- Over-Leveraging: Avoid using excessive leverage, as it can lead to rapid liquidation. Stick to 2x-5x leverage and use tight stop-losses to minimize risk.
- Emotional Trading: Don't let emotions dictate your trading decisions. Develop a solid plan and follow it to avoid impulsive choices based on feelings.
- Ignoring Security: Protect your assets by storing funds in hardware wallets, enabling 2FA on exchanges, and being cautious of suspicious links or transactions.
- Blindly Following Hype: Research thoroughly before investing in a coin, rather than relying on social media trends or influencer opinions. Study tokenomics, use cases, and the project's roadmap.
- Chasing Losses: Avoid attempting to recoup losses by doubling down on trades. Instead, take a break, analyze what went wrong, and re-enter the market when you're mentally clear.
- Trading Without a Strategy: Develop a trading plan with clear entry and exit points, and backtest it before going live. Use proven setups like breakouts, support/resistance zones, and swing trading.
- FOMO Entries: Be patient and wait for pullbacks or retest levels before entering a trade. Avoid buying into hype, as it may be too late.
- Ignoring Risk Management: Limit your risk to 1-3% per trade, diversify your portfolio, and use stop-losses to protect your capital.
- Ignoring Market Cycles: Understand market cycles, including accumulation, bull runs, distribution, and bear markets. This knowledge will help you buy low and sell high.
- Impatience: Focus on consistent small gains, let trades play out, and trust your system. Patience is key to successful crypto trading.
Additionally, consider these general tips ² ¹:
- Overtrading: Avoid placing too many trades, as it can lead to higher losses and unnecessary stress.
- Overconfidence: Stay grounded and continually reassess your investments to avoid emotional decision-making.
- Poor Portfolio Diversification: Diversify your portfolio with multiple cryptocurrencies to reduce risk.
- Not Using Stop-Loss Orders: Always set stop-loss orders to limit potential losses and adjust them according to market conditions.