{"id":27051,"date":"2020-08-10T10:46:57","date_gmt":"2020-08-10T07:46:57","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=27051"},"modified":"2025-08-26T18:29:31","modified_gmt":"2025-08-26T15:29:31","slug":"six-mistakes-beginner-traders-make-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/six-mistakes-beginner-traders-make-and-how-to-avoid-them\/","title":{"rendered":"Six mistakes beginner traders make\u2014and how to avoid them"},"content":{"rendered":"<p>Many enter trading in search of easy money. Beginners think trading is simple: they look at a chart, press a button, and profit. In reality, <a href=\\\"https:\/\/financefeeds.com\/many-retail-fx-traders-lose-many-gain-look-averages\/\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">70% of traders<\/a> lose money. The problem lies not in knowledge of technical analysis, but in common emotional mistakes.<!--more--><\/p>\n<p>Together with the cryptocurrency exchange <a class=\\\"tracking_link\\\" href=\\\"https:\/\/exmo.com\/?utm_source=forklog&#038;utm_medium=article_2\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">EXMO<\/a>, we outline six typical trading mistakes and offer advice on how to avoid them.<\/p>\n<h2>Buying at the end of a rally<\/h2>\n<p>Beginners often buy cryptocurrency at the end of an uptrend. Their behaviour is illustrated by <a href=\\\"https:\/\/letemspin.com\/wall-street-cheat-sheet-psychology-of-a-market-cycle\/\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">Wall Street Cheat Sheet<\/a>. It explains the psychology of the average trader during the stages of the market cycle:<\/p>\n<ul>\n<li>At the start of a trend, traders do not believe in the move \u2014 fear is stronger than greed;<\/li>\n<li>In the middle of the trend, they regret not buying earlier \u2014 fear and greed are balanced;<\/li>\n<li>At the end of the trend, the trader enters a position \u2014 greed is stronger than fear;<\/li>\n<li>The trend reverses \u2014 the trader loses money.<\/li>\n<\/ul>\n<div id=\\\"attachment_106943\\\" style=\\\"width: 1593px\\\" class=\\\"wp-caption aligncenter\\\"><img loading=\\\"lazy\\\" decoding=\\\"async\\\" aria-describedby=\\\"caption-attachment-106943\\\" class=\\\"wp-image-106943 size-full\\\" src=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image1-248.png\\\" alt=\\\"\u0428\u0435\u0441\u0442\u044c \u043e\u0448\u0438\u0431\u043e\u043a \u043d\u0430\u0447\u0438\u043d\u0430\u044e\u0449\u0438\u0445 \u0442\u0440\u0435\u0439\u0434\u0435\u0440\u043e\u0432. \u0420\u0430\u0441\u0441\u043a\u0430\u0437\u044b\u0432\u0430\u0435\u043c, \u043a\u0430\u043a \u0438\u0445 \u0438\u0437\u0431\u0435\u0436\u0430\u0442\u044c\\\" width=\\\"1583\\\" height=\\\"955\\\" srcset=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image1-248.png 1583w, https:\/\/u1f987.com\/wp-content\/uploads\/image1-248-300x181.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/image1-248-1024x618.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/image1-248-768x463.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/image1-248-1536x927.png 1536w\\\" sizes=\\\"auto, (max-width: 1583px) 100vw, 1583px\\\" \/><\/p>\n<p id=\\\"caption-attachment-106943\\\" class=\\\"wp-caption-text\\\">Wall Street Cheat Sheet shown on the BTC\/USD chart on <a class=\\\"tracking_link\\\" href=\\\"https:\/\/exmo.com\/trade\/BTC_USD?utm_source=forklog&#038;utm_medium=article_2\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">EXMO<\/a><\/p>\n<\/div>\n<p><strong>Why this happens<\/strong>: prices move chaotically. This is described by Bill Williams in the book <a href=\\\"https:\/\/www.amazon.com\/Trading-Chaos-Maximize-Technical-Techniques\/dp\/0471463086\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">Trading Chaos<\/a>. According to him, 7 of 8 moves of price by 1% end in a pullback. Only one of such moves begins a new trend.<\/p>\n<p>Experienced traders enter a position on each such move. They hope that the profit from a single trend trade will cover the losses from seven unsuccessful ones.<\/p>\n<p>Novices miss the start of the trend: they fear a pullback and wait for favorable conditions. Yet at the end of the trend they buy the asset and create a frenzy \u2014 price swings inside the candle with a new high.