Why 95% of Traders Lose Money: A Breakdown of Key Mistakes by Rufat Abilov
Statistics don’t lie: 95–98% of people in financial markets lose money over the long term. And even if someone happens to make a profit in the short term by pure luck, they inevitably give that money back to the market — the balance always resets.
Over six years in the cryptocurrency market, earning millions of dollars and going from a complete beginner to the founder of a private investors’ club, I’ve seen the same mistakes over and over again. Every day, people come to me with the same problems, making the exact same miscalculations.
In this article, I’ll break down the main reasons traders fail and explain why the vast majority of market participants are destined to lose — and how to avoid that fate.
Mistake #1: The Illusion of Quick Money and Wrong Priorities
“People hesitate to spend money on education, yet they’re ready to blow their entire deposit on futures with maximum leverage.”
The Problem: Beginners enter the market wanting fast profits, skipping the stage of learning and understanding market mechanics.
The Reality: Someone with a $1,000–$5,000 deposit who barely breaks even in all their trading says, “Forget these courses, it’s all a scam. I’ll just follow a free Telegram channel and go long with 20x leverage.”
This is a greed-driven mindset. The problem isn’t the deposit size — it’s the thinking. With this approach, your capital will always hover around zero.
What happens in practice:
- They hesitate to spend on education, even though it could save them from countless mistakes
- They think: “Better to make money with this amount than spend it”
- They try to earn based on the “maybe I’ll get lucky” principle
- They lose their already small capital
- They get stuck in an endless vicious cycle
The Paradox: The poorer and less financially literate a person is, the more they believe they already know — and the less willing they are to change. The bigger their ego and overconfidence become.
Mistake #2: Misunderstanding Trading Instruments
“Spot is king — that’s the first rule in our club.”
The Misconception: Many believe that with a small deposit, spot trading isn’t worth it, so they jump straight into futures for the “big percentages.”
The Reality: It’s spot trading — not futures — that generates the big money.
Why spot is more effective than futures:
- Long-term profits: Invest $10,000 in the right assets at the right time → ride the entire trend → walk away with $100K+
- No funding fees: On futures, long positions get eaten away by funding costs
- Psychological comfort: With spot, you can patiently wait without the stress of liquidation
- Real results: Nobody could’ve bought Solana at $7 on futures and held until $200 — they would’ve taken profit much earlier
Example: Grab a quality asset on spot at the right time and hold until the climax, making 10–30x — that’s the real goal.
Mistake #3: Ignoring Market Psychology
“Markets can change, technologies can be created, but human psychology always stays the same.”
Key Insight: Trading is, first and foremost, psychology — technical analysis comes second.
The Cyclical Nature of Markets:
There’s a book where a man, 200–300 years before our era, predicted every major economic crisis right down to the year: 2008, 2020. How is that possible? Because everything is cyclical.
- Markets have both global and local cycles
- Crowd psychology hasn’t changed for centuries
- Manipulation works on the same principles over and over
How to Use Psychology:
- Analyze crowd behavior: Understand where average traders will buy and sell
- Predict mistakes: See where people will fear buying and where they’ll greedily load up
- Work with big players: Understand the logic of manipulations and “ride the coattails” of smart money
Important: Obvious technical patterns almost never play out in crypto. They’re drawn deliberately for retail traders who studied the standard textbooks.
Mistake #4: Poor Risk Management
“The main reason for losses isn’t being wrong about market direction — it’s bad risk management and psychology.”
Statistics: Most people lose money not because they’re “always wrong about the market,” but because they manage risk incorrectly.
The Right Approach to Risk:
My principle: 90% of capital in spot, 5–10% in futures. Even in futures, I apply risk management as if it were a separate deposit.
Example of Proper Calculation:
- Risk: 10% of the deposit
- Potential Profit: 100% of the deposit
- Ratio: 1 to 10
Real Case: An ORDI trade — $10,000 risk, profit of over $50,000.
What You Need to Know for Proper Trading:
“To become a good trader, you must know exactly what you’ll do in every possible market scenario.”
- Have a plan for each potential market outcome
- Set clear entry and exit levels
- Understand your position size
- Be ready for temporary drawdowns
Mistake #5: False Expectations from Education
“You can’t be taught trading — you can only learn it yourself.”
The Problem with Courses: Most training programs create the illusion that after learning theory, a person will instantly become a profitable trader.
Why Courses Don’t Work:
Think of it like sports: would you believe you could learn football or boxing just by buying a course from Messi or Tyson? Complex sports can only be mastered through countless hours of practice.
It’s the same with trading:
- You can know a lot of theory, but that doesn’t make you a good trader
- Books are useful for general knowledge, but they won’t teach you how to make money
- Reading alone won’t make you “see through the market”
The Right Learning Path:
- Learn from more experienced market participants
- Surround yourself with quality people and engage with professionals regularly
- Practice with a mentor — watch real actions in real time
- Take an individual approach to each situation
My Experience: I went through it all — from YouTube channels and free signal groups to buying multiple courses, hoping “maybe this time it will be different.” Nothing worked.
The only thing that helped was practicing alongside experienced traders and making my own mistakes with my own money.
Mistake #6: The Wrong Attitude Toward Drawdowns
“Every investor goes through major drawdowns before the bull run.”
The Psychological Trap: People aim for 1,000% gains but panic when facing a 30–50% drop.
The Right Way to See Drawdowns:
Historical example: Those who bought Bitcoin and sold it at $3,000 during the “corona dump” because of a 50% drop look just as ridiculous today as the panic sellers we see now.
The Reality: In their dreams of buying crypto and getting rich, people forget that they would inevitably have to endure major drawdowns along the way.
Principle: If you were bullish but panic when the market drops, you were never truly bullish — you just came here for quick money.
How to Handle Drawdowns the Right Way:
- Understand Cyclicality: Volatility works both ways
- Maintain a Long-Term Vision: Focus on the end goal, not short-term fluctuations
- Practice Patience: The hardest skill in the market
- Have Confidence in Your Assets: Buy quality projects at the right time
How to Avoid the Main Mistakes: Practical Tips
- Change Your Approach to Learning
• Invest in knowledge, not just assets
• Build a quality network of professionals
• Remember: the best investment is your personal brand and skills - Focus on Spot Trading
• Keep 90% of your capital in long-term spot positions
• Choose quality assets at the right time
• Have the patience to wait for results - Study Market Psychology
• Analyze crowd behavior
• Understand the logic of big players
• Leverage the cyclical nature of markets - Develop Proper Risk Management
• Never risk your entire deposit
• Maintain a 1:10 risk-to-reward ratio
• Have a plan for every possible scenario - Adopt the Right Mindset Toward Drawdowns
• Accept their inevitability
• Avoid emotional decision-making
• Keep your focus on long-term goals
Conclusion: The Path to Successful Trading
Core Truth: Success in trading doesn’t come from studying theory or buying courses — it comes from hands-on experience alongside professionals, a proper understanding of market psychology, and iron discipline in risk management.
The statistics remain relentless: 95% of market participants continue to lose money, repeating the same mistakes. But everyone has a choice — stay part of that statistic or put in the work to join the 5% of successful traders.
Remember: The market is not a place for quick money. It’s a profession that demands years of learning, constant growth, and unshakable psychological resilience.
Those who understand these principles and commit to them have a real chance to succeed. The rest will remain part of the sad statistics.
Author: Rufat Abilov — professional trader with 6 years of experience in the cryptocurrency market, founder of a private investors’ club, and a multimillion-dollar crypto trader. Author of numerous accurate forecasts and strategies, who has helped hundreds of people achieve profitability in trading.
