Learn How To Trade Like A Pro

Successful
Crypto Trading

The 10 Mistakes
Which Will
Make You Lose!
 As we all know, crypto trading can be highly profitable in very short time –
compared to other assets. However, trading is a skill which has to be lear-
ned – somewhat like playing poker profitably.

Beginners with no trading experience tend to make the typical beginners

mistakes, which soon lead to more and more losses.

Simply knowing about those mistakes and not doing them ever again are the
first step to becoming a successul crypto trader who‘s able to build wealth
by trading – Don‘t let those errors hold you back from making money!

1 Chasing The Price – Wrong Entry

Often new traders have just recently heard about cryptotrading from a
friend who has had great profits and who‘s talking about those exciting
cryptocurrencies.

Those newbies tend to jump randomly into trades, when they see a rising
price on a chart. Like „oh, this coin has pumped 38% over night - it will for
sure go further – the chart looks promising! My friend also made 200% pro-
fit with it..„

It even often happens that they buy around the aspex before price dumps
again with no further pump soon. Unfortunately those traders don‘t even get
out early again when price falls.

Afterwards such new traders see price decend over days or even weeks till
they can‘t stand it anymore and sell low.

If this scenario sounds familiar to you – make sure you don‘t randomly jump
into pumps anymore.

This unprofessional behaviour is also called „FOMO„ in trader circles – fear

of missing out – which is like a mean desease among beginners.

–1– © http://www.cryptotradingbook.com
 Examples of too risky entry areas when chasing price

2 Not Using A Stop Loss In Every Trade

What new traders often

don‘t know, is that a stop
loss is not just an optional
order type which experi-
enced traders use from Profit
time to time – it‘s obliga-
Reward
tory for each trade from a
professional point of view.

Professional traders use

a stop loss in every trade,
as a clear decision about Entry
the loss they are willing Risk
Stop loss
to take is as important as
their plan where to take
profit.
Example of stop loss position

–2– © http://www.cryptotradingbook.com
3 No Concrete Idea About Risk:Reward Ratio In
Each Trade

When a professional trader enters a trade, he knows exactly how much

potential loss he might have to accept compared to the potential profit he
might be able to take.

The loss should be relatively small to the protential profit. The loss can ob-
viously only be guaranteed to stay small by using a stop loss order.

Not knowing these areas of stop loss and potential profit areas in advance
is the typical behaviour of beginners who don‘t have a plan for their trades,
which will soon lead to constantly losing money.

4 Trading With Too Big Amounts In Single Trades

Beginners with little to no trading experience and knowledge tend to put

way too much of their whole trading capital in one single trade.

As each trade always includes a risk, it‘s simply a numbers game how much
of your whole capital you should risk each time. Too much capital in single
trades can lead to a massive reduction of the whole trading capital in short
time. But that‘s what often happens to beginners. Professional traders don‘t
do that.

Traders shouldn‘t take more then a few percentages of their whole trading
capital for a single trade. Max. 5%. So if you take 5% of your whole trading
capital and the risk of this single trade would be 10% (meaning you put
your stop loss at 10% below your entry), then it would be a 0,5% loss for
your whole trading capital. (10% of 5%)

On the other hand, if the trade becomes a success and you could take let‘s
say 150% or even way more profit, you‘d have gained at least 7.5% on top

–3– © http://www.cryptotradingbook.com
 of your whole trading capital at once, which is massive. Tell that to a Forex
or stock trader..

Just imagine you could catch a couple of such pumps and would be able to
take profits from 100% to maybe even 500%, your whole trading capital
would be doubled fast, even while sometimes being stopped out with the
small losses as described.

There might be traders who got rich with a few trades or with maybe even
one big trade where they had put all their capital in this one single pump
of 3000% or so, which then luckily occurred. But that‘s like winning in the
lottery and the concept behind it is gambling, without risk management.

You see the risk to do that: If such a pump doesn‘t happen and price even
falls, the trader has to take a loss of a few percent of his whole trading capi-
tal when having put a stop loss wisely.

Another problem is, when you put all your money in one single trade, you
are completely dependent from this certain coin to pump. If it doesn‘t pump
very soon, your capital keeps stuck in this trade while you wait for the
pump, which maybe happens next year or never like expected.. or you just
get stopped out with a relatively high loss, compared to losses when using
less capital for single trades.

Hopefully you get the idea of risk management by not using too much capi-
tal at once.

5 Become Cocky After A Few Successful Trades

A big common mistake: Enhancing the amounts for single trades (percenta-
ge of the whole trading capital) after a few gains in a row, because of thin-
king „wow, it‘s easy“ and „I‘ve already got how it works..!“

We‘ve seen traders who did it correctly at the beginning: In their first tra-
des, they used only small amounts of their trading capital.

Let‘s say one had 8 BTC and he would only use 0.1 BTC for a trade, which

–4– © http://www.cryptotradingbook.com
 is fine. Fortunately a couple of trades
immeditaly got very profitable and the
trader felt happy and had gained confi- 1 Trade
dence.
1 Trade
Out of this confidence he thought that
it seems pretty easy to make money in Trading Capital
crypto – so he decided to take bigger
amounts. As he had been able to at least
double his 0.1 BTC each time – he could
also double a whole Bitcoin or more –
Enhancing percentage of capital for single trades
right??

