You happened to hear about crypto and people who make money with it. So you created an exchange account and perhaps started a Twitter Account with your favorite animal as an avatar. Let all that money come, you think to yourself!
But it is not that easy. You only hear the dreams and good results of traders. They look like gods, and your favorite Marvel superhero is nothing compared to these OGs. It is very rare for traders to be vulnerable and to admit their mistakes. That is unfortunate for others because you learn from those mistakes.
In this article, I describe many mistakes made by traders that I myself have encountered more than once in my own Slack community. They are the common thread of pitfalls for traders. And if you can prevent this, you can live up to those courageous dreams and live to your own liking.
They place responsibility for others
Believe me that the majority of traders rely blindly on others analyzes and promotions of coins. You better not do that, because you have a different personality, strategy and life situation than the other. What one sees as a risk, the other sees as conservative. You will notice that if you take the step to analyze someone's work yourself deeply, you often disagree with the analysis. That really opens your eyes. Take 100% responsibility for your decisions. It just feels best if you 100% own that winning trade. That gives you confidence, and that helps you in your development as a trader.
They see heaven, but not hell
Most traders dream of huge profits; preferably even with a single trade. However, they do not see that it can also go the other way; it can also end in a loss. Put aside these dreams and delusions for a moment and analyze what is really the risk of your trade and the possible profit forecast. Put these against each other, and then you see clearly whether the trade is really worthwhile. They call this the risk/reward ratio of your trade.
They sprint the 100 meters instead of the marathon
Many traders are just mayflies. They start full of life and die almost the same day. A bright shining candlestick, which burns quickly. How come? Many traders are crazy about the huge profits that others show on social media with a single trade. Of course, this is possible, but it is very unlikely. Remember that most people only show their good results, not their lesser ones! Therefore, try to make a long-term plan for yourself and systematically work towards a long-term goal. You will notice that this feels much better. In the end, you will really achieve your goal if you act consistently and have a working system. Choose this instead of pulling that sprint.
They use asymmetric position sizes
We have already discussed risks and rewards. But your position size is at least as important. I can imagine that you want to increase a small balance quickly. Then you trade a large part of your assets. However, that can also turn out wrong! If you want to build up capital systematically, you choose fixed position sizes of your trades. For example, 1 to 2% of your total assets per trade. If you then make a mistake, you learn a lot, but you do not lose much. Also, make sure you weigh the volume per 24 hours in a coin. Otherwise, it can be difficult to exit your trade at the moment you want to.
They do not take orders and waste a lot of time and energy
On many exchanges, you can set a stop loss or a take profit order. Do that and settle for the loss or profit that comes from it. If you prevent the above errors (sensible position size and good risk/reward ratio), then you should not have the inclination to stare at the screens. Your trade will succeed, or it will not succeed. So be it! Many traders become exhausted or emotional because they constantly stare at 1-minute candles. Perhaps you will get a profit once by doing that, but it can just as well turn out wrong. It does not matter much in the end. Save time and energy and check everything you can before entering a position.
Conclusion
To conclude, work systematically. Take responsibility for your trade. Work out the risk and reward ratio of your position. Choose a sensible position size. Secure orders and let it go. Remember that if the trade does not work, it is not so bad when you do it smartly. You learn a lot from it. After all, trading is a marathon and the one who constantly uses his time and energy efficiently and maintains a consistent system, wins!