Introduction: The shocking truth behind the failure of most traders
Did you know that 90% of traders in the cryptocurrency market lose their money? This number may seem shocking, but it is a reality faced by most entering this market without enough preparation. Is the reason market volatility, or human errors that can be avoided? The truth is that most failures are due to wrong decisions, not the market itself.
In this article, we will reveal the fatal mistakes that destroy trading accounts, and we will explain how to avoid them in a practical way that ensures you stay among the 10% successful.
1. Lack of a clear trading plan
Problem: Many traders enter the market based on emotion or excitement without having a clear plan. They buy during rises out of fear of "missing out" and sell during drops due to panic.
Solution:
Define your strategy before entering any trade.
Set clear goals for taking profits and stopping losses.
Stick to the plan regardless of your momentary feelings.
Practical example:
Suppose you decided to enter a buy trade for currency "X" at a price of $100. You should predefine:
Take profit point (e.g., at 120)
.
Stop loss point (e.g., at 90)
Risk-to-reward ratio.
2. Overtrading
Problem: Some traders believe that trading all day increases profits, but the opposite is true. Too many trades lead to rash decisions and increased commissions and losses.
Solution:
Focus on quality, not quantity.
Do not enter trades unless strong signals are available.
Use strategies like "deliberate trading" instead of random trading.
Example:
If you are making 5% from one reliable trade per week, that is better than losing 10% due to 10 hasty trades.
3. Not managing risks properly
Problem: Entering trades without determining the risk size leads to significant losses. Some bet all their capital on a single trade, exposing themselves to bankruptcy in an instant.
Solution:
Do not risk more than 1-3% of your capital on a single trade.
Always use a stop loss.
Distribute your capital across multiple trades to reduce risk.
Practical example:
If you have $10,000, do not put more than $300 into a single trade even if you are confident in it.
4. Drifting behind emotions: fear and greed
Problem: Greed makes the trader hold onto a trade for too long, while fear makes them sell quickly at the first slight drop. These emotions are the number one enemy of any trader.
Solution:
Rely on data and technical analysis instead of emotion.
Use strategies like "partial profit-taking" to secure part of the profit while the trade continues.
Remember that the market always provides new opportunities.
Example:
If you make a 50% profit on a trade, you can sell 50% of the quantity and keep the rest, instead of risking losing everything.
5. Ignoring technical and fundamental analysis
Problem: Some rely solely on recommendations or news without understanding technical or fundamental analysis. This makes them prone to making ill-informed decisions.
Solution:
Learn how to read charts and technical indicators such as RSI and MACD.
Follow economic news and regulatory updates that affect the market.
Combine technical and fundamental analysis to make more accurate decisions.
Practical example:
When you see that the price of Bitcoin is at a strong resistance area in technical analysis, but there is strong positive news such as government approval of a new ETF, you can expect a breakout of that resistance.
6. Not learning from mistakes
Problem: Some traders repeat the same mistakes without reviewing their performance or improving their strategy.
Solution:
Keep a trading journal to document each trade, reasons for entry and exit, and results.
Review your past trades to see what worked and what failed.
Continue learning through training courses and following experts.
Example:
If you notice that you are losing in overnight trades due to unexpected volatility, it may be best to avoid trading during those periods.
Conclusion: How to become one of the 10% successful?
Success in the cryptocurrency market is not luck; it is the result of planning, discipline, and risk management. If you avoid these fatal mistakes and equip yourself with the right knowledge and tools, you will be able to improve your performance and stay in the market for a long time.
!