Things You Should Never Do as a Crypto InvestorTrader

20 Things You Should Never Do as a Crypto Investor/Trader

If you’re new to the world of crypto, you’re in luck! I’ve put together a guide just for you. 

In this blog post, I’ve put together a roadmap for success by revealing 20 things you definitely want to avoid as a crypto investor or trader.

Think of this as your survival manual in the busy world of blockchain and cryptocurrencies. 

Now, you might be wondering, why is it so important to steer clear of certain actions in the crypto world? 

Consider this blog your helpful guide, preventing you from falling into the same traps that caught many others before you.

I’m not just here to throw information at you; think of me as your friendly crypto mentor, guiding you through the landscape with confidence.

20 Things You Should Never Do as a Crypto Investor/Trader

Check out this list of 20 things you should steer clear of as a crypto investor or trader.

1. Invest More Than You Can Afford to Lose

Cryptocurrencies are a bit like being on a rollercoaster with a blindfold on – the prices can go up and down like crazy. 

The golden rule here? Only put in money you can afford to lose. 

Imagine it as setting aside cash for a super exciting theme park ride – once it’s spent, you won’t feel too bad about it.

Why is this important?

Cryptocurrency markets are well-known for being a bit wild and unpredictable. Prices can jump up or down quite a lot in a short time. 

It’s exciting when things are going your way, but it can be really tough when they’re not. 

Remember, only put money into cryptocurrencies that won’t mess up your everyday life or your big money plans for the future.

Tips to follow:

  1. Set a Budget: Figure out how much you’re comfortable investing without messing up your financial stability. Think of it like a little trial rather than a surefire way to make money.
  2. Emergency Fund Comes First: Make sure you’ve got a good backup fund set aside for unexpected situations like living costs before jumping into the world of crypto investments. Having this backup money is like a safety net in case your investments don’t go as planned.
  3. Diversify Your Investments: Don’t put all your money in just one type of cryptocurrency. Spread your money across different types to lower the chances of things going pear-shaped. So if one doesn’t do well, the others can still shine.

Read Also: Biggest Bitcoin Price Drops in History

2. Follow Hype Blindly Without Verifying Information

In the speedy world of cryptocurrency, hype can either be your friend or your enemy. 

It’s tempting to join the excitement around a trendy new project, but jumping in without checking the facts can lead to costly mistakes.

Why is this important?

Cryptocurrency markets are like gossip hubs. Rumors and hype can mess things up. 

Following the crowd without doing your homework is like blindly trusting someone to guide you through a maze – it usually ends in disaster. 

False information spreads like wildfire, making prices shoot up, and leaving investors who didn’t do their homework feeling pretty disappointed.

Tips to follow:

  1. Research: Before putting your money into any project, take the time to look into it. Understand the basics, get to know the team behind it, grasp the technology, and figure out how it can be used in the real world.
  2. Question the Source: Verify the source of information. Reliable news outlets, official project announcements, and reputable forums are better sources than social media rumors.
  3. Check the Credibility of Influencers: Influencers can give you the lowdown, but not all of them are on the same level. Make sure they have a good history of giving accurate info and not just promoting things for the sake of it.
  4. Beware of Pump and Dump Schemes: Hyped-up projects can be targeted by pump-and-dump schemes, where prices are artificially inflated before crashing. Be cautious of sudden surges and do your due diligence.
  5. Avoid Herd Mentality: Don’t be fooled just because everyone’s talking about it – popularity doesn’t guarantee it’s accurate. Avoid following the crowd without thinking and take a good look at the info yourself.
  6. Cross-Check Information: Don’t rely on a single source. It’s a good idea to double-check tips and info by looking at a bunch of reliable places. 

Read Also: 5 Most Popular Websites for Crypto News

3. Neglect Security Measures for Your Crypto Assets

Getting into cryptocurrencies means you’ve got to look out for your money and keep it safe from possible problems. 

If you don’t take care of security, you could end up facing issues like getting hacked, falling for scams, or losing your money. 

So, if you’re a crypto investor, especially if you’re new to this, making sure everything is secure should be your number one priority.

Why is this important?

Cryptocurrencies work on digital platforms that aren’t controlled by a central authority, which means they can face different security challenges. 

Unlike regular banks, there’s no one you can call if you lose your crypto. 

It’s really important to do things ahead of time to keep your money safe and have a smooth ride in the crypto world.