<\/p>\n<div id=\\\"attachment_106944\\\" style=\\\"width: 1290px\\\" class=\\\"wp-caption aligncenter\\\"><img loading=\\\"lazy\\\" decoding=\\\"async\\\" aria-describedby=\\\"caption-attachment-106944\\\" class=\\\"wp-image-106944 size-full\\\" src=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image3-99.png\\\" alt=\\\"\u0428\u0435\u0441\u0442\u044c \u043e\u0448\u0438\u0431\u043e\u043a \u043d\u0430\u0447\u0438\u043d\u0430\u044e\u0449\u0438\u0445 \u0442\u0440\u0435\u0439\u0434\u0435\u0440\u043e\u0432. \u0420\u0430\u0441\u0441\u043a\u0430\u0437\u044b\u0432\u0430\u0435\u043c, \u043a\u0430\u043a \u0438\u0445 \u0438\u0437\u0431\u0435\u0436\u0430\u0442\u044c\\\" width=\\\"1280\\\" height=\\\"726\\\" srcset=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image3-99.png 1280w, https:\/\/u1f987.com\/wp-content\/uploads\/image3-99-300x170.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/image3-99-1024x581.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/image3-99-768x436.png 768w\\\" sizes=\\\"auto, (max-width: 1280px) 100vw, 1280px\\\" \/><\/p>\n<p id=\\\"caption-attachment-106944\\\" class=\\\"wp-caption-text\\\">Trader flips position due to small price fluctuations<\/p>\n<\/div>\n<p><strong>Why this happens<\/strong>: novices fear losses and perceive <span class=\\\"old_tooltip\\\" data-descr=\\\"unrealized profit or loss\\\">paper<\/span> losses too emotionally. They confuse micro-volatility with the start of a new trend and constantly flip positions.<\/p>\n<p><strong>How to avoid the error<\/strong>: switch the chart to a longer time frame so you do not get distracted by minute fluctuations.<\/p>\n<p>Bill Williams advises treating each trade as buying a lottery ticket. The price of the ticket is the maximum acceptable loss. In other words: hold the trade until the stop-loss triggers.<\/p>\n<h2>Obvious stop-loss<\/h2>\n<p>Usually traders set stop-losses beyond recent <span class=\\\"simple_tooltip\\\" content=\\\"the highest and lowest price values over a period\\\">extremes<\/span> of the market. At times, prices break through extremes and then reverse in the intended direction. In such cases traders do not take profit: the stop-losses fire.<\/p>\n<div id=\\\"attachment_106946\\\" style=\\\"width: 1588px\\\" class=\\\"wp-caption aligncenter\\\"><img loading=\\\"lazy\\\" decoding=\\\"async\\\" aria-describedby=\\\"caption-attachment-106946\\\" class=\\\"size-full wp-image-106946\\\" src=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image5-52.png\\\" alt=\\\"\u0428\u0435\u0441\u0442\u044c \u043e\u0448\u0438\u0431\u043e\u043a \u043d\u0430\u0447\u0438\u043d\u0430\u044e\u0449\u0438\u0445 \u0442\u0440\u0435\u0439\u0434\u0435\u0440\u043e\u0432. \u0420\u0430\u0441\u0441\u043a\u0430\u0437\u044b\u0432\u0430\u0435\u043c, \u043a\u0430\u043a \u0438\u0445 \u0438\u0437\u0431\u0435\u0436\u0430\u0442\u044c\\\" width=\\\"1578\\\" height=\\\"957\\\" srcset=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image5-52.png 1578w, https:\/\/u1f987.com\/wp-content\/uploads\/image5-52-300x182.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/image5-52-1024x621.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/image5-52-768x466.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/image5-52-1536x932.png 1536w\\\" sizes=\\\"auto, (max-width: 1578px) 100vw, 1578px\\\" \/><\/p>\n<p id=\\\"caption-attachment-106946\\\" class=\\\"wp-caption-text\\\">Probitie of recent lows with continuation of rise (BTC\/USD on <a class=\\\"tracking_link\\\" href=\\\"https:\/\/exmo.com\/trade\/BTC_USD?utm_source=forklog&#038;utm_medium=article_2\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">EXMO<\/a>)<\/p>\n<\/div>\n<p><strong>Why this happens<\/strong>: large players push the price in the desired direction using volumes of private traders. If newcomers rush in to buy as a group, professionals trigger their stop-losses and push the price up. After that, newcomers buy the asset again and help push the price higher.