Avoiding Rookie Mistakes

“Every trader will eventually learn that the market punishes arrogance and rewards humility.” -Linda Raschke

Trading crypto perps can be exciting — but without discipline, it’s easy to turn a promising strategy into a blown account. This page walks through the most common rookie mistakes and how to avoid them with practical tips and mindset shifts.

1. Overleveraging

Mistake: Using 20x+ leverage on volatile assets hoping for quick gains.
Consequence: A 5% move against you can liquidate your position entirely.

✅ Fix:

• Stick to 3x–5x leverage as a max (or lower when starting out)

• Use smaller size with tighter risk instead of boosting leverage

• Focus on building capital through consistency, not gambling

2. Not Using Stop-Losses

Mistake: Refusing to set stop-losses because you “believe” the price will come back.
Consequence: You become a bagholder or get liquidated without a plan.

✅ Fix:

• Define your stop before opening a trade

• Use hard stops in volatile markets to limit downside

• Accept small, planned losses as part of the game

“Plan your exit before you enter.”

3. Revenge Trading After a Loss

Mistake: Doubling down or opening new trades emotionally after taking a hit.
Consequence: Stack losses quickly and blow up your account.

✅ Fix:

• Take a 15-minute break after every stop-loss

• Set a “2 losses per day” rule

• Journal what triggered the loss and move on

4. Ignoring the Funding Rate

Mistake: Holding a long position during extreme bullish sentiment and paying huge funding fees.
Consequence: Your PnL gets eaten by fees even if price stays flat.

✅ Fix:

• Monitor the funding rate before holding perps long-term

• If funding is high, consider reducing size or switching to spot

• Use exchanges with lower fees or zero funding windows during volatile periods

5. Going All In / YOLO Trading

Mistake: Betting your entire account on a single “high-conviction” idea.
Consequence: One mistake ends your trading journey.

✅ Fix:

• Follow a portfolio risk rule: never risk more than 2% of your total capital per trade

• Diversify positions and scale in if necessary

• Think long-term: capital preservation > short-term glory

6. No Trade Journal or Review Process

Mistake: Not tracking trades, emotions, reasons, or mistakes.
Consequence: You keep repeating poor behavior without realizing it.

✅ Fix:

• Maintain a simple trade journal with these fields:

• Setup / thesis

• Entry, stop, and target

• Outcome (win/loss and why)

• Emotions felt

• Review trades weekly and look for patterns (good and bad)

7. Chasing Pumps or FOMO Trading

Mistake: Entering trades after large green candles out of fear of missing out.
Consequence: You’re often the exit liquidity for early buyers.

✅ Fix:

• Have pre-defined entries based on setups, not emotion

• Set alerts and wait for pullbacks or confirmation

• Let the trade come to you — don’t chase

8. Trading Too Many Pairs at Once

Mistake: Trying to trade 5+ markets simultaneously without proper focus.
Consequence: Overwhelm, decision fatigue, and sloppy execution.

✅ Fix:

• Focus on 1–3 assets you understand well (like SUI, ETH, BTC)

• Specialize before expanding your scope

• Quality setups > quantity of trades

9. Not Accounting for Slippage or Liquidity

Mistake: Entering a large position in a low-liquidity market and getting filled far from expected price.
Consequence: Worse entry, poor stop fill, or unintended liquidation.

✅ Fix:

• Check the order book depth before entering

• Avoid trading obscure altcoins with thin books

• Stick to perps with high 24h volume and tight spreads

10. Believing You’re Smarter Than the Market

Mistake: Refusing to cut losses or adjust strategy because of ego.
Consequence: The market humbles you — hard.

✅ Fix:

• Be flexible. Adapt when market conditions change.

• Accept being wrong as part of the profession.

• Confidence is good — but humility keeps you solvent.

🧠 Golden Rule

“Your #1 job is not to make money. It’s to not lose money.

Approach every trade as a risk manager first, and a speculator second.