Tips to follow:

  1. Use Hardware Wallets: Consider using hardware wallets for long-term storage of your cryptocurrencies. These physical devices add an extra layer of security by keeping your private keys offline, making it a safer way to stash your crypto in the long run.
  2. Enable Two-Factor Authentication (2FA): Make sure your exchange accounts and wallets are extra safe by using 2FA. This extra step adds an important layer of security, making sure you need more than just a password to get in.
  3. Regularly Update Software: Make sure your wallets, exchanges, and any related software are always up to date. You see, developers regularly send out updates to fix any weak spots, and keeping things current is an easy but clever way to keep your crypto safe and sound.
  4. Beware of Phishing Attempts: Watch out for phishing scams that pretend to be real websites or services. Make sure to take a second look at web addresses and steer clear of any dodgy links in emails or messages. 
  5. Secure Your Private Keys: Your private key is your crypto identity. Keep it private and never share it with anyone. 
  6. Secure Your Recovery Phrases: When you’ve got a software wallet, make sure you keep your recovery phrases safe and sound. Think about having a couple of backup copies in different places, just to be on the safe side
  7. Limit Exposure on Exchanges: Don’t keep loads of cryptocurrency on exchanges. Move most of it to safe, private wallets.

Read Also: 7 Best Ways to Secure Your Cryptocurrencies

4. Invest in Projects Without Understanding Their Whitepaper

Thinking about putting your money into a crypto project? Well, before you take the plunge, let’s talk about something important: the whitepaper.

This crucial document spills the beans on what a project is all about. 

For newbies in the crypto game, it’s super important to wrap your head around what’s in that whitepaper before you start throwing money into the mix. 

Why is this important?

Think of the whitepaper as the GPS of a cryptocurrency project, showing you the ins and outs of what it’s all about – its goals, how it works, and the nitty-gritty details. 

Now, imagine throwing your money into the crypto world without understanding this guide – it’s like wandering through a strange place without a map. 

Risky, right? 

You could easily find yourself lost and scratching your head. 

So, before diving in, give that whitepaper a read; it’s your key to avoiding a financial adventure that could leave you feeling a bit lost!

Tips to follow:

  1. Decipher the Basics: First things first, get the lowdown on the basic ideas in the whitepaper. What’s the issue the project is tackling, and what’s the game plan to fix it?
  2. Evaluate the Technology: Get your detective hat on and look into the techy stuff of the project. Is it using cool, new tech? What makes it stand out from what’s already out there? Having a strong technical base is the key to making sure the project stands tall and strong. 
  3. Check the Team: Check out the people behind the project – see what they’ve done before and how good they are at it. A team that knows their stuff is more likely to get the job done right.
  4. Assess the Use Case: See if the cryptocurrency serves a real-world purpose. Projects with clear, practical use cases are generally more sustainable.
  5. Understand the Tokenomics: Take a peek at the tokenomics—how the project’s native tokens work within the ecosystem. This includes details on distribution, governance, and utility.
  6. Red Flags: Watch out for projects with confusing or super complicated whitepapers. If things seem unclear or they’re making promises that sound too good to be true, it’s a bit of a red flag.

5. Trade Emotionally Based on Fear or Greed

Trading cryptocurrency isn’t just about numbers and charts – it’s a bit like a mental game too. 

There are two strong feelings, fear, and greed, that can either help you succeed or cause you to lose a lot of money. 

If you’re a newbie in the crypto trading world, it’s important to control your emotions, just like understanding what’s going on in the market.

Why is this important?

Fear and greed are basic instincts that are deeply rooted in how people behave. 

In the world of crypto, fear might make you sell in a hurry when things aren’t going well, and greed might push you to hold a coin longer, or buy impulsively when things are looking up. 

Figuring out these feelings and getting past them is crucial for making smart, calm decisions when you’re trading.

