Why 90% of Crypto Traders Lose Money

When I first joined the crypto space, I always use to wonder why is it that some people will make money from crypto space and some people will not make money from the crypto space. What might have actually been wrong? Well growing up, I now understand much more better.

You see this Crypto trading that all of us always talk about, is now very popular, especially in Nigeria. Many people join the crypto space with the hope of making fast money. They see others posting profits on WhatsApp, X (Twitter), and Telegram, and they quickly want to start trading too so that they can make their profit or become a millionaire overnight just as I always imagine in my early days trading.

But along the way, a lot of crypto traders always lose money and what might have been the cause. Well for me, I will say it start from lack of proper knowledge. Like I said earlier, Many people jump into trading without understanding what they are doing. They hear “buy Bitcoin,” or “this coin is pumping,” and they rush to buy without studying the market.

One of the things I personally have come to discover is the fact that Crypto is not just about clicking “Buy” and “Sell.” It involves learning about Chart reading which we call technical analysis. Not only that, you need to learn the coin fundamentals, market trends and risk management. These are some of the things people did not learn and at the end of the day, it actually affected them greatly.

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The second mistake or reason that I have come to discover that leads to people to lose money is the fact that they always trade with their emotions. I mean they trade with their emotions like Fear, Greed and even Hope. There are sometimes that when the price is falling, they panic and sell at a loss. For some people, when the price rises, they become greedy and buy too late. And in some cases, when they are losing, they keep hoping it will bounce back. This kind of emotional trading is dangerous. Successful traders use a plan, not feelings.

The next reason why a whole lot of people lose money in the crypto space is the fact that they did not have a trading strategy. A good trader has a strategy. That means you should know when to enter a trade, when to take profit, when to stop loss. But many people just follow hype. They trade based on what a friend or influencer says on Telegram or YouTube.
If you don’t have a clear plan, you are just gambling. And in gambling, the house always wins.

The other major reason people fail to pay attention to is the fact that they overtrade. I personally suffer from this also in my early days and even till now sometimes. Some people open too many trades every day. They think the more they trade, the more money they will make. But the truth is, the more you trade, the more chances you have to make mistakes.

From my own personal experience, overtrading can lead to stress, emotional decisions, loss of focus, and even sometimes you can end up paying more fees to the exchange. Sometimes, the best trade is no trade. Patience is key in crypto trading.

As I conclude, always use stop loss also.
Stop loss is a tool that closes your trade automatically if the market goes against you. It helps to limit your loss. But many people don’t use stop loss. They say, “It will come back.” Some even go to sleep while a trade is still open. Sadly, some coins never bounce back. They keep falling and may even go to zero. Always use stop loss. It’s like a safety belt in a car.

Crypto trading can be profitable, but only if you take it seriously. Many people lose money because they don’t learn, don’t plan, and don’t control their emotions.