Avoid Common Crypto Trading Mistakes
Fast checklist
Clarity
- Written thesis: why this coin, why now?
- Invalidation: what proves you wrong?
- Timeframe: scalp, swing, position?
Risk
- Risk per idea: 0.5–2% typical
- Hard stop set before entry
- Position size derived from risk
Execution
- Use limit orders in thin books
- Check network/memo tags
- Confirm fees & slippage
Use our Position Size and Profit Calculator to turn the plan into numbers.
Position sizing: the first filter
Most traders risk too much per idea. A few bad trades in a row can wipe out months of work.
Common mistake
- Sizing by "what feels right" or going all-in on conviction trades
- Using the same dollar amount regardless of stop distance
- Ignoring leverage multiplier on risk
Better approach
- Define max risk per idea (0.5–2% of capital)
- Calculate position from: risk ÷ (entry − stop)
- Reduce size when uncertain or volatility is high
Tool: Use the Position Size calculator to work backward from your risk tolerance.
FOMO & overtrading
Fear of missing out drives impulsive entries, revenge trades, and constant position shuffling.
Symptoms
- Entering after a breakout has already moved 20%+
- Opening a new trade within minutes of closing the last one
- Switching coins mid-session because "this one is moving faster"
Fixes
- Set a max trades per day/week rule and stick to it
- Wait for your setup; if it doesn't appear, do nothing
- Track quality over quantity: win rate and R-multiple matter more than trade count
Reality check: Missing a move is not a loss. Chasing it and getting stopped out is.
Stops & risk management
No stop = unlimited risk. Moving stops after entry = emotional trading.
Common mistakes
- No stop at all, hoping price "comes back"
- Moving stop further away when hit to "give it room"
- Placing stop at obvious round numbers where everyone else has theirs
Best practices
- Set stop before entry based on structure or volatility
- Only move stop in profit direction (trailing)
- Place stops beyond key levels + spread/wick buffer
If you're tempted to move a stop-loss wider, ask: "Would I enter this trade fresh at this price?" If not, exit.
Fees & slippage
Small fees compound fast. Slippage in thin markets can turn a 2% edge into a loss.
Hidden costs
- Maker/taker fees: 0.1–0.5% per side adds up on frequent trades
- Network fees: Gas spikes during volatility; batch transactions when possible
- Spread: Bid-ask gap widens in low liquidity
- Slippage: Market orders in thin books fill worse than expected
Mitigation
- Use limit orders instead of market orders when not urgent
- Factor fees into breakeven: use Profit Calculator
- Avoid trading during low-volume hours or on illiquid pairs
Journaling (the unsexy edge)
Without a log, you repeat mistakes and forget what worked. A simple journal beats hope and memory.
Minimal fields
- Date, asset, entry/exit, quantity
- Stop, target, actual result
- Thesis (1-2 sentences: why this trade?)
- Lessons (what went right/wrong?)
Review rhythm
- Daily: Quick notes after each trade
- Weekly: Identify patterns (which setups worked?)
- Monthly: Adjust rules, refine edge
Simple start: A spreadsheet with Date | Pair | Entry | Exit | P/L | Notes is enough.
FAQ
Is this financial advice?
No. This guide is educational only. Always do your own research and consider consulting a qualified advisor.
Should I always use stop-losses?
Stops are a core risk tool. The exact placement depends on volatility and your thesis. Many traders risk 0.5–2% per idea.
How do I know if I'm overtrading?
If you're opening/closing positions without a clear plan, revenge trading after losses, or feeling exhausted, you're likely overtrading. Set a max trades-per-week rule.