Tips to follow:

  1. Understand Your Emotions: Acknowledge that fear and greed are part of the trading experience. Being aware of your emotions is the first step to managing them effectively.
  2. Educate Yourself: Learn about how the market works, check out technical analysis, and understand what affects crypto prices. The more you know, the less likely you’ll get carried away by your feelings.
  3. Establish a Trading Plan: Create a solid plan for your trading with clear points on when to start and when to stop. Having a plan makes it easier to keep your cool and not make decisions based on feelings because you’ve already decided what to do in advance.
  4. Set Realistic Goals: Set goals that you can actually reach and give yourself time to reach them. Don’t get caught up in the fear of missing out (FOMO) or the desire for quick profits – those feelings can make you act without thinking.
  5. Use Risk Management Strategies: Implement risk management tools, such as stop-loss orders and position sizing. These mechanisms can protect your capital and reduce the emotional impact of market fluctuations.
  6. Practice Patience: Crypto markets are known for their volatility. Being patient is your friend here. Don’t let quick price changes guide your choices. Look at the big picture, the long-term trends, instead of getting caught up in the short-term ups and downs.

6. Neglect to Set Stop-loss Orders

In crypto trading, it’s easy to get caught up in the excitement and forget about risk management

One critical aspect that many, especially beginners, tend to neglect is setting stop-loss orders. 

Think of them as your safety nets in the crypto circus – absolutely essential. 

Why is this important?

Cryptocurrency markets are famous for being unpredictable. 

Prices can jump around a lot in a short space of time, putting traders at risk of big losses. 

That’s where stop-loss orders come in. They’re like an automatic button that sells your crypto when it hits a certain price, protecting you from taking a nosedive. 

Ignoring this tool is a bit like tightrope walking without a safety rope – not the smartest move!

Tips to follow:

  1. Protect Your Capital: The main idea behind a stop-loss order is to keep your capital safe. When you pick a point in advance to exit the market, it helps you avoid big losses if the market doesn’t go your way.
  2. Define Your Risk Tolerance: Before you jump into a trade, figure out how much of your money you’re okay with risking. Set your stop-loss order at a level that aligns with your risk tolerance.
  3. Avoid Emotional Decision-Making: Using stop-loss orders takes the emotion out of the game when the market goes a bit crazy. It acts as a rational, predetermined response to unexpected price movements.
  4. Consider Volatility: Adjust your stop-loss levels based on the volatility of the crypto you’re trading. Highly volatile assets may require wider stop-loss margins to handle those sudden fluctuations in price.
  5. Don’t Set Too Tight or Too Loose: Getting the balance just right is key. If you set your stop-loss orders too close, you might sell off when you don’t need to. On the other hand, if you set them too far, you risk bigger losses. Find that sweet spot by considering what’s going on in the market and how much risk you’re comfortable with.
  6. Combine with Take-Profit Orders: Consider using take-profit orders in conjunction with stop-loss orders. This combination helps you secure profits at predetermined levels while minimizing potential losses.

Read Also: Understanding Stop Loss and Take Profit Orders in Crypto

7. Chase Losses by Making Impulsive Trades

In crypto trading, it’s pretty normal to encounter losses now and then. 

But what makes the winners stand out is their knack for dealing with it smartly instead of getting all emotional. 

Jumping into trades without thinking when you’ve lost money is a classic mistake that can make your financial situation even worse.

Why is this important?

Chasing losses is like a quick, emotional response when you’re eager to recover the money you’ve lost. 

But here’s the kicker: jumping into hasty trades usually ends up causing even more losses. 

Knowing why this is risky is vital to keeping your money safe and staying calm about it all.

Tips to follow:

  1. Accept the Reality: In trading, it’s totally normal to face losses now and then. The first thing to do is accept that it’s just part of the game. Once you’ve got that in your head, you’re on your way to being more sensible and strategic in your approach.
  2. Reassess Your Strategy: Before jumping into new trades, give yourself a moment to rethink your whole trading plan. Look for any bits that might need a tweak or places where you could do better. Taking this step helps you stay on top of your game.
  3. Learn from Mistakes: Check out the trades where you ended up with losses. Figure out what went wrong. It’s all part of the learning process in your trading education – understanding and growing from your mistakes.
  4. Stick to Your Plan: Stick to your trading plan like glue. Going off from a carefully thought-out strategy only makes it more likely that you’ll end up with more losses. Keep to the plan, and you’ll be in better shape.
  5. Avoid Revenge Trading: Feeling the need to “get even” with the market can be pretty strong, but it’s not a good way to think. Trying to get revenge on the market usually comes from emotions and hardly ever turns out well.
  6. Take a Break: If you catch yourself making quick trades to bounce back from losses, maybe it’s time for a trading break. Stepping away can help you clear your emotions, and you often get a better perspective when you come back.

