The 10 Worst Crypto Trading Mistakes That Make You Lose All Your Money

By Adrian Cruce

When it comes to crypto trading, the fact that everything is done online makes it so simple to think that you do not have to worry about many things. Unfortunately, most people make huge mistakes when they get involved in the crypto market. They end up broke really fast and have no idea why it happened.

Most of the beginners will learn the important rules of crypto trading when they make mistakes. You do not have to do this so let’s highlight the worst possible crypto trading mistakes that can easily make you lose your entire investment budget.

Crypto Trading With Real Money

When you want to start trading crypto, you are obviously tempted to make a deposit and start trading. This is quite common since many trading platforms give you great deals to do just that. What they rarely tell you is that even if you make a real money deposit, you do not have to immediately start using that to trade.

As a beginner, you need to start with paper money, which is practically fake money that allows you to use the trading platform to get familiar with it and test your strategies. Use paper money so that you can develop a winning trading strategy that you can then use with your real money.

Not Using Stop Loss

As a beginner, there is a huge possibility that you will trade based on emotions. You see crypto prices going up and down and are influenced by it. In the crypto industry volatility is really high so you have to protect yourself from how that influences your trading patterns. This is where the stop loss order steps in to help.

Traders have to accept losses and them move on to another trade. If you do not do this, you will lose a lot more than you should. Always set stop loss orders. If trades go against you, do not move them. When you do something like this, you lose money so much faster than it should happen.

Not Having A Balanced Portfolio

If you want to trade crypto, there is a pretty good possibility that you are interested in trading many other assets. Remember that the most successful traders in the world maintain a highly balanced portfolio. This includes having a mixed portfolio in cryptocurrencies and in other investment vehicles.

If you want to put a specific amount in crypto trading, divided it so you protect yourself. As an example, you could:

  • Put in 70% of the money in long-term holds – usually Bitcoin.
  • Put in 15% in cash – just in case you need to use it.
  • Put in 15% for active trading – which you do as often as you can.

When you take such a strategy, you just trade with the use of 15% of the portfolio you have. This offers a lot of security. Obviously, you choose the percentages, based on your personal risk tolerance.

Risking More Than You Can Lose

Related to the point before, in crypto trading you are drawn in by the fact that you earn money that can change your life. This is because of the huge success stories of early Bitcoin adopters. Unfortunately, this is not something that happens right now as the market is much less volatile than in its early years.

A huge crypto trading mistake made by many beginners is going all-in. They risk everything they have on cryptocurrencies. This is not a winning formula. You should always invest just what you can afford to lose, which is a mantra that applies to ALL investments you ever make.

Putting More Funds In Losing Trades

Trading and investing are completely different things. The trader has levels of invalidation and risk that apply to trades. As the stop loss level is hit, a trade is invalidated. When this happens, you need to move on to a completely different asset, especially as a beginner. When you put in more funds in those losing trades, which is much more common than it should be among beginner crypto traders, you are sure to lose a lot money.


In order to make money, you need to have money. As a beginner trader, you can easily be blinded by a misguided promise of making a lot of cash without having to leave your computer screen. Unfortunately, reality is not like that. Such a thing only applies when you have a lot of money available for trading purposes.

If you want to become a professional and you want to be actively involved in crypto trading at a highly-winning level, you need to be able to support everything in your life with this. Profits have to cover your living expenses without influencing how much money you use for trading.

Practically, you need around $100,000 that you can trade with and a profit of around 10% per month. This is not at all easy to achieve. Beginners often end up faced with a lot of stress as expected trading returns are not as high as they imagine. This is something you need to be prepared for.

Think of crypto trading as a marathon, not a race. If you have problems with money right now, there is a huge possibility crypto trading will not solve them.

Using Leverage

Leverage is widely promoted as something that helps you to make a lot more money as you trade. This is completely true. However, it can also lead to much higher losses. Remember that crypto investments are very volatile. Prices can quickly change. This is why you should not use leverage when you trade cryptocurrencies.

You should only use leverage when you are an advanced trader that has been profitable for a long time, in a consistent way. It is a certainty you will lose your funds really fast if you use leverage, especially when you try to do this to compound losses.

Not Having A Trading Journal

Every single successful crypto trader out there relies on a plan. As a trader, you need to hold yourself accountable when you take actions. This can only be done when trade details are recorded.

Remember that in crypto trading you will make mistakes. Learning from them is a huge part of the journey. Constantly refer back to the trading journal. In addition, record your emotional state, trade results and thought processes as trading decisions where made. This will help a lot more than you anticipate.

Not Understanding Trading Indicators And Patterns Used When You Trade

When it comes to technical crypto trading analysis, the beginner trader is usually very bad. Chart patterns are often identified but they are completely incorrect or simply are not there.

As a beginner, focus on a really simple trading system. Do not make decisions based on indicators or patterns that you do not 100% understand. Start trading with some really simple indicators, like using exponential moving averages.

Following What The Majority Does

Last but not least, most new traders just blindly follow what the majority does. Because of this, trades are modified really fast. The experienced crypt trader will quickly exit crowded trades. The beginner trader will stay way too long. This is normal since you can easily end up in the situation in which you do not have the confidence needed to go against the trends.

A very common problem is following crypto trading tips coming from Twitter accounts. This almost always goes towards losing money. Most of these accounts actually manipulate beginners so that they can make money.


Crypto trading is not easy. In fact, it is quite difficult. Fortunately, we are at a point at which you have a good possibility of making it if you rely on learning how to properly trade crypto. Avoiding the mistakes above is paramount and you need a good trading plan. No matter what happens in trading, you have to stick to that plan. Not doing so leads to losses.