10 Common Crypto Mistakes To Avoid For Traders & Investors


Crypto has been in the spotlight for many years now and has found its way into the minds of most traders and investors. However, trading and investing in crypto assets can be challenging, especially for those new to the market.

While there is a lot of potential for profits in the crypto market, it’s essential to be aware of the mistakes traders and investors commonly make. In this blog, we will explore some of the most common mistakes that crypto traders and investors make and discuss how you can avoid them. From buying high and selling low to failing to research before investing, we will cover a range of crypto trading mistakes to help you make more informed decisions and succeed in the world of crypto. 

What Mistakes Do Most Crypto Traders Make?

Ignoring Trading Costs

As a trader, you may make dozens of trades in a single day. But you also pay a transaction fee to the exchange each time you make a trade. Over time, these costs can add up and start to cut into your profit margins. Some payment providers may also charge you for each time you deposit or withdraw funds from your trading account. 


While leverage trading is a strategy that can net you astronomical returns, it is definitely not recommended for beginners. Just as your gains are higher with leverage trading, so are your losses. One wrong trade can multiply your losses and even trigger a “margin call” where you must repay funds or your positions are closed. 

Read more: Futures Trading Vs Margin Trading

No Trading Strategy

Trading without a pre-set strategy can lead to significant losses. A strategy allows you to systematically define how to pick tokens, when to buy and when to sell them. This is also a reproducible method that makes future choices of investments easier to make. 

Read more: Crypto Trading Strategies

Independent Decisions

No trader wants to lose money on any trade they make. However, you mustn’t let losses in one trade influence your risk appetite in other trades. You may be tempted to take on riskier investments to recoup your losses faster, but this is a surefire way to lose even more money in the market. 

No Effective Tracking

As a trader, you need to be able to track your portfolio effectively. This includes a benchmark return you target, tracking your returns in percentages and regularly studying the state of the market to better understand how your portfolio compares. 

What Mistakes Do Most Crypto Investors Make?

Lack of Research

Many investors enter the crypto market without adequate research, relying solely on tips from others. It is crucial that you thoroughly validate any information you come across before investing your money into a project. Failing to do this can lead to falling for scams or pump-and-dump schemes. 

FOMO Buying

Fear of Missing Out is a common phenomenon seen in many financial markets. This is especially true in a rapidly growing market like crypto, where tokens can rise more than 100% in a short duration. But you must still analyse the project before investing to understand where the project’s value comes from and if it can sustain its growth. 

No Benchmarks

Seeing an investment’s value rise consistently feels very rewarding. But if you don’t set a benchmark return, greed can set in and make you hold your investment for longer than necessary. When you buy a token, decide on a price target at which you will sell it. Any additional returns may be a nice bonus, but overcommitting to it can lead to significant losses. 

Losing Keys or Seed Phrases

Your crypto wallet is your key to the blockchain and your tokens. Losing your private key or the seed phrase can be disastrous, as it means you no longer have access to your holdings. Always store your seed phrases carefully to ensure your assets are not compromised. 

Not Studying the Market

No investor’s job is complete without understanding the state of the market at large. While you must look into your invested projects in detail, it is also essential to study general market trends. 

10 Crypto Trading and Investing Mistakes to Avoid


Making large investments without proper diversification or risk management, and overestimating your abilities is not advised. Always practice proper portfolio management for stable returns.

Emotional Investing

Allowing emotions to drive investment decisions leads to irrational decision-making during market fluctuations. Do not let how you feel dictate your investment decisions, as this can lead to inconsistencies in your choices.

Lack of Patience

Crypto is a long-term investment, and it takes time to see significant returns. Expecting quick profits and panic selling during market corrections or dips, without considering long-term potential can be detrimental to your portfolio. 

Holding all your assets at one location

Always store your assets in multiple locations such as exchange wallets, hardwallets and other safe online wallets.

Ignoring Technical Analysis

Technical analysis can help traders identify trends, support and resistance levels, and potential market movements.

Not Using Stop-loss Orders

Not using stop-loss orders to protect investments leads to significant losses during market downturns.

Not Conducting Fundamental Analysis

Only seeing the price history of a token is not enough to decide on an investment. You must look into the team behind the project, its features and community engagement across social media to determine its worth. 

Lack of Crypto Knowledge

Trying to invest in crypto without knowledge of how projects and tokens work is purely speculation and will not lead to significant returns. You must learn about how crypto works to understand why one project may be better than another. 

Complicated Strategies

Beginner investors may be tempted by the opportunities presented by more complex trading strategies like crypto options trading and multi-token swaps to earn higher returns. But if you are not familiar with the market and the tools you use, it can cause more harm than good for your portfolio. 

Not Forming Your Own Opinion

Finally, the main benefit of equal access to information in the market is that you get to form your own opinions. Thus, your belief of a token’s future may be vastly different from that of others. But if your judgement is well thought-out and based on facts, trust your decisions. 

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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The views, thoughts, and opinions expressed in the article belong solely to the author, and not to ZebPay or the author’s employer or other groups or individuals. ZebPay shall not be held liable for any acts or omissions, or losses incurred by the investors. ZebPay has not received any compensation in cash or kind for the above article and the article is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.

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