8. FOMO (Fear of Missing Out) Into a Rapidly Rising Asset

The Fear of Missing Out or FOMO, can really get under your skin, especially when it comes to the fast-paced world of cryptocurrency. 

It’s like that nervous voice in your head saying, “Don’t pass up on this fantastic chance!” 

But giving in to FOMO and quickly putting your money into a rapidly rising coin can be a risky move.

Why is this important?

Acting on FOMO often means buying crypto when its value is at its highest, which can pave the way for possible losses when the market adjusts. 

Grasping the risks tied to FOMO is key to staying calm and making well-thought-out moves in your trading journey.

Tips to follow:

  1. Recognize FOMO Signals: The first thing to do is be aware of what’s going on. If you notice that FOMO is influencing your choices, just admit it and be ready to step back for a moment.
  2. Stay Calm, Stay Rational: When you come across a coin that’s rising up quickly, just take a deep breath. Keep cool and think logically, making sure your emotions don’t cloud your decision-making.
  3. Set Clear Entry Points: Set clear entry points for coins in your trading plan. Stick to these points and resist the urge to stray from your strategy because of FOMO.
  4. Do Your Research: Even when FOMO is knocking, do your research before diving into any investment. Understand the fundamentals of the crypto and its long-term possibilities. 
  5. Avoid Chasing the Market: Chasing after a crypto that’s skyrocketing in value can be dangerous. Steer clear of the urge to jump in when the price is already skyrocketing. Remember, patience is your best friend in situations like these.
  6. Learn from Past FOMO Instances: Take a moment to think about times when FOMO influenced your decisions. Learning from these situations helps toughen you up against its impact.

9. Neglect Diversification in Your Portfolio

Loads of people say diversification is the smart way to go and guess what? It’s just as true when it comes to cryptocurrencies. 

Imagine if you put all your money into just one type of crypto – that’s like betting everything on a single horse in a race. 

Super risky, right?

Why is this important?

Crypto markets are a bit like rollercoasters – one moment they’re up high, and the next, they’re down low. 

To handle this unpredictability, it’s smart to mix things up in your investment bag. 

Think of it as not putting all your sweets in one bag – if something goes wrong, you’ve still got some treats left. 

Diversifying your investments means spreading them out, so if one thing doesn’t go as planned, it doesn’t spoil the whole party.

Tips to follow:

  1. Understand the Risks of Overconcentration: Concentrating your investments in just a few coins can make the ups and downs hit you harder. Sure, you might make a lot, but you could also lose a bunch.
  2. Spread Across Different Assets: Diversify your holdings across various cryptocurrencies rather than focusing on just one. Mix it up with large-cap, mid-cap, and small-cap coins.
  3. Explore Different Sectors: Cryptocurrencies span various sectors, each with its unique dynamics. Consider diversifying across sectors such as decentralized finance (DeFi), non-fungible tokens (NFTs), and utility tokens.
  4. Include Stablecoins: Adding stablecoins into your portfolio can act as a hedge during periods of high market volatility.
  5. Regularly Reassess Your Portfolio: As the markets change, your portfolio should change with them. So, every now and then, take a look at what you’ve got in your portfolio and make sure it fits with your plan and what’s happening in the market right now.

Read Also10 Best Cryptocurrencies to Buy as a Beginner

10. Trade on Unreliable Crypto Exchanges

The choice of a crypto exchange is a fundamental decision that can really affect how you trade. 

Trading on unreliable exchanges is akin to navigating stormy waters without a reliable compass – it exposes you to risks of security breaches, liquidity issues, and unreliable trading infrastructure.

Why is this important?

Crypto exchanges are like the middlemen when you’re buying or selling crypto. 

But, not all of them are reliable, and that can lead to problems like losing your money, lack of customer support, and facing security issues. 

So, picking a platform that’s well-known and trustworthy is key for a safe and smooth trading experience.

