Summary

The article discusses common cryptocurrency trading mistakes that can lead to financial loss and anxiety, emphasizing the importance of careful planning, risk management, and avoiding impulsive decisions.

Abstract

The content outlines five critical mistakes that cryptocurrency traders often make, which can result in significant financial loss and sleepless nights. It underscores the importance of trading with a plan and only with funds that one can afford to lose. The article warns against succumbing to fear of missing out (FOMO), such as jumping on trends without proper analysis, and advises against day trading Bitcoin on short timeframes due to its unpredictability. It also cautions traders about the risks of using high leverage and neglecting risk management strategies, suggesting that these practices can lead to increased stress and potential liquidation. The author, referencing a successful trader known as Satoshi Flipper, advocates for a more strategic approach to trading, including the use of low leverage and well-planned hedges to mitigate losses.

Opinions

Satoshi Flipper, a reputable cryptocurrency trader, claims that only about 5% of traders make money trading Bitcoin and other cryptocurrencies.
Inexperienced traders often trade with money they cannot afford to lose, leading to stress and poor trading decisions.
The article suggests that traders should not enter positions that cause them so much stress that they cannot sleep, indicating that such trades are likely unwise.
It is recommended that traders allocate a portfolio that is about 10% of their total net worth to avoid overexposure.
The author criticizes the tendency of traders to act on FOMO, as seen in the DogeCoin pump initiated by a TikToker, which led to significant losses for latecomers.
The article dismisses day trading Bitcoin on short timeframes like the one-minute chart as ineffective and akin to gambling.
High leverage trading is seen as a recipe for disaster, increasing the likelihood of liquidation.
The importance of risk management is emphasized, with successful traders using strategies like low leverage, massive capital, and well-planned hedges to protect against losses and ensure a good night's sleep.
The author promotes the idea that in a bull market, the focus should be on profit while managing risk appropriately.

This Cryptocurrency Trading Mistakes Will Give You Sleepless Nights

5 things every cryptocurrency trader should avoid

A guy known as Satoshi Flipper on Twitter once made a bold claim that only about 5% of traders actually make money trading Bitcoin and other cryptocurrencies.

“Yo, crypto fam,” he continued, “I know most of CT (Crypto Twitter) is broke; most of you are morons who trade on impulses!”

I knew Flipper was right, but I thought no one else would tolerate his tirade.

I was wrong.

Flipper’s claim was backed by almost everyone. He has over 65k followers on Twitter. And he’s a successful cryptocurrency trader by all standards.

I say he’s successful because he sometimes gives a sneak peek into his trading performance, which also makes him by far the most honest crypto trader I have seen across the internet.

Thing is, trading cryptocurrencies is hard.

Yet many people still believe it's a sure way to riches.

But I’ll tell you this, if you open a trading account and jump into a trade without a plan, your money will vanish as you watch.

As a matter of fact, you’ll be so anxious, you won’t sleep one bit.

We’ve all been there too many times, babysitting the charts hoping a trade will go our way.

Despite all the effort and sleeplessness, only a few traders get lucky. The majority lose all their money with one single trade.

If you want a glimpse of how much money people lose every day, there are several platforms which offer information specifically on cryptocurrency futures trading for free.

On Twitter, my favorites are WhaleTrades and WhaleAlerts. On the web there’s Bybt.

And now, if you still want to know the trading habits that cause sleepless nights, please carry on.

Going all in knowing well you can’t wait it out

If it’s giving you anxiety, it’s a bad trade and it’s about to keep you up all night.

If you enter trades which make you so stressed that you can’t sleep, those are probably trades you should never have entered in the first place.

This mostly happens because inexperienced traders trade with money they cannot afford to lose and its only natural to lack patience to wait it out in that kind of situation.

You can bear me witness that trades go south most of the time. And when the market is bullish, the journey to the moon is not supersonic.

I’d want you to imagine something like scaling the Towel of Babel.

So, if you’ll survive this kind of journey, you’ve to pack a load you can manage.

In other words, ensure you have a trading plan and allocate a portfolio, which represents a percentage of your total net worth that you can actually afford to lose.

Investment experts recommend allocating a portfolio that’s about 10% of your total net worth.

Jumping on the pump wagon

If you’re a true cryptocurrency fan, you definitely know there was a TikTok hype to send DogeCoin to the moon early July. Even I couldn’t miss writing an article about it.

The hype was initiated by a TikToker by the name of James Galante.

First responders who bought in immediately after James made the call to get rich with DogeCoin raked crazy profit as the hype caught on.

This is what they witnessed.

Dogecoin goes vertical after TikTok hype. Image: Binance

As usual, there were latecomers who jumped on board while the meme coin’s rocket was running out of fuel.

And as expected, they fell from the sky like a rock.

Whoa, a reversal on the same chart. Image: Binance

As we have seen, DogeCoin’s pump and eventual dump is a good example of traders acting on fear of missing out.

And when traders act on FOMO, they can’t sleep until they are totally sure they have lost all their money.

Trading the one minute Bitcoin chart

Day trading Bitcoin is a thing with rookie traders. And they love trading the short term range.

But tell you what, this is like having a crush on someone who can never love you back.

If you enter a long BTC position, the screens will likely turn red.

And the reverse is true.

In the end, you’ll toss and turn all night, when it hits you were actually playing Russian roulette with your money.

Trading with high leverage

Higher leverage with less capital equals no sleep. Correct?

This was once my trading strategy. Image: Binance

When traders discover futures trading and leverage, they go nuts.

They are willing to risk significant sums of money in the hope of making a killing.

The only catch is you will never be a hundred percent sure which direction Bitcoin will go.

By trading with high leverage, you only increase the probability of liquidation.

Trading without risk management

You might actually do all the things listed above and walk away unscathed if you employ thoughtful risk management strategies.

But most cryptocurrency traders either ignore or are totally unaware of risk management practices.

This is something that Flipper always insists on his Twitter followers. He stresses that his success comes from carefully planned trades and effective risk management.

Flipper also uses relatively low leverage (6X leverage)backed by massive capital and well-planned and executed hedges to offset potential losses.

When trades are backed by proper risk management, Flipper says, he’s able to sleep comfortably because he’s assured he cannot get liquidated.

Remember we are in a bull market, the plan is to earn profit and not to lose money. Manage risk appropriately. The writer trades cryptocurrency.

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