Why You Lose After Opening a Trade: A Closer Look:
If you're wondering why most of your trades end in losses, you're in the right place. Let's break it down with a simple scenario to better understand how it happens.
**Scenario:**
There are about 560 million crypto traders worldwide. If 20% of them decide to trade the same coin at the same time, that's 112 million traders.
Now, let's assume each trader invests $10. That amounts to $1.12 billion being traded on that coin at the same time. Out of this $1.12 billion, roughly 80% or more will get liquidated, meaning only 20% or less will take the liquidity and come out on top. In numbers, thatâs $896 million lost by the majority and $224 million gained by a few.
Now, think about traders who invest more than $10âsay, $100, $1,000, $10,000, or even more. The stakes get higher, but the odds remain the same. What are the chances of being among the 20% who win?
As you reflect on this, consider the steps you can take to reduce the risk of being part of the 80% who likely get liquidated.
Stay informed, trade smart.
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