Tips to follow:

  1. Research Exchange Reputation: Before you decide to join an exchange, it’s a good idea to check out what people are saying about it. Look for reviews and feedback from other users in the crypto world – that way, you can get an idea of whether the platform is reliable or not.
  2. Verify Regulatory Compliance: Make sure the exchange adheres to regulatory standards in the jurisdictions where it operates. If it’s following the guidelines set by the authorities, it shows the exchange is serious about doing things the right way – legally and ethically.
  3. Assess Liquidity: Go for exchanges that have enough people trading – that’s what we call liquidity. It’s like making sure there’s a good crowd at a market. When there are lots of people buying and selling, it means you can trade your crypto without the prices jumping around too much.
  4. Look for Insurance Coverage: Some exchanges provide insurance coverage for user funds. This additional layer of protection can offer peace of mind in case of unexpected events.
  5. Explore Supported Assets: Ensure the exchange supports the cryptocurrencies you intend to trade. Having a variety of options lets you try out different investment opportunities. 
  6. Check for Red Flags: Watch out for exchanges that have a dodgy past – like security breaches, frequent downtime, or a lack of transparency. If you spot any red flag, it’s like a signal to dig deeper before putting your trust in that platform.

Read Also: 5 Most Reliable Crypto Exchanges to Use

11. Fail to Double-check Wallet Addresses Before Transactions

In crypto transactions, a single mistake can have irreversible consequences. 

Many people forget to check their wallet addresses before they send money, and that mistake can really cost you.

Why is this important?

Once you send money in the world of crypto, you can’t undo it, and getting it back is tricky. 

If you accidentally type in the wrong wallet address, your money could end up going to the wrong person, and you can’t get it back. 

Checking your wallet address before sending money makes sure it goes to the right place.

Tips to follow:

  1. Copy and Paste: Whenever you can, just copy and paste your wallet address. Typing it out by hand raises the chances of making mistakes.
  2. Triple-Check Recipient Details: Before you hit that ‘confirm’ button, take a good look at where your money is going. Check the starting and ending bits of the recipient’s wallet address to make sure everything matches up.
  3. Use QR Codes: If you can, use QR codes to scan wallet addresses. This minimizes the risk of manual entry errors.
  4. Start with a Test Transaction: If you’re dealing with a new wallet or address, think about sending a small test of money first. This way, you can make sure the address is right without risking a big chunk of your funds.

Read Also: The Difference Between SegWit and Legacy Bitcoin Addresses

12. Neglect to Educate Yourself About Market Cycles

Jumping into the world of crypto investments without understanding market cycles is like navigating a big sea without knowing about the tides and currents.

Why is this important?

Cryptocurrency markets are dynamic and undergo distinct phases known as market cycles. 

These cycles, characterized by periods of expansion (bull markets) and contraction (bear markets), have a profound impact on asset prices and investor sentiment.

If you don’t catch on to these cycles, you might miss out on good opportunities, make decisions based on emotions, and even end up losing money.

So, understanding these market cycles is a smart move to stay on top of the game!

Tips to follow:

  1. Recognize Bull and Bear Markets: Educate yourself about bull and bear markets. Bull markets are the upbeat ones, with prices going up, everyone feeling positive, and lots of buying going on. Bear markets, on the other hand, involve falling prices, people feeling a bit negative, and more selling happening.
  2. Study Historical Price Patterns: Take a look at the historical price charts to identify recurring patterns and trends. Historical data can provide valuable insights into how the market has behaved during various cycles.
  3. Understand Market Psychology: Market cycles are influenced by investor sentiment and psychology. Get to know the signs when everyone is super excited (euphoria), totally scared (fear), or throwing in the towel (capitulation), as these emotions often drive market movements.
  4. Learn About Market Indicators: Get to know the important market indicators such as moving averages, RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and others. These indicators can provide insights into potential trend reversals.
  5. Use Technical and Fundamental Analysis: Combine technical analysis (chart patterns, indicators) with fundamental analysis (project fundamentals, news) to make well-informed decisions during different phases of the market cycle.
  6. Prepare for Market Corrections: Corrections are a natural part of market cycles. Be mentally prepared for market downturns and use them as opportunities to reassess your portfolio and identify potential buying opportunities.
  7. Keep a Long-Term Perspective: While short-term trading can be profitable, maintaining a long-term perspective helps you weather the ups and downs of market cycles. Consider the overall trajectory of your investments.

Read Also: Crypto Trading Strategies for Different Market Conditions

13. Day Trade Without Sufficient Knowledge and Experience

Jumping into crypto day trading is like setting sail on an exciting adventure, full of the promise of fast money. 

But, imagine trying to navigate unknown waters without a map – that’s what it’s like if you don’t have enough know-how and experience.

Why is this important?

Day trading means making quick decisions in a market that can change a lot. 

If you don’t know much or haven’t had enough practice, you might end up making rushed choices, trading based on feelings, and losing a lot of money. 

