Trading is a complex matter to understand, it needs a deep understanding, more time to practice, and a lot of dyor before it must be executed. Trading comes with understanding the candlestick, indicators, learning technical analysis, and the fundamental of certain assets one wants to trade. It is not a one-day game to play, one must possess a lot of patience and more time to learn it.
In this article, I want to show you some common mistakes of noob traders on leverage. This is based on experience, although I am still a noob trader until now.
Below are the common mistakes I have done in my leverage trading journey, I wanna share them so if ever some newbies might be interested to step into the world of trading, they'll have some guides on what to avoid;
? Not learning the basics
- In trading, you need to learn the basics such as reading charts, reading candlestick, plotting support, and resistance. If you don't know what are those then you are like a soldier going into war without weapons. I've done this one, as I am excited to do leverage trading after practicing almost a month on a demo account, my demo was good but I didn't learn the basics all those winning trades on the demo were just based on hulalysis.
? Following Some Traders signal without validating it
- If you are eager to step into the world of trading there are a lot of Telegram channels that give free signal entry and exits as well, but entering without validating the signal if it is good call or not. I've been super excited to try leverage trading last year just following some signals given by our channel, just entering a position without checking if it's a good call because I don't know how to read candlesticks and indicators yet. Some signals are good but some are not, it is said that there is no perfect technical analysis that is 100% probability, if you are a cautious trader you should validate the signal first before taking positions.
? Using high leverage
- Leverage is a multiplier, for example,, your margin (capital) is $20 while you used 50x your total capital will be $1,000 the higher leverage the higher the risk, while the higher risk also comes with high rewards if you win the trade. The problem is that when your prediction is against the market, you will end up being rekt because with with just little movements of the candlestick you will be easily liquidated not unless if you have a huge amount of capital. But almost pro traders do not recommend high leverage because it's like a gamble anymore. I've done this one, my margin was $100 with 75x leverage and BTC was very volatile at that time, I got liquidated. It's just a matter of seconds, I lose the $100.
? Chasing entry or riding dildo
- Some altcoins pumps abnormally where the buying or selling pressure was too high forming a dildo candle (long green/red candlestick) it happens when some news or hype just like Doge when Elon Musk keeps tweeting it. Some noob traders chasing entry positions, ending they bought at the top then got rekt when the dump begins after the massive pump. I am always like this before, I entered late even if I am warned not to chase the flying rockets as a hard-headed I didn't listen and boom got negative, good thing there is cut losses. So do not chase an entry, always plan your trade.
? Greediness that ends up with the wrong exit
- Greediness is when you want more thinking it will go up or down with your prediction, but when it started to change the trend you will end up with the wrong exit instead of having gains because of your greed. Been there done that many times, mostly I am scalpers just trading 5-15 minutes so it's really important to find the good exit to secure gains but due to greed sometimes I ended up cutting losses. Control your greed because it will not give you a good outcome.
? Not using stop loss
- In trading, it is always recommended to use stop loss, so if ever the market is against your prediction you will only lose a certain amount not losing your whole margin. But sometimes noobs do not use this thinking it will bounce back right away, when the trend started to reverse it will take time to bounce back so it better uses stop loss for your safety and for you to sleep well lol. I know some of my friends did this like “pinaglaban ko hanggang huli Pero di ako pinaglaban” trading is not like a relationship lol, so let's stop our stupidity.
? Weak hands
- Weak hands are those who exit early on their trade showing less patience. Instead of gaining a good amount of profit, they missed the chance because of having weak hands. This is some, for now, I know how to find a good entry but I don't know how to have a better exit because weak hands are holding me back instead of waiting a little more, I need more patience lol.
Closing Thoughts
Those are the common mistakes I have done in my leverage trading journey, as of now I am still a noob and I cannot say I am good at it but it doesn't mean I will stop. I don't care if I am going to master leverage trading for 2-3 years, I will never give up it's not my forte. I am willing to undergo all the stress and loss just to master it.
So my advice is that learn first before jumping into leverage trading. Crypto Market is not friendly, it will rip you off until you flee, trading is not for weak. So we need to learn more before putting our hard-earned money into it. We seek to have profits not losses.
If you want to practice trading you can do it at Stormgain, they have a demo account where you can practice all the time and cryptominer, one of the best features they ever have. You just activate the crypto miner every 4hrs and when you reached $10 you can withdraw it but not on your wallet, on your account only. You can use it for trading, once you accumulate profits and made it to $55 you can withdraw it anytime. Just click the link below and get a $3 sign-up bonus.
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Thank you for reading!
