Brothers, the market has recently warmed up a bit, and a new group of "new investors" has rushed in! Yesterday, a fan told me he bought a small cryptocurrency recommended by a "big shot," invested all his savings, and even leveraged it, claiming he wanted to "turn his life around." After reading that, I couldn't help but sweat for him—this isn't trading coins, it's gambling with your life! As someone who has been in the crypto space for 8 years, I can responsibly say that the vast majority of people lose money in crypto not because they don't understand the market, but because they make some basic risk mistakes. Today, I'll summarize the 5 deadliest risk mistakes in the crypto space; see how many you fall into, and if you have two or more, stop and reflect!
The first mistake: investing all funds in cryptocurrency, even borrowing money or using leverage to trade coins. This is the most fatal mistake, without exception! I have seen too many people dump their house money and retirement savings into the market. Some even borrow from online loans or use credit cards to trade coins. When the market drops, they not only lose everything but also end up with huge debts. I must emphasize that cryptocurrency is a high-risk investment and should only be played with 'disposable income', meaning money you can afford to lose without affecting your normal life. As for leverage, beginners must stay away, even from 1x leverage; leverage is like a double-edged sword, amplifying both profits and losses. Many seasoned players have fallen victim to leverage.
The second mistake: blindly following others to buy coins without doing any research. Many people now buy coins solely based on recommendations from others, either from 'experts' in WeChat groups or from 'analysts' on various short video platforms. They buy whatever is recommended without knowing what the coin does or whether the team has the capability. This approach is highly risky; many so-called 'recommendations' are traps, where they pump up the coin so you buy in, and then they secretly sell off their holdings, leaving you stuck at a high position. My approach is to spend at least 3 hours researching before buying any coin: read the white paper, check the team background, understand the project's implementation status, and analyze market demand. If there is any issue in any of these areas, I pass.
The third mistake: ignoring liquidity risks and buying some 'zombie coins'. Many beginners like to buy low-priced small coins, thinking that 'cheap means there’s room for price increase', but they don't realize that many low-priced coins have no liquidity, meaning that once bought, they can't be sold. I once saw a fan buy a small coin priced at 0.001 yuan. It was easy to buy, but when he wanted to sell, he found that the total quantity from sell one to sell ten was less than one-tenth of what he held, making it impossible to sell, and he could only hold onto it. Therefore, when buying coins, everyone must consider liquidity, at least looking at the 24-hour trading volume. I won't mention mainstream coins; for small coins, the 24-hour trading volume should be at least over 100 million, and it should be distributed across multiple trading platforms to avoid situations where you can't sell.
The fourth mistake: frequent trading, chasing highs and selling lows. Many people think that because the cryptocurrency market is volatile, frequent trading will earn them more money. As a result, they make dozens of trades in a day, spending a lot on transaction fees, and end up losing money. I have done statistics, and 90% of the people I know who trade frequently are losing, while those who hold mainstream coins, invest long-term, and trade infrequently mostly make money. Although the crypto market is volatile, it also has strong trends. As long as you choose the right direction, holding long-term is more profitable than frequent trading. Moreover, frequent trading can easily disrupt your mindset; you chase after prices when they rise and sell when they fall, completely driven by market emotions, ultimately becoming a 'buy high, sell low' trader.
The fifth mistake: ignoring the macro environment and only focusing on candlestick charts. Many people only look at candlestick charts when trading coins, believing that 'technical analysis can solve everything', but in reality, the cryptocurrency market is greatly influenced by the macro environment. Factors like the Federal Reserve's interest rate hikes, global economic conditions, and changes in regulatory policies can have a huge impact on cryptocurrency prices. Last year, the Federal Reserve raised interest rates continuously, leading to a disastrous decline in the entire crypto market. No matter how skilled you are at technical analysis, it doesn’t matter in the face of a major trend. Therefore, everyone should pay more attention to macro news, such as the US dollar index, inflation data, and regulatory dynamics. If any adverse signals appear, timely reduce your position to avoid risks.
As long as you make one of these 5 mistakes, it indicates serious issues with your risk control, so adjust quickly. Trading coins is not gambling; it's a practice that requires patience and discipline. Only by managing risks well can you survive in this market for the long term. If you find this article useful, follow me @链上标哥 so you don't get lost!