To handle the ups and downs of day trading, it’s crucial to really get how the market works and build up your skills through experience.

Tips to follow:

  1. Educate Yourself: Before you dive into day trading, take some time to understand market indicators, technical analysis, and trading strategies. A good understanding of these things is like a solid base for making smart decisions.
  2. Understand Market Trends: Take a look at how prices behaved in the past and understand market trends. If you can spot patterns and trends, it’ll make it easier for you to make better guesses about what might happen.
  3. Practice with Paper Trading: Before you start using real money for day trading, think about trying out your strategies on paper trading first. It’s like a practice run that lets you polish your skills and feel more sure of yourself without any money on the line.
  4. Start with Small Capital: Start with a small amount of money you won’t miss if things don’t go well. This way, if there are any losses, it won’t hit you too hard, and you can still gain experience.

14. Keep Large Amounts of Crypto on Exchanges

Thinking about leaving your cryptocurrency on exchanges might seem like a good idea because it’s convenient for quick trades. 

However, there’s a big risk in keeping a lot of crypto on exchanges – it’s a bit like leaving your valuable stuff out in the open instead of locking it up in a safe place.

Why is this important?

Even though exchanges try to be secure, they can still get hacked or face other problems. 

If you keep loads of cryptocurrency on exchanges, there’s a higher chance of losing your money if there’s a security issue. 

Storing your crypto away from exchanges gives you more control and keeps your coins safer.

Tips to follow:

  1. Use Hardware Wallets: Hardware wallets, such as Ledger or Trezor, are physical devices that store your private keys offline. They provide an extra layer of security by keeping your crypto away from internet-connected devices.
  2. Explore Paper Wallets: Paper wallets involve printing or writing your private keys and public addresses on paper. Kept in a secure location, paper wallets offer a cold storage solution.
  3. Diversify Storage Methods: Spread your holdings across different storage methods. This mix-and-match approach helps lessen the risk in case one storage method has a problem.

Read Also: 10 Biggest Crypto Exchange Hacks in History

15. Invest in ICOs Without Thoroughly Vetting Them

Investing in Initial Coin Offerings (ICOs) can be a thrilling venture, offering early access to potentially groundbreaking projects. 

However, diving into ICOs without thorough vetting is akin to blindly boarding a ship without inspecting its seaworthiness.

Why is this important?

ICOs present a unique investment opportunity but there’s the risk of scams, regulatory issues, and project failures. 

Taking the time to thoroughly check things out properly before diving in helps you pick out the legitimate projects and avoid the not-so-great bits, making sure your investments stay safe and sound.

Tips to follow:

  1. Understand the Project: Before diving in, make sure to get to know the ICO project properly. Give the whitepaper a good read, check out what the project aims to achieve, and think about how realistic and special its ideas are.
  2. Assess the Team: Check out the backgrounds of the project’s team members. Verify their expertise, experience, and track record in relevant fields. A competent team is crucial for project success.
  3. Community and Social Presence: Check out the project’s community – a lively and active community usually means they’re onto something good. Evaluate their social channels, forums, and how much the community is buzzing about them.
  4. Tokenomics and Use Case: Take a look at tokenomics – the distribution, utility, and scarcity of the tokens. Make sure the token has a clear use case within the project ecosystem.
  5. Partnerships and Collaborations: Established partnerships with reputable entities enhance a project’s credibility. Double-check any partnerships or collaborations they talk about to make sure they’re legitimate.
  6. Check for Red Flags: Be vigilant for red flags such as unrealistic promises, lack of transparency, anonymous teams, or overly complex structures. Exercise caution if something seems too good to be true.
  7. Evaluate Token Distribution: Take a look at how the tokens are shared between the team, advisors, the community, and the project’s treasury. Unfair distribution can be a cause for concern.

Read Also: What is an ICO in Crypto and How Does it Work

16. Share Too Much Information About Your Crypto Holdings Online

In today’s world of social media and being constantly connected online, we’re all used to sharing stuff without a second thought. 

But, when it comes to your crypto, putting too much out there is a bit like shouting to the world where you’ve hidden your treasure and what’s inside. 

It’s like an open invitation for digital pirates to come snooping around.

Why is this important?

Cryptocurrencies operate in a decentralized and pseudonymous environment. 

