Jasmine Birtles
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Crypto Trading in Australia: 7 Beginner Mistakes That Can Cost You Big
Moneymagpie Team
31st Jul 2025
Cryptocurrency trading can be exciting fast-paced markets, the potential for big returns, and that feeling of being part of the future of finance. But for beginners in Australia, it’s also full of landmines that can wipe out profits, attract unwanted attention from the ATO, or leave you locked out of your own funds. If you’re just starting out, avoiding these common mistakes could save you a lot of stress (and money).
Let’s unpack the 7 biggest crypto trading mistakes Australian beginners make and how to avoid them.
- Jumping in Without a Strategy
- Thinking Crypto-to-Crypto Trades Aren’t Taxable
- Relying on Social Media for Trading Tips
- Using Unregulated or Overseas Platforms
- Ignoring Risk Management Tools
- Forgetting to Track Transactions
- Letting Emotions Take the Wheel
Final Thoughts: Start Smart, Stay Smart
1. Jumping in Without a Strategy
One of the most common blunders? Trading without a plan.
A lot of people dive into crypto after hearing a friend brag about gains or seeing a trending tweet. But without a strategy whether that’s day trading, swing trading, or long-term investing you’re just gambling. And in volatile markets like crypto, that’s a fast way to lose.
A good plan should include:
- Entry and exit points
- Risk tolerance
- How much capital you’re willing to lose
- Timeframes for holding
- Backup plans for market crashes
Document it. Stick to it. Update it as you learn.
2. Thinking Crypto-to-Crypto Trades Aren’t Taxable
Big mistake. In Australia, the ATO treats swapping one cryptocurrency for another as a disposal event meaning, yes, it’s taxable.
If you bought Bitcoin and traded it for Solana, you’ve made a transaction that could incur Capital Gains Tax (CGT). A surprising number of newbies are shocked by their tax bill because they thought they were only taxable when converting to AUD. That’s not the case.
Even moving crypto between your own wallets can trigger recordkeeping requirements.
3. Relying on Social Media for Trading Tips
X (formerly Twitter), Reddit, Telegram you name it. These platforms are buzzing with “gurus” pushing hot coins and buy alerts. But here’s the harsh truth: most of them aren’t looking out for you.
Some are pumping coins they already own. Others are guessing. A few might be bots.
Trusting anonymous accounts without doing your own research (DYOR) is a surefire way to get burned. Real traders develop their own systems, use technical and fundamental analysis, and base decisions on data not hype.
4. Using Unregulated or Overseas Platforms
It’s tempting to sign up with offshore exchanges offering no KYC checks, high leverage, or obscure altcoins. But in doing so, you’re taking on serious risk.
Australia has strict rules about crypto trading. The AUSTRAC and ASIC keep a close eye on compliance. Using unregulated platforms means:
- No legal protection if something goes wrong
- No easy access to customer support
- No guarantee your data or funds are safe
This is where many beginners fall into a trap. The moment something goes wrong like a withdrawal freezing or the platform going offline there’s little recourse.
Choose a regulated broker such as AvaTrade to learn how to trade crypto responsibly. Platforms that operate under ASIC oversight ensure your funds are protected and your trades are compliant with Australian law.
5. Ignoring Risk Management Tools
Crypto can move 10% in a day or an hour. That’s why risk management is not optional, it’s essential.
Beginners often:
- Put too much capital into a single coin
- Don’t use stop-loss orders
- Trade with leverage they don’t understand
If you’re not protecting your downside, it’s just a matter of time before a market dip wrecks your portfolio. Use stop-losses, diversify your trades, and set limits on how much you’re willing to risk per position.
6. Forgetting to Track Transactions
The ATO requires Australian crypto traders to keep detailed records for at least 5 years. That includes:
- Buy/sell dates
- AUD value at the time
- Wallet addresses
- Transaction purpose
But when you’re trading on multiple exchanges or doing frequent trades, this becomes a nightmare unless you’re tracking from day one. Use crypto tax software to automate it. You’ll thank yourself come tax time.
7. Letting Emotions Take the Wheel
FOMO (fear of missing out). Panic-selling. Revenge trading. We’ve all been there.
Emotional trading is the silent killer of portfolios. Maybe you jump into a coin that’s pumping because it’s “your last chance.” Or you sell at a loss because you’re scared. Or worse you double down after a loss, trying to “win it back.”
The best traders are boring. They follow the plan. They take profits when they said they would. They accept losses and move on.
Discipline beats adrenaline. Every time.
Final Thoughts: Start Smart, Stay Smart
Crypto is thrilling. The potential is huge. But the road is full of traps especially in Australia, where tax rules, regulation, and compliance are serious business.
Avoiding these beginner mistakes won’t guarantee you profits. But they will protect you from the most common ways people blow up their accounts, miss out on tax benefits, or end up under ATO scrutiny.
Start with education. Stick with regulated platforms. Build a plan and refine it over time.
You don’t need to rush because in crypto, those who last the longest usually win the most.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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