Having been in the crypto space for so many years, watching wave after wave of people rush in and then leave in frustration, the root cause often points to the same issue — failing to recognize the traps within trading. People losing money may seem different, but the pitfalls they fall into are actually just a few.

**Frequent traders suffer the most**

Many newcomers treat trading as a full-time job, watching the charts 24/7. They get anxious when they’re out of position, feeling uncomfortable without seeing candlesticks. This habit may seem diligent, but in reality, they are working the market with fees and slippage. The data shows — low-frequency traders can achieve an annualized return of 18.5%, while those who trade frequently only get 11.4%. The gap is significant.

I know a guy who’s always chasing gains and cutting losses — when Bitcoin rises 5%, he jumps in; when it drops 3%, he immediately cuts. Over half a year, he didn’t make any money but instead paid a bunch of fees. The real money-makers in crypto are never those who trade the most frequently. They wait for opportunities, not trade just for the sake of trading.

**Leverage is a double-edged sword; beginners should avoid it**

You often see forums where people boast, “Open 20x leverage and go all-in, win big and get rich overnight.” Just ignore that kind of talk. Using full margin and leverage is basically gambling — if you bet wrong, your account is gone. Data shows that the maximum drawdown for full-margin, high-leverage strategies can reach -54%.

Last year, there was a real case where a user borrowed money to open 20x leverage on a shitcoin, but the project team ran away, the coin’s price halved in a minute, and the account was wiped out. Cryptocurrency prices are already volatile like a roller coaster; adding leverage makes it even more intense. While gains are amplified, risks are also infinitely increased. The key lesson is to remind yourself repeatedly: only by staying alive can you see the next bull market.

The remaining two pitfalls — blindly following the crowd and emotional breakdowns — are the most deadly. But honestly, most people need to experience a few falls themselves to truly understand.