If you start telling everyone online about how much crypto you’ve got, it’s like putting up a sign saying, “Come and try to mess with my crypto!” 

That opens the door to all sorts of dodgy things like scams and attacks on your online security.

To keep your crypto safe, it’s vital to keep some things to yourself.

Tips to follow:

  1. Avoid Publicizing Specific Holdings: Resist the temptation to disclose specific details about your crypto holdings, including the quantity and types of assets you own.
  2. Use Pseudonyms: Consider using pseudonyms or usernames that do not reveal your real identity when participating in crypto forums or online discussions.
  3. Beware of Phishing Attempts: Don’t be too quick to trust messages that pop up out of the blue, especially if they’re asking about your crypto holdings. Take a step back and check if they’re legit before sharing anything. 
  4. Use Dedicated Email Addresses: Think about having different email addresses just for your crypto-related activities. This way, it’s harder for anyone to connect your crypto moves to your personal info.
  5. Educate Close Contacts: Inform friends and family about the importance of keeping your crypto holdings private. Their awareness can help prevent inadvertent disclosures.

17. Neglect to Have a Backup of Your Wallet’s Recovery Phrase

In the crypto realm, think of your recovery phrase as the master key to your digital fortress. 

Neglecting to have a backup of this essential passphrase is akin to locking yourself out of your own stronghold.

Why is this important?

Your wallet’s recovery phrase is the lifeline to your crypto holdings. 

If lost or compromised, accessing your funds becomes nearly impossible. 

Having a secure backup ensures that, even in the face of unexpected events, you can regain control of your crypto assets.

Tips to follow:

  1. Understand the Significance: Understand how crucial your recovery phrase is for recovering your crypto holdings. Treat it as the ultimate key to your digital vault.
  2. Create a Physical Backup: Grab a pen and jot down your recovery phrase on something durable and waterproof. Consider using materials like metal or special recovery phrase backup devices for long-term durability.
  3. Store in a Secure Location: Keep the physical backup in a secure and accessible location. Consider options like a safe, safety deposit box, or another location known only to you.
  4. Make Multiple Copies: Create multiple copies of the recovery phrase backup and store them in different secure locations. This ensures redundancy and safeguards against the risk of a single point of failure.
  5. Avoid Digital Storage: Resist the temptation to store your recovery phrase digitally, especially in cloud-based services or unsecured devices. Physical backups are less susceptible to hacking and digital vulnerabilities.
  6. Share Information Selectively: If you decide to share the location of your physical backup with a trusted individual, ensure it’s someone with whom you have an established level of trust and discretion.
  7. Test Recovery: Periodically test the recovery process using your backup phrase. This ensures that the backup is accurate and functional.

Read Also: How to Backup Your Crypto Wallet

18. Forget to Take Profits

In the thrilling and sometimes surprising realm of crypto investments, forgetting to take profits is like cultivating a bountiful garden but neglecting to harvest the ripe fruits. 

Why is this important?

Crypto markets are known for their volatility, and asset values can experience rapid fluctuations. 

Failing to take profits can result in missed opportunities, as well as the risk of losing gains during market downturns.

It’s essential to strike a balance between maximizing returns and mitigating potential losses.

Tips to follow:

  1. Set Clear Profit Targets: Set some clear goals for how much profit you want to make with your investments. It could be a percentage increase or reaching a particular price – whatever suits your plans. Having these goals in mind helps you make smart decisions.
  2. Regularly Review Your Portfolio: Now and then, take a look at how your investments are doing. Check if they’ve hit or gone beyond the profit goals you set.
  3. Implement Trailing Stop-Loss Orders: Trailing stop-loss orders automatically adjust as the price of an asset rises. They lock in profits while allowing for potential further upside.
  4. Take Partial Profits: Instead of liquidating your entire position, consider taking partial profits. This allows you to benefit from gains while maintaining exposure to potential further upside.
  5. Reinvest Wisely: When taking profits, consider reinvesting them strategically. This could involve allocating funds to new opportunities or rebalancing your portfolio for optimal performance.
  6. Avoid Greed and FOMO: Greed can cloud judgment. Stick to your profit-taking plan and resist the temptation to hold on for unrealistic gains.

19. Overtrade and Incur Unnecessary Transaction Fees

In crypto trading, the urge to be constantly active can lead to overtrading, resembling a gardener tending to a plant too much and hindering its growth. 

Why is this important?

