Home Insights & Advice Why 95% of crypto traders quit within a year

Why 95% of crypto traders quit within a year

by John Saunders
16th Jun 20 3:31 pm

Many so-called crypto success stories mistakenly talk about how easy and profitable trading is.

This tends to make lots of beginners think of crypto trading as a “get-rich-quick” hobby and end up losing money the hard way.

Without any prepping or planning, 95% or more of day traders lose money until they can’t afford to continue trading anymore.

In this article, you’ll know the four common mistakes that beginner traders make and the solutions to them.

Why crypto trading is so hard

Crypto trading requires a lot of technical analyses and constantly keeping updated with the latest news.

Trading profitably requires time for you to study, train your emotions, create the right strategy with risk management, and execute trades at the right moment.

Volatility is inherent in the market


It is possible to earn 50% gains within a day… and it’s also possible to lose 50% of your capital by the next day.

The price swings you’ll experience in a relatively new and constantly developing crypto market means that it has high volatility.

High volatility = More opportunities to make money, but also comes with high risks.

Your best bet in riding the volatile market profitably is by having a good risk management strategy.

Essentially, you’ll have to spend hours researching the market and coming up with strategies for minimizing your losses for when your trades go in the unexpected direction.

Here are some examples of you can do:

  • Calculating your risk-reward ratio with your winning rate. The most common strategy is opening no more than three to six positions with 1% to 2% risk each to prevent huge losses. You can modify this as you gain more trading experience.
  • Having automatic Stop Loss and Take Profit orders. These orders take emotions out of the way by exiting trades with dwindling prices or once a price goal has been reached. It’s helpful in preventing you from holding on for too long in the hopes of getting bigger profits.
  • Diversifying your portfolio. Consider investing in various coins instead of just one or two under the same category. Aside from preventing huge losses, you are also opening yourself up to more opportunities.

When going into the specifics of preparing for every possible risk, always remember the golden rule: never invest more than you can afford to lose.

Emotions can get in the way of your decisions

Fear is one of the strongest emotions that can affect the market.

Technical intelligence alone won’t guarantee successful trades if you do not have emotional discipline as well, especially in a fast-paced and volatile market.

The most common newbie mistake is panicking when you see your coin’s price dwindling and selling it immediately at a loss, even though logical analysis says that it can rise again.

Here are some more common scenarios of emotionally-driven trading decisions:

  • Impulsive trading – Fear of Missing Out (FOMO) on good deals makes you trade impulsively, following the latest trend on the market instead of sticking to your trading plan
  • Revenge trading – Attempting to regain huge losses in a previous trade by entering a highly profitable yet highly risky trade in a rush
  • Chasing the market – Trying to make a profit from an ongoing trend without knowing you’re too late

Usually, there are good intentions behind making these trades. However, these actions won’t always work and you will most likely end up in a position that’s even worse than before.

Although many people say that technical know-how is important in trading successfully, emotional discipline is also a skill that every trader should develop.

Your winning strategy won’t work every time

As a beginner, you’ll probably take a lot of advice on trading strategies from YouTube tutorials and strangers on the internet.

But the truth is, there is no one-size-fits-all strategy.

Trying to balance your trading style with your risk appetite, choosing the right coins to trade at the right time, and then crafting a flexible strategy requires a lot of effort.

To make a solid plan for every trade, it’s a good idea to spend at least 2 to 3 hours every day researching the market and figuring out how you’re going to apply it.

Start by mastering one strategy, such as the moving average cross over, and then build from there. Be mindful of the gaps in your armour and plan risk management around this.

You aren’t using the right trading tools

Constantly monitoring a crypto market that never closes can be mentally and emotionally exhausting.

That’s why smarter crypto traders make use of automated crypto trading tools to help them.

There are many benefits in using an automated software solution to help you with trading:

  • Easily find profitable coin pairs to trade that are suggested by smart AI and expert traders. This saves time and effort when it comes to determining the coins you should trade with at the right time.
  • Entries, Stop Losses and Take Profit orders can be automated, preventing you from losing too much or making you money as soon as the opportunity arrives. Most crypto exchange platforms don’t have the automated trading feature. Setting a stop loss or take profit order may be useless if you can’t manually execute it at the right time or you are sleeping!
  • It places your trades as soon as certain market indicators are met. This helps keep strong emotions away from letting you make unplanned trades in a rush.

Essentially, an automated trading software will monitor the market and make the trades for you just by leaving the instructions with the software.

This is a big time saver and it reduces mental fatigue too!


You can get by with following the “buy low, sell high” principle but you can really go far if you:

  • Know how to control your emotions
  • Do your research about the technicalities and news on crypto coins
  • Create a flexible trading strategy with risk management
  • Use an automated crypto software to maximize your time and effort

Being a successful beginner trader that can go beyond the 1-year mark is a combination of hard work AND smart work.

After doing an initial preparation, using a sophisticated software would make trading a little less heavy.

Now that you know the common beginner mistakes and the solutions to these, you have a better chance in making successful crypto trades (without too much hassle) for the long term.

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