1. Buy the Top – Chase the Price
Mistake: Jump into buying a coin right after it has pumped, hoping the price will go even higher. For example, you see a coin increase by 50% in a few hours and rush to buy because you are afraid of missing out.
Consequence: The price often reverses and drops sharply soon after (dump), leaving you "stuck" at the high price and suffering a big loss. This is the "buy the top, sell the bottom" situation that many beginners encounter.
How to fix:
Wait for the pullback: Be patient and wait for the price to adjust (decrease slightly) after a strong increase. This helps you buy at a more reasonable price.
Technical analysis to identify support zones or use indicators like RSI to avoid buying when the market is "overbought".
Do not follow the crowd psychology or the fear of missing out (FOMO).
2. Trading Without an Exit Plan
Mistake: Entering an order without a predetermined take profit or stop-loss. Many people just buy because they "feel good" without knowing when to sell.
Consequences:
If the price goes up, you may get greedy and hold for too long, leading to missing the opportunity to take profit when the price reverses.
If the price goes down, you may panic and sell at a big loss, or worse, hold forever in the hope that the price will recover, trapping your capital.
How to fix:
Define a clear target: Before entering an order, decide at what price you will take profit and at what price you will cut loss. For example: "I will sell if the price goes up 20% or down 10%."
Use automatic stop-loss orders on Binance to minimize risk when the price drops unexpectedly.
Stay disciplined: Don't let emotions rule and change your plan midway.
3. Ignoring Transaction Fees
Mistake: Making too many trades without paying attention to fees, especially when you are scalping or trading at high frequency.
Consequences: Accumulated transaction fees will gradually "erode" your profits. For example, with a fee of 0.1% per order, 100 small trades can cost you 10% of your capital just to pay the fees.
How to fix:
Use limit orders: Instead of market orders (buy/sell immediately, higher fees), place limit orders to control the buy/sell price and save on fees.
Pay fees with BNB: Binance offers a fee discount when you use BNB, which significantly reduces transaction costs.
Limit over-trading: Only place orders when there is a clear signal, avoid unnecessary continuous trading.
4. Trading Based on FOMO and Hot News
Mistake: Buying a coin just because it is being talked about on social media, forums, or because a "KOL" (influencer) is promoting it.
Consequences: You can fall into the trap of pump-and-dump, where the price is pushed up to attract buyers, then dumped heavily causing the price to plummet. These coins often lack a solid foundation and have no long-term value.
How to fix:
Do thorough research: Before buying any coin, learn about the project, the development team, the technology, and its true potential.
Use reliable sources of information instead of following rumors on social media.
Build a trading strategy based on technical and fundamental analysis, instead of emotions.
5. Overtrading
Mistake: Trying to catch every price movement in the market, trading continuously to "make quick profits". Some people even enter orders just because they feel "idle" or want to recoup previous losses.
Consequences:
Trading too much leads to loss of focus, hasty decisions and consecutive mistakes.
Exhaustion, stress, and loss of control, making you prone to falling into a losing spiral.
Cumulative transaction fees are higher than potential profits.
How to fix:
Focus on quality: Only trade when there are strong signals and clear opportunities, such as high volume breakouts or reliable price patterns.
Set a limit on the number of trades per day or per week to avoid getting caught up in the market.
Take time to rest and reevaluate your strategy instead of trading continuously.