Overtrading means you’re doing too much buying and selling, usually because of emotions, impatience, or wanting to always be in the market action. 

This can end up costing you more in transactions, putting you at greater risk in the market, and even causing financial losses. 

To steer clear of these problems, it’s crucial to stick to a disciplined and well-thought-out strategy.

Tips to follow:

  1. Define Your Trading Plan: Make sure you’ve got a clear and well-defined trading plan that includes your investment goals, risk tolerance, and target profits. Having a plan helps you stay focused and avoid impulsive decisions.
  2. Set Realistic Goals: Set goals for your trading that make sense and are doable. Steer clear of targets that force you to trade all the time, as that can push you into overtrading mode. 
  3. Focus on Quality, Not Quantity: Focus more on making good-quality trades instead of just doing lots of them. Look for opportunities that you’ve researched well and that have a high chance of success, rather than always hunting for new trades. It’s about aiming for quality over quantity in your trading game.
  4. Avoid Chasing the Market: Resist the urge to chase the market or make impulsive trades based on short-term price movements. Patience is a virtue in trading.
  5. Calculate Transaction Costs: Be aware of the transaction costs associated with each trade. Regularly incurring transaction fees can significantly impact your overall profitability.
  6. Take Breaks: Give yourself breaks from the constant monitoring of the market. Overtrading can be fueled by a constant need to be active, so taking breaks helps maintain a clear and focused mindset.

20. Invest Without Understanding the Potential Impact of Inflationary and Deflationary Mechanisms in Tokens

Investing in the crypto realm without understanding the potential impact of inflationary and deflationary mechanisms is like embarking on a journey without a map. 

Why is this important?

Inflation and deflation mechanisms in tokens play a pivotal role in determining their long-term value, supply dynamics, and overall market behavior. 

A lack of understanding can lead to misinformed investment decisions, exposing you to unnecessary risks and missed opportunities.

Tips to follow:

  1. Understand Tokenomics: Tokenomics refers to the economic model of a crypto. It includes factors such as the token’s total supply, distribution mechanisms, and how new tokens are introduced into the market.
  2. Differentiate Between Inflation and Deflation: Inflationary tokens increase their supply over time, potentially diluting the value of existing tokens. Deflationary tokens, on the other hand, decrease their supply, typically by implementing mechanisms like token burns.
  3. Research the Token’s Supply Mechanism: Investigate how the token’s supply is managed. Some tokens have fixed supplies, while others may have mechanisms for ongoing minting or burning. Understand how these mechanisms impact the token’s scarcity and value.
  4. Evaluate Staking and Rewards: Tokens often use staking and reward mechanisms to incentivize users. Understand how these mechanisms contribute to inflation or deflation and how they may affect your overall returns.
  5. Examine Token Burn Policies: In deflationary tokens, burning involves destroying a portion of the token supply. Check the token burn policies and how they influence scarcity, as well as the potential impact on token value.
  6. Consider Economic Events: Economic events, such as token halvings or reductions in inflation rates, can significantly influence the token’s supply dynamics. Stay informed about these events and their potential effects on the market.


As we finish up our chat about the “20 things you shouldn’t do as a crypto investor/trader,” give yourself a little pat on the back – you’ve now got some handy knowledge that could be the key to either a big win or a bit of a stumble.

By steering clear of these slip-ups, you’re not just looking after your investments – you’re also making yourself tougher in the face of the market going a bit bonkers.

Remember, in the world of crypto, knowledge is your superpower.

So, by paying attention to the tips I’ve shared, you’re not just dodging problems; you’re carving out a way towards a safer and more prosperous crypto future.

Additional Resources

Excited to learn more about Bitcoin and cryptocurrencies? We’ve got some awesome resources below to help you out.

And guess what? We’re also on Instagram and Twitter(X). Join us there for even more fun and useful content!

Additional Resources:

20 Things You Should Never Do as a Crypto InvestorTrader

IMPORTANT; Don’t ever send money to someone online who says they’ll help you invest in cryptocurrency. They’re probably up to no good – you know, scammers and all.


The information provided here is intended for informational purposes only and should not be solely relied upon for making investment decisions. It does not constitute financial, tax, legal, or accounting advice. Additionally, I strongly recommend that you only invest in cryptocurrency an amount you are comfortable with potentially losing temporarily.

Read Also: Why You Keep Losing Money in Crypto

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