Neglecting to Do Your Own Research

Investing in Fear of Missing Out

Not Strategizing

Overtrading

Not Using Risk Management Tools

Trading With Emotion

Overlooking Platform Security and Risks

Expecting Guaranteed Returns

Ignoring Portfolio Diversification

Using High Leverage Too Early

To Sum Up

Frequently Asked Questions (FAQs)

The crypto market has gained a reputation for being 'too risky', with either being promised big gains or huge losses. Crypto trading has recently been trending with worldwide acceptance due to financial independence, access to the global digital economy, and 24/7 trading. Following the trend, many beginners like to jump in without a strategy and lose money, not because the market is risky, but because they unknowingly repeat avoidable mistakes. 

The market is full of opportunities if you learn how to benefit from it strategically, or else you learn the hard way. BitNasdaq, the best cryptocurrency exchange platform, performed deep industry research to draw the 10 most common mistakes crypto beginners make and how to avoid them.

• Neglecting to Do Your Own Research

This is one of the most common mistakes a beginner can make. Most traders buy coins because they are trending on social media without doing research about the utility of the coin, without understanding its tokenomics or reading its whitepaper, community engagement, or even its on-chain data. Going for coins hyped up by influencers or social media trends only leads to buying undervalued and unsustainable coins. 

How to avoid them: 

• Always research the project, its whitepaper, vision, risks, and the problem it solves

• Understand its market demand and long-term value

• Find reviews from independent sources

• Always make sure the project isn’t short term ‘pump’ token

Research builds confidence by turning emotional guesses into informed decisions where you actually understand your investment. 

• Investing in Fear of Missing Out

The second most common mistake is that most beginners buy coins when they’re at their top, only to see the coin crash soon afterwards. This impulsive trading comes from the fear of missing out on profits. Social media also plays a part in highlighting the coins with inexperienced traders chasing every 'pump', leading to higher transaction costs, stress, and loss. 

How to avoid: 

• Always try not to invest in skyrocketing coins 

• Don't follow social media trends or 'pump' posts. 

• Do your own research and strategize 

• Not Strategizing

Trading is all about strategy, whether it's the stock market or crypto. The only difference is that the crypto market moves way faster. Jumping in and out of trading randomly or based on social media hype will only result in a loss. 

How to avoid:

• Always set an entry and exit price

• Always plan beforehand how much you are willing to risk

• Know your profit target

• Be clear about your expectations

• Overtrading

Inexperienced traders often have the belief that if they invest in every breakout or pump and chase every move, they will get more profit. However, in crypto, most profits come from patience and understanding market conditions rather than constant trading. Overtrading often results in excessive transaction fees, stress, and poor/emotional decisions

 How to avoid:

• Always go for quality of projects over quantity 

• Never invest due to the fear of missing out or pressure

• Always strategize your entry and exit points 

• Always go for long-term growth rather than short-term pumps

• Not Using Risk Management Tools

The crypto market is a volatile market where even strong traders aren't safe if they don’t manage risk smartly. Going all in, not setting stop losses, using high leverage, or completely investing in just one coin can blow up most accounts. Chasing high rewards means high risk. Risk management is not optional; it protects you from crashes where your emotions can't. 

How to avoid: 

• Never invest all of your funds in one go

• Always set a stop loss

• Always use low leverage if you are inexperienced 

• Diversify into multiple coins instead of just one

• Trading With Emotion

Crypto markets are highly volatile, and emotional decisions can result in a major downfall for an inexperienced trader. These trades often demand patience and discipline. Excitement, greed, or even fear can result in panic buying/selling, chasing profits during pumps, or unnecessary hodling. Small mistakes can lead to bigger losses. 

 How to avoid: 

• Always follow a predefined strategy 

• Be clear about your entry and exit points

• Don't panic-sell or buy impulsively 

• Don't follow social media trends

• Always log trades, maintain journals, and review the performance of your investment 

• Avoid trading when stressed, angry, excited, or emotionally not stable

• Overlooking Platform Security and Risks

Overlooking platform security is another major reason why many beginners lose their funds. They risk hacks, phishing, scams, or losing access to their funds by ignoring 2FA, using weak passwords, choosing weak platforms, and investing in weak wallets. 

 How to avoid: 

• Always enable 2FA

• Always use strong passwords 

• Always choose trusted exchanges/platforms

• Always use cold wallets for better security 

• Be cautious of scam links, phishing schemes, shady offers, and pump and dump schemes

• Expecting Guaranteed Returns

Beginners are attracted to crypto usually after hearing overnight success stories, which are mostly not true. Success in crypto requires discipline, patience, and long-term strategizing. Expecting fast returns can make new traders impatient and emotionally invested. Such traders take unnecessary risks, invest large amounts of funds, and chase pumps. 

 How to avoid: 

• Always be patient with your investment 

• Don't fall for short-term pumps

• Bring discipline and consistency in your trades

• Do your research on the project and strategize accordingly 

• Ignoring Portfolio Diversification

Inexperienced and under-researched traders always tend to invest their entire funds into one famous coin like BTC. Such coins come with high returns but also high risks. Diversifying your portfolio by investing in different coins can help protect you from sudden crashes. Also, investing in stablecoins avoids market volatility. 

How to avoid: 

• Spread your investments across different sectors ( large-cap coins, mid-cap, and small-cap)

• Invest in stablecoins (USDT/USDC) for liquidity 

• Move profits to stablecoins and then use stablecoins to re-invest

• Try staking or HODLing for long-term returns

• Avoid investing only in volatile assets

• Using High Leverage Too Early

While leverage looks like an attractive option to multiply returns, it can also multiply losses at the same speed. Inexperienced traders often fall for this advanced tool without understanding the risks of liquidation. 

How to avoid: 

• Never start directly with futures trading 

• Always keep leverage low (1-5x) 

• Do your research and learn strategies before using leverage 

Use BitNasdaq's demo account to practice before investing real funds

To Sum Up

The cryptocurrency market is a highly volatile market that is full of opportunities but also high risks. Most new beginners don't understand the market dynamics and trade emotionally, without a clear plan, without market and project research, avoid security measures, fall for traps and pump schemes, and eventually losing all of their hard-earned money. To avoid these mistakes, always: 

• Research every coin before investing 

• Plan and follow a clear strategy 

• Use risk management tools like a professional 

• Understand market dynamics 

• Use BitNasdaq's demo account for practice before investing real funds

• Don't let emotions overwhelm your thinking 

• Secure your funds with BitNasdaq's 2FA and cold wallets

• Trade with discipline and consistency 

• Don't blindly follow social media trends

Becoming an experienced and confident crypto trader is not a one-day job. It requires years of discipline and consistency. Every avoidable mistake can save you from major loss. Lastly, there are no shortcuts to crypto trading. 

Log in to BitNasdaq for a secure trading experience. 

Frequently Asked Questions (FAQs) 

What security measures are available on BitNasdaq?

BitNasdaq is one of the most secure and trusted crypto exchanges due to its security measures like KYC for customer identification and 2 Factor Authentication (2FA), which protects your accounts from hacks and loss of funds. 

How much money should a beginner start investing with?

As a beginner, a trader should always start with an amount they can afford to lose. Use this amount to understand market dynamics, strategize, and build confidence to avoid any financial risks.

Is leverage trading recommended for beginners?

As a beginner, one should always avoid leveraging and futures trading. Start with spot trading and learn market behavior. Once you are experienced and confident, you can start leveraging with small amounts i.e. 1-5x. Leveraging comes with liquidation risks.