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Top 10 Crypto Trader Mistakes

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At the start of trading activities, the mistakes of a crypto trader can contribute to a quick drain of capital. Statistics show that more than 90% of exchange players lose their first deposit and leave the market in disappointment. Cryptocurrency is a very profitable financial instrument, but along with the increased level of profitability, it is worth considering large risks. When making an erroneous forecast, a participant of the exchange platform can lose a large amount, and with it the opportunity to make money in world markets.

In order to reduce the number of mistakes and reduce the level of risk, the player should familiarize himself with the key mistakes of crypto trading. Pictures and typical descriptions of standard problems will help you understand the system and prevent the collapse of your trading career.

The Most Common Mistakes of a Beginner Crypto Trader

The loss of invested funds can be explained by a variety of reasons, but experts name 10 crypto trader mistakes that most often lead to failure:

  1. Replenishment of the deposit in the amount of the entire starting capital. By investing all the free money, a person significantly increases the level of risk. Given the frequent drain of the first capital, one should not hope for a quick acquisition of knowledge and successful market trading. Beginners often miss important elements such as money management and free capital management. A person who is not able to manage free finances will spend them on unprofitable trades and will not be able to win back in case of several defeats in a row.
    At the start of a trading career, it is recommended to invest no more than 10% of the total capital. Many brokers allow you to start with a deposit of 10-50 US dollars. This amount is quite enough to master the basic principles of the market and determine your prospects.
  2. Dismissive attitude towards stop orders. The inability to put up with the loss and the desire to get the maximum profit often leads to a complete loss of the deposit. A person refuses to set stop loss and take profit, hoping for the speed of his own reaction. In case of a sharp change in quotes, it is not able to immediately react to a price reversal, as a result of which it increases losses or reduces potential profits.
  3. Investments in one investment instrument. As a rule, beginners choose popular cryptographic currencies that have shown a high level of profit and can bring quick riches. Lack of diversification of funds is one of the typical mistakes of a crypto trader. A person is completely confident in the forecast, while in fact there is a possibility of erroneous analysis and premature conclusions.
  4. Rash trades refer to the psychological mistakes of a trader. Experiencing strong emotions about the fall or rise of quotations, a person will make impulse trades. Most often, such purchases are made at the top of the chart, when the investment asset has gained popularity and reached its maximum price value. A peak is always followed by a fall, which reduces the investor’s deposit.
  5. Ignoring the news background is often found in short-term traders. As a rule, such exchange players prefer technical analysis and do not pay attention to important news. Believing that the price chart already contains all the prerequisites for a change in exchange rates, they do not bother to analyze economic and political events. At the same time, sometimes unexpected news about the introduction of new laws can have a significant impact on the rate of digital currency.
  6. Improper composition of the investment portfolio. Wanting to get rich in the shortest possible time, some people completely ignore the prescriptions of specialists. They buy digital currencies with high volatility, filling a large part of their portfolio with them. As a result, with a sharp drop in rates, the deposit is reduced, and the trader leaves the world market.
  7. Premature fixation of the resulting loss is a psychological problem of the stock player. Noticing a movement against a trade, a trader fears major damage and seeks to leave the market. At the same time, a short-term movement of the price can be caused by a correction, which will end over time.
  8. Inflated expectations from trading. Some people consider stock trading on a crypto exchange to be an easy get-rich-quick option. They are confident that in a few months their capital will increase significantly. Among the mistakes of a novice crypto trader, there is a judgment about the availability of earnings on digital coins. It is spread by fraudulent brokers who want to scam money from gullible customers. Convincing people of the simplicity of the crypto market, scammers receive large deposits for promotion, after which they disappear forever.
  9. Inappropriate use of trading robots. Modern software developments can really simplify the activities of an ordinary trader, but not all people know how to use computer systems. In order for the program to give a positive result, it is necessary to configure it in accordance with the chosen behavior strategy. In case of incorrect settings, trading will only bring losses.
  10. Keeping all the profits received on the exchange. The main mistakes of a trader include the refusal to use cold wallets. Sometimes hackers hack even the most popular and reliable exchanges, after which users lose all their invested capital. If the trader does not use part of the earnings, it can be transferred to cold storage.

Taking into account these 10 mistakes of a crypto trader, a person will understand how to achieve a high professional level and protect himself from financial losses.

How to Avoid Crypto Trading Mistakes

How to Fix Crypto Trader’s Mistakes and Start Making Money?

There are often mistakes in a person’s life, which can be corrected if prepared in advance. Experts recommend adhering to several rules that improve the final trading result:

  • Never interrupt the educational process. After gaining some knowledge about the market, some traders stop reading books and educational articles. They believe that they have fully understood price movements and know how to predict them. At the same time, it should be borne in mind that the market platform is constantly changing and for successful work you need to constantly update your knowledge.
  • Make a trading plan and always follow it. It is possible to enter the market only after a person has thought through his actions, determined the rules for placing orders to buy or sell an investment asset. In this way, the trader will reduce stress levels and trade more confidently.
  • Monitor your inner state. Strong emotional turmoil can have a negative impact on the result of trading activities. If a person feels overwhelmed with feelings, it is better to temporarily refuse to make deals. In some cases, you can use meditation techniques, listening to pleasant music, or walking in beautiful places. This will help you relax and restore your inner balance.
  • Keep a diary of trades and analyze the result. Record every trade and pay attention to erroneous or winning positions at the end of the working day. By carrying out daily analysis, the trader will improve the current tactics and reduce the number of losing trades.

In order to improve his working strategy, a stock trader must pay attention to special literature and the latest news regarding modern developments. Thus, he will improve his trading result and will be able to make money in any economic situation.

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