With this conclusion in mind, he started to take entire Bitcoins for trades,
which meant a dramatic increase of the percentage of his whole trading
capital risked in single trades.

Now guess what happened? After short time the trader reduced his entire
trading capital to less than 50%, so 8 BTC soon wheren‘t more than 4 BTC,
and continuing to fall as his capital was stuck in altcoins which just went
further down continuously.

So the trader sees his capital dwindle each day, hoping for future pumps to
at least get his capital back.

Breaking basic rules because of becoming cocky after a few successfull tra-
des is a very bad idea!

6 Not having a Plan for the Trade

Having a plan includes the ability to answer ALL of these questions in de-
tail:

- What different technical analysis signals tell you that there is a

good entry?
- Why do you enter at that specific price and not higher or lower?
- How long do you expect your trade to last?
- Where do you put your stop loss?

–5– © http://www.cryptotradingbook.com
 - What‘s your risk:reward ratio?

Professional traders know all these details in advance, as they are crusial
for successful trading. Beginners often act without clear plans and wonder
why they lose too much money overall instead of buildig wealth.

„ „
7 Believing or even Feeling that Price will go
up and not just using Technical Analysis

Beginners often think that they see where price will go in a chart, because
the few other experiences they had with charts looked alike – so „this one
will for sure do the same“..

That‘s of course simply the way how human brains function. Past experi-
ences lead to subconcious biases about future circumstances. That‘s how
humans generally learn things and try to understand the world.

If you are a trading beginner and have just seen a hand full of price charts
in your life, which might all even have looked alike more or less – of course
you‘ll think the next chart will again unfold the same structure.

Or the beginner sees a recent pump in a chart and expects price to pump
soon again, because for his eye this would just fit so much into the picture
of the chart...

And these biases are fatal as they lead to imprudent and unprofessional
behaviour.

Beginners have to learn that they can never be sure about price movements,
especially guessing price out of feelings or in comparison with other charts
is a strategy for losing money asap.

Only technical analysis can deliver signals for potential trades. TA is for
estimating likelyhoods for price movments. If price movement in a certain
direction looks way more likely than in the other direction, we have the cir-
cumstances for a trade entry. Still there won‘t be a 100% guarantee that the

–6– © http://www.cryptotradingbook.com
 chart will unfold like expected – that‘s again why traders include the stop
loss in their trading setup.

8 Confusing Investing with Trading

Traders with no real idea just buy, without a concrete trading plan behind
the purchase, and hold, expecting the price to go up soon/further, to any
good looking high profit target.

That happens to people who are completely new to trading and who haven‘t
invested the time yet to learn how profitable trading works. They just think
that trading is something where you buy an asset and sell it higher. Which is
true, of course – but that‘s pretty much all they know.

Just buying altcoins and waiting for future pumps because the trading be-
ginner thinks the coins always have to pump again soon.. that‘s not trading.
It‘s investing, and even not smart in that field. Conciously investing in an
altcoin, hoping for a higher future price, means that the investor should
have an idea about the coin – the concept and the fundamentals. Altcoins
can easily lose their value at all and disappear if the concept turns out to be
useless for whatever reasons.

Trading means actively buying and selling to take tangible profits within
certain timeframes and not just hold.

9 Listening To The Crowd‘s Trade Alerts

Be very careful with using Twitter or other social media for advice and trade
alerts. When everybody shouts that a certain coin pumps soon, it likely
won‘t happen like that.. Example – all the tweets about Dogecoin going
Moon in end of May / June 17. Let‘s make it short: Doge didn‘t pump again,
the chart had already had it‘s top before.

–7– © http://www.cryptotradingbook.com
 People who recommend coins and talk about pumps coming soon mostly
just want to support their own trades. They‘ve just bought certain coins
themselves and are trying to activate the crowd for the pump they want to
see. That can even be a lot of people at the same time, so you might think
that if everybody talks about a coin pumping soon, it will. Just don‘t be sur-
prised if it doesn‘t.

If your TA tells you that there is a possible trade, then you should enter it,
but not because ot the crowd shouting for it.

10 Trading in a bad Mood

Trading is a rational business which shouldn‘t be influenced by feelings.

Beeing in a bad mood means you shouldn‘t trade in that moment or on that
day. As you are human and not a robot, a bad mood can influence all you do
in a negative way. We‘re more likely to make mistakes or wrong decisions
when we feel bad, due to not beeing concentrated and seeing things with a
negative bias.

So beeing emotionally down, stressed, sick, not concentrated, feeling unpa-

tient etc. are circumstances where you should better do something good for
yourself – take a nice bath, relax, get a massage, call a friend, do sport or
watch your favourite series. Better don‘t do trading business.

Now you know the crucial mistakes which hold new traders back from being
successful. Hold on to those basic rules and have fun with trading. We wish
you massive gains!

Cheers!

–8–
© http://www.cryptotradingbook.com
Information:

This ebook is a production of cryptotradingbook.com.

Chart Images:

© Tradingview.com

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