[ Lesson 05 · 8 min ]
Step 5 — Avoid the obvious ways beginners lose money
Rugs, fake tokens, drainer links and the small habits that keep your wallet alive.
Most new coins go to zero
Anyone can launch a coin on pump.fun in a minute for almost nothing, so thousands appear every day and only a tiny percentage are still worth anything a week later. That is normal and expected — assume any new coin is worthless until it proves otherwise.
Quick checks before you buy
Thirty seconds of looking will filter out most of the worst ones.
- Holder distribution: if one or two wallets hold a huge share, they can dump on you.
- Age and volume: brand new with almost no trades means you may not be able to sell.
- Socials: a link that goes nowhere, or a copied account with no history, is a red flag.
- Ticker copies: a famous name means nothing — check the contract address.
Wallet safety habits
Nearly every drained wallet comes from the same handful of mistakes.
- Use a separate 'trading' wallet in Phantom, not the one holding your savings.
- Never enter your 12 words into any website, ever, for any reason.
- Ignore airdrop DMs, free-mint links and 'support' offering to help you.
- Read what you are signing — if a prompt asks for full access to your tokens, reject it.
- Random tokens that appear in your wallet: do not touch them, do not try to sell them.
Money rules for beginners
Only trade money you can lose entirely. Take your original stake out when a trade doubles, so the rest is house money. Do not borrow, do not chase a loss, and do not go bigger because the last one worked.