<\/p>\n<div id=\\\"attachment_106947\\\" style=\\\"width: 1591px\\\" class=\\\"wp-caption aligncenter\\\"><img loading=\\\"lazy\\\" decoding=\\\"async\\\" aria-describedby=\\\"caption-attachment-106947\\\" class=\\\"size-full wp-image-106947\\\" src=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image4-65.png\\\" alt=\\\"\u0428\u0435\u0441\u0442\u044c \u043e\u0448\u0438\u0431\u043e\u043a \u043d\u0430\u0447\u0438\u043d\u0430\u044e\u0449\u0438\u0445 \u0442\u0440\u0435\u0439\u0434\u0435\u0440\u043e\u0432. \u0420\u0430\u0441\u0441\u043a\u0430\u0437\u044b\u0432\u0430\u0435\u043c, \u043a\u0430\u043a \u0438\u0445 \u0438\u0437\u0431\u0435\u0436\u0430\u0442\u044c\\\" width=\\\"1581\\\" height=\\\"951\\\" srcset=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image4-65.png 1581w, https:\/\/u1f987.com\/wp-content\/uploads\/image4-65-300x180.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/image4-65-1024x616.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/image4-65-768x462.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/image4-65-1536x924.png 1536w\\\" sizes=\\\"auto, (max-width: 1581px) 100vw, 1581px\\\" \/><\/p>\n<p id=\\\"caption-attachment-106947\\\" class=\\\"wp-caption-text\\\">5 \u0438\u044e\u043b\u044f \u0431\u0438\u0442\u043a\u043e\u0438\u043d \u043f\u0440\u043e\u0431\u0438\u043b \u043f\u0440\u043e\u0448\u043b\u044b\u0439 \u043c\u0438\u043d\u0438\u043c\u0443\u043c \u0438 \u0441\u043f\u0440\u043e\u0432\u043e\u0446\u0438\u0440\u043e\u0432\u0430\u043b \u0442\u0440\u0435\u0439\u0434\u0435\u0440\u043e\u0432 \u043d\u0430 \u0434\u0430\u043b\u044c\u043d\u0435\u0439\u0448\u0438\u0435 \u043f\u043e\u043a\u0443\u043f\u043a\u0438<\/p>\n<\/div>\n<p><strong>How to avoid the error<\/strong>: do not place stop-losses beyond extremes, as well as obvious support and resistance levels.<\/p>\n<p>Trader Barry Burns <a href=\\\"https:\/\/www.desiretotrade.com\/159-what-it-takes-to-be-successful-in-trading-barry-burns\/\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">advises<\/a> to set stop-losses at a level where there is no reason to hold the position. For example, where the pattern loses its strength.<\/p>\n<h2>Too large a position<\/h2>\n<p>Traders follow a rule: in a trade, risk no more than 2% of the deposit. Beginners misinterpret it and allocate 2% of the account balance to a position, typically around $20. On such a trade you would not earn even in a strong uptrend: for example, when Bitcoin rises 5%, the profit would be $1.<\/p>\n<p>More often, the novice will want to earn more and increase the position size. If the trade goes bad, they lose a larger portion. Therefore, the trader will hold until the end: what if the market reverses and the loss becomes profit?<\/p>\n<p><strong>Why this happens<\/strong>: novices want to earn money quickly. They ignore the 2% rule and lose the deposit on several unsuccessful trades.<\/p>\n<p>In reality, the 2% rule states: set stop-losses so that when triggered you lose no more than 2% of the deposit. Then you will have money for new trades even after a string of failures.<\/p>\n<p><strong>How to avoid the mistake<\/strong>: select positions to ensure that a losing trade costs no more than 2% of the deposit. For example, with a stop-loss at 4% from the entry, you can use half the deposit.<\/p>\n<h2>Trying to make up losses<\/h2>\n<p>Novices react badly to losing money. After a losing trade they try to make it back and \u201cget their money back.\u201d Traders become greedy: increase the size of the position and enter the market under emotional influence. As a result \u2014 they lose more money.<\/p>\n<p><strong>Why this happens<\/strong>: traders take losses too personally and play roulette with the market instead of trading.<\/p>\n<p><strong>How to avoid the mistake<\/strong>: do not take losses as a personal insult. The market behaves chaotically. Even the best trading strategies do not guarantee 100% profitable trades.<\/p>\n<h2>Impatience<\/h2>\n<p>Novices often close profitable trades with minimal gains: usually at the first pullback during a trend.<\/p>\n<p>For example, a trader buys Bitcoin. The price rises 5%, then falls 2%. The novice wants to protect paper profits and closes the position. After that Bitcoin continues to rise, but the trader cannot profit from it.<\/p>\n<p><strong>Why this happens<\/strong>: novices treat unrealised profits as earned money, and its decline as a loss. They close positions during pullbacks and fail to profit from larger moves.