Seven Deadly Trading Mistakes Every Rookie Makes

Trading’s Deadliest Sins
The following advice will be sneered at by more seasoned traders, but hand on heart, who can say they have never committed any of the following? The mark of a great trader lies in their ability to learn from their rookie mistakes. To become great, first you must become humble, and there’s nothing more humbling than buying a pumped cryptocurrency at the top, bragging about the sick gains you’re about to make and then getting rekt.
Chasing P&Ds
Watching a vertical green candle shoot skyward is one of the most pleasurable sights a trader can see – provided you bought at the bottom. If you don’t have a horse in the race, however, the envy can be overwhelming. It’s all too easy to FOMO hard and pile in with everything you’ve got. Occasionally it’ll pay off; more often than not it’ll leave you in a fetal position on the floor.
Buying Into Illiquid Markets
For your coin to go up in price, it needs to have someone else willing to buy it. The trouble with many emerging altcoins and many small exchanges is that they have extremely small order books. You may be convinced that Sprouts (SPRTS) is the future of cryptocurrency, but unless enough other traders share that sentiment, you risk being lumped with a coin that no one is willing to buy, or at least not at the price you’re seeking.
Setting the Wrong Price
Hands up if you’ve ever misread a zero when setting up a trade, set your sell order 10x too low and had your coins gleefully snapped up? When you’re dealing with altcoins that are priced in fractions of a bitcoin, it’s an easy mistake to make: you think you’re setting a sell order for 0.0000457 BTC only to discover that you actually placed it at 0.00000457. Most exchanges will fill your order for the highest bid on the orderbook at the time, sparing your blushes. Some sites, however, such as Etherdelta, aren’t so accommodating. Always double-check the buy or sell price you’re setting before you hit the execute button.
Sending the Wrong Coin to an Exchange Wallet
If you’ve mistakenly sent bitcoin cash to a bitcoin wallet, don’t bank on your exchange bailing you out. Some will, but the larger exchanges are unlikely to ride to the rescue. It’s your responsibility to check before sending funds to an exchange wallet, as mistakes are almost impossible to rectify. Other rookie mistakes include sending ethereum tokens to an ethereum exchange wallet, or requesting mining pool rewards be paid straight to an exchange. Don’t do that.
Revenge Trading
You’re pissed because you backed out of buying a coin at the last moment and it then mooned. Or you bought a dead cert – an absolute banker – and it flopped. Angry, you pile everything you’ve got into the next coin in the green and try to ride that train to Profitville. In doing so, you’re overexposing yourself and entering a market that you have failed to research. What are your entry and exit positions? Why is the coin rising in value? You have no idea, because you’re acting on raw emotions. Revenge trading is the equivalent to catching your partner in the arms of another and then blindly throwing yourself at the first thing you can find to ‘even the score’. 9 times out of 10 it’ll all end in tears. The more you can disassociate your emotions from your trading, the better you’ll become.
Overtrading
Just as too many cooks spoil the broth, too many trades spoil your gains. It’s an easy trap to fall into, and one that every novice trader makes. You buy a coin and wake up the next day to find it’s risen by 20%. Better sell, right, and cash in your profit? Not necessarily. As the mantra goes “Cut your losses and let your winners run”. Selling an asset simply because it is in profit is a simplistic trading strategy that’s liable to rob you of some of your greatest gains. There’s nothing more frustrating than selling a coin at a modest profit only to watch it appreciate 10x. Overtrading to collect minuscule gains will also see an increasing amount of your assets eaten up by exchange fees.
Overconfidence
On a hunch, you buy a coin and watch it double in price over the course of the next week. You repeat the process with another coin and the same thing happens. You are the bomb. You’re the man. Everything you touch turns to gold. On a roll, you pile into your next pick, which you can just sense is ready to moon. And then…and then it dumps. What happened? You got cocky, that’s what.
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