📌 Recap: Rookie Mistake Checklist

✅ Use stop-losses on every trade

✅ Don’t exceed 2% risk per trade

✅ Avoid revenge and emotional trades

✅ Monitor funding rates before holding

✅ Log and review every trade

✅ Focus on process, not outcome

PreviousReal Trading Scenarios NextZLP Overview

Last updated 1 month ago

Avoiding Rookie Mistakes

“Every trader will eventually learn that the market punishes arrogance and rewards humility.” -Linda Raschke

1. Overleveraging

Mistake: Using 20x+ leverage on volatile assets hoping for quick gains.
Consequence: A 5% move against you can liquidate your position entirely.

✅ Fix:

• Stick to 3x–5x leverage as a max (or lower when starting out)

• Use smaller size with tighter risk instead of boosting leverage

• Focus on building capital through consistency, not gambling

2. Not Using Stop-Losses

Mistake: Refusing to set stop-losses because you “believe” the price will come back.
Consequence: You become a bagholder or get liquidated without a plan.

✅ Fix:

• Define your stop before opening a trade

• Use hard stops in volatile markets to limit downside

• Accept small, planned losses as part of the game

“Plan your exit before you enter.”

3. Revenge Trading After a Loss

Mistake: Doubling down or opening new trades emotionally after taking a hit.
Consequence: Stack losses quickly and blow up your account.

✅ Fix:

• Take a 15-minute break after every stop-loss

• Set a “2 losses per day” rule

• Journal what triggered the loss and move on

4. Ignoring the Funding Rate

Mistake: Holding a long position during extreme bullish sentiment and paying huge funding fees.
Consequence: Your PnL gets eaten by fees even if price stays flat.

✅ Fix:

• Monitor the funding rate before holding perps long-term

• If funding is high, consider reducing size or switching to spot

• Use exchanges with lower fees or zero funding windows during volatile periods

5. Going All In / YOLO Trading

Mistake: Betting your entire account on a single “high-conviction” idea.
Consequence: One mistake ends your trading journey.

✅ Fix:

• Follow a portfolio risk rule: never risk more than 2% of your total capital per trade

• Diversify positions and scale in if necessary

• Think long-term: capital preservation > short-term glory

6. No Trade Journal or Review Process

Mistake: Not tracking trades, emotions, reasons, or mistakes.
Consequence: You keep repeating poor behavior without realizing it.

✅ Fix:

• Maintain a simple trade journal with these fields:

• Setup / thesis

• Entry, stop, and target

• Outcome (win/loss and why)

• Emotions felt

• Review trades weekly and look for patterns (good and bad)

7. Chasing Pumps or FOMO Trading

Mistake: Entering trades after large green candles out of fear of missing out.
Consequence: You’re often the exit liquidity for early buyers.

✅ Fix:

• Have pre-defined entries based on setups, not emotion

• Set alerts and wait for pullbacks or confirmation

• Let the trade come to you — don’t chase

8. Trading Too Many Pairs at Once

Mistake: Trying to trade 5+ markets simultaneously without proper focus.
Consequence: Overwhelm, decision fatigue, and sloppy execution.

✅ Fix:

• Focus on 1–3 assets you understand well (like SUI, ETH, BTC)

• Specialize before expanding your scope

• Quality setups > quantity of trades

9. Not Accounting for Slippage or Liquidity

Mistake: Entering a large position in a low-liquidity market and getting filled far from expected price.
Consequence: Worse entry, poor stop fill, or unintended liquidation.

✅ Fix:

• Check the order book depth before entering

• Avoid trading obscure altcoins with thin books

• Stick to perps with high 24h volume and tight spreads

10. Believing You’re Smarter Than the Market

Mistake: Refusing to cut losses or adjust strategy because of ego.
Consequence: The market humbles you — hard.

✅ Fix:

• Be flexible. Adapt when market conditions change.

• Accept being wrong as part of the profession.

• Confidence is good — but humility keeps you solvent.

🧠 Golden Rule

“Your #1 job is not to make money. It’s to not lose money.

Approach every trade as a risk manager first, and a speculator second.

📌 Recap: Rookie Mistake Checklist

✅ Use stop-losses on every trade

✅ Don’t exceed 2% risk per trade

✅ Avoid revenge and emotional trades

✅ Monitor funding rates before holding

✅ Log and review every trade

✅ Focus on process, not outcome

PreviousReal Trading Scenarios NextZLP Overview

Last updated 1 month ago