<\/p>\n<div id=\\\"attachment_106948\\\" style=\\\"width: 1593px\\\" class=\\\"wp-caption aligncenter\\\"><img loading=\\\"lazy\\\" decoding=\\\"async\\\" aria-describedby=\\\"caption-attachment-106948\\\" class=\\\"size-full wp-image-106948\\\" src=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image6-31.png\\\" alt=\\\"\u0428\u0435\u0441\u0442\u044c \u043e\u0448\u0438\u0431\u043e\u043a \u043d\u0430\u0447\u0438\u043d\u0430\u044e\u0449\u0438\u0445 \u0442\u0440\u0435\u0439\u0434\u0435\u0440\u043e\u0432. \u0420\u0430\u0441\u0441\u043a\u0430\u0437\u044b\u0432\u0430\u0435\u043c, \u043a\u0430\u043a \u0438\u0445 \u0438\u0437\u0431\u0435\u0436\u0430\u0442\u044c\\\" width=\\\"1583\\\" height=\\\"955\\\" srcset=\\\"https:\/\/u1f987.com\/wp-content\/uploads\/image6-31.png 1583w, https:\/\/u1f987.com\/wp-content\/uploads\/image6-31-300x181.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/image6-31-1024x618.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/image6-31-768x463.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/image6-31-1536x927.png 1536w\\\" sizes=\\\"auto, (max-width: 1583px) 100vw, 1583px\\\" \/><\/p>\n<p id=\\\"caption-attachment-106948\\\" class=\\\"wp-caption-text\\\">Traders save unrealized profits. After pullbacks, Bitcoin continues to rise (BTC\/USD on <a class=\\\"tracking_link\\\" href=\\\"https:\/\/exmo.com\/trade\/BTC_USD?utm_source=forklog&#038;utm_medium=article_2\\\" target=\\\"_blank\\\" rel=\\\"noopener noreferrer\\\">EXMO<\/a>)<\/p>\n<\/div>\n<p><strong>How to avoid the error<\/strong>: remember that prices do not move in a straight line. Every trend features pullbacks. To maximise profits, wait for the start of the frenzy and exit the market with the big players.<\/p>\n<h2>Conclusions<\/h2>\n<p>Traders&#8217; earnings depend not only on the ability to analyse charts and news. In trading, personality traits such as calm, patience and prudence matter.<\/p>\n<p>Even experienced traders are not immune to mistakes. But there are a few rules that can help beginners make fewer errors:<\/p>\n<ul>\n<li>do not enter the market during upward or downward moves; wait for a pullback or a period of flat trading;<\/li>\n<li>do not close or flip a position with a small loss; instead, set stop-losses;<\/li>\n<li>place stops away from extremes so they will not be hit by a false breakout;<\/li>\n<li>select position sizes so that a losing trade costs no more than 2% of the deposit;<\/li>\n<li>do not try to recover losses; these are the costs of running a trading business;<\/li>\n<li>do not fear pullbacks; a 1% decline does not spell the end of the trend.<\/li>\n<\/ul>\n<p>Remember: in trading it is important to think, not feel. To worry less about losses, do not trade with money you are not prepared to lose.<\/p>\n<p>Follow Forklog&#8217;s news on <a href=\\\"https:\/\/www.facebook.com\/forklog\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener noreferrer\\\">Facebook<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Traders enter the market chasing easy money. Beginners think trading is simple: they look at a chart, press a button, and earn. In reality, 70% of traders lose money. The problem is not knowledge of technical analysis but common emotional mistakes.<\/p>\n","protected":false},"author":1,"featured_media":27052,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"2","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[1144],"tags":[1267],"class_list":["post-27051","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-longreads","tag-cryptocurrency-trading"],"aioseo_notices":[],"amp_enabled":true,"views":"11","promo_type":"2","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/27051","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=27051"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/27051\/revisions"}],"predecessor-version":[{"id":27053,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/27051\/revisions\/27053"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/27052"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=27051"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=27051"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=27051"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}