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TOP 10 trader’s mistakes

With cryptocurrencies being popular, an increasing number of people have become interested in crypto trading. Since newbies lack the requisite experience and investment flair, many users lose money.

Top 10 traders mistakes

To make your trading experience and journey successful, we have identified 10 classic mistakes that hinder earnings:

  1. Violation of money management.

  2. Passion for leverage.

  3. Violation of trading strategies.

  4. Trading based on excitement or fear.

  5. Lock in profits.

  6. Absence of hard stops.

  7. Trading money needed for livelihood.

  8. Using bots, advisors, algorithms.

  9. Neglecting safety issues.

  10. The wrong target for speculation.

Violation of money management

The first mistake is violation of money management rules. Money management is the main direction in trading, allowing you to calculate the potential lot size in case of poor analysis.

Errors in risk management look like a violation of the lot size with an incomparable analysis quality. Also, traders often set the maximum leverage on the full size of the deposit. An increase in the lot size under good circumstances leads to a significant increase in profits, and under bad circumstances it takes the trader out of the market.

Successfully trading cryptocurrencies means distributing rates in relation to the total deposit volume. There are various approaches to money management.

  1. Fixed percentage. The lot size is determined by the ratio of all available funds. Conservative strategies imply a 3% limit on the entire deposit. Even in error cases, there will be at least 30 attempts for new forecasts, allowing you to earn more.

  2. Fractional MM. A more sophisticated scheme using coefficient leverage. It is calculated as a percentage of the totality of session results.

  3. Fractional proportional MM. It differs from fractional risk management by the presence of additional coefficients. Suitable for traders who operate significant amounts on a trading account.

  4. Serial trade. The size of each next lot is calculated depending on the results of closing the previous one. The most famous strategies are Martingale and Fibonacci heap.

Passion for leverage

Leverage is a powerful tool that increases risks in proportion to profits. The high volatility of the crypto market makes leverage a dangerous tool to use for newbies.

Using flexible cross-leveraged positions, where the leverage increases in proportion to the movement of the cryptocurrency, will help reduce risk. Cross leverage reduces profits and minimises the risks of leveraged trading.

Violation of trading strategies

When choosing a trading strategy and tools for market analysis, it is important not to forget about rational analysis in favor of “subjective perception”. This problem is psychological. If the forecast is incorrect, it is worth refraining from subsequent trading speculations, temporarily.

Trading based on excitement or fear

Fear and excitement are two stumbling blocks for profitable trading. It makes no sense to talk about their impact on the quality of analytics and the actions taken. Under the influence of fear, you can close and open positions, while losing on commissions all the time. Newbies often neglect money management and, under leverage, lose all their money in one trade.

To avoid this, it is worth keeping a diary, calculating the likelihood of events, and firmly following a strategy, while implementing risk management measures.

Lock in Profits

Lock in profits is an opening in an opposite position with the same lot characteristics to minimise losses. This tool is used for flat rates in a volatile session without a stable trend slope and helps to make profit in the bull and bear market at the same time.

The problem with lock in profits is misuse. Traders often resort to it not during a flat, but to visually cover losses on an incorrect forecast, which leads to losses on commission costs.

To learn how to use lock in profits, follow a couple of simple rules:

  1. Do not lock on trends.

  2. Do not use fixing positions.

  3. Do not transfer open orders to the next day.

Lack of hard stops

The main rule of traders is hard stops and flexible profits. If the price has moved in the wrong direction, you should close the rate immediately.

It is better to open a new order several tens of points below the closing point. The situation with profits is the opposite. It is better not to be afraid to lose some of the profits and set more flexible closing points. This will allow you to not miss the continuation of the trend and obtain maximum profit from the transaction. In extreme cases, you can close the deal on a pullback or correction.

Trading money needed for livelihood

Trading in the cryptocurrency market is an entrepreneurial activity, a full-fledged business. If you trade in “free finance”, then there will be no psychological problems and no desire to win back losses.

If carrying out financial transactions with funds necessary for your livelihood and daily expenses (for example, finances needed to pay credit debts), especially in the unstable and highly volatile cryptocurrency market, traders experience psychological dependence on results and are likely to make more mistakes in the analysis of an asset.

Using autobots, crypto advisors, API algorithms

Some advisors and trading robots are tools of scammers who profit from the sale. Working trading instruments are not publicly available. Traders who develop special indicators use them independently.

Algorithms that work with historical data cannot offer a 100% guarantee of a profitable trade. Machine analysis can give false signals that need to be analysed personally.

The use of autobots and API algorithms is rational to speed up the analysis and tracking of several assets at the same time. The final decision to buy or sell should still be made by the trader.

Neglecting safety issues

Unlike fiat currencies, crypto assets are not regulated by banks and do not have their own guarantors.

Security problems and subsequent theft are the greatest danger for a speculator. Step-by-step instructions will help increase the security of the wallet and incoming transactions:

  1. Get a cold wallet.

  2. Do not share your password and login details with anybody.

  3. Regularly scan your computer for viruses.

  4. Create a separate account, which is not associated with your main email account.

  5. Deposit and withdraw funds only through the exchange.

  6. Use two-factor authentication.

The wrong target for speculation

Selection of investment trading cryptocurrency is based on liquidity indicators and the correlation of internal technical constraints. 95% of modern altcoins show a strong correlation with:

Analysis of a subsidiary cryptocurrency without a correlation component can lead to incorrect price predictions. There are also young currencies that can theoretically be profitable. In practice, 99% of the time they turn out to be a soap bubble.

If you trade based on the main cryptocurrencies and measure the interaction ratio of different assets, then this is often not so profitable due to the percentage of volatility. Thus, it is more profitable to trade Bitcoin than an altcoin from a lower division.


Avoiding the mistakes of traders cannot increase profits, but you can minimise risks and losses, as well as ensure results are stable and more predictable.

The absence of errors does not guarantee an improvement in the quality of the analysis. A basic understanding of fundamental and technical analysis, news trading, the use of indicators, and controlling emotions will help you to trade better.

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