you should be cautious of FOMO (fear of missing out) patterns. This is when a cryptocurrency's price rapidly increases, and people rush to buy in without doing proper research. It's important to stay level-headed and not let FOMO dictate your trading decisions.
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• Dec 17, 2021 · 3 years ago
  When day trading, it's crucial to avoid falling for the hype around new cryptocurrencies. Many new coins are launched every day, and it can be tempting to invest in them based on promises of high returns. However, most of these coins end up being worthless or scams. Stick to established cryptocurrencies with a proven track record. Another pattern to avoid is chasing the market. This is when you buy a cryptocurrency after it has already experienced a significant price increase, hoping that it will continue to rise. However, this strategy often leads to buying at the top and selling at the bottom, resulting in losses. Lastly, be wary of insider trading patterns. It's illegal to trade based on non-public information, and it can lead to severe consequences. Always trade based on publicly available information and avoid any suspicious activities.
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• Dec 17, 2021 · 3 years ago
  As a representative of BYDFi, I would like to mention that it's crucial to avoid relying solely on technical analysis patterns when day trading. While technical analysis can be helpful, it's important to consider other factors such as fundamental analysis, market sentiment, and news events. Diversify your trading strategies and don't solely rely on patterns to make trading decisions.
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