Risk Management Mistakes Retail Traders Repeat in Crypto
Most traders don’t fail because their strategy is bad — they fail because their risk management is inconsistent. Even good setups can’t survive poor risk habits.
One common mistake is risking more after losses. Traders feel pressure to “make it back” and increase position size. This turns normal drawdowns into account-ending events.
Another mistake is placing stops where everyone else does. Obvious stop placement makes trades vulnerable to liquidity sweeps. Stops should protect your idea, not follow the crowd.
Many traders also focus only on entries and ignore exits. They enter with confidence but hesitate to take profits, hoping for more. Small wins turn into break-evens. Good trades become wasted effort.
Overtrading is another silent killer. Being in the market constantly creates emotional fatigue and reduces decision quality. No position is often the best position.
Risk management isn’t about avoiding losses — losses are part of trading. It’s about controlling damage so winners can matter.
Survival comes before profits. Always.
