Hey guys.
In this post I will tell you how I lost quite a lot of money on trading, at today's rate it is about $ 250,000, and you will learn what mistakes led to this.
🎯Volatile instruments were chosen for trading, that is, altcoins, and although with a fairly high capitalization, volatility is still much higher compared to the main cryptocurrencies ETH and BTC.
🎯The time for opening long positions (and trading was built from Long) was not chosen well, since there was a downtrend in cryptocurrencies.
🎯Using the cross margin mode, positions were opened for the entire deposit on the account, when the collateral for the exchange loan, and the margin is nothing more than a loan, is your entire balance. The margin was small, about 3x, but with a 30% drop in price, this is almost a 100% loss of the collateral.
🎯The number of coins for trading was too large, at that time the number of positions was about 10 and there was not enough attention and time to control the situation in each coin.
🎯Well, and perhaps the main thing that led to the liquidation was the lack of a stop. Sometimes this is allowed, for example, in spot trading or DCA, HODL trading strategies, but in this case, since margin was used, it was speculative trading and the stop was mandatory, but it was not there.
🎯And another factor that probably would have saved my deposit is that, at the time of the market fall, I did not have access to a computer and I was on the road. In case of unforeseen situations (force majeure, absence from the computer, urgent matters), you should always have protection for your positions in the form of a stop.
🎯And lastly - self-confidence, this is when you yourself begin to believe in the idea that you came up with, but it differs from the realities of the market. And then you start trying to prove to the market that it is wrong, the efficiency as you understand and the chances of success are low.
Here are some assets that were liquidated.
XLM - 180K - $90,000
XRP - 10K - $25,000
TRON - 50K - $25,000
UNI, TRON, DYDX, COMP, ARB - about $100,000 more
✅ What conclusions can be drawn.
📌 The main part of the cryptocurrency portfolio should consist of the following proportions: BTC - 30%, ETH - 30%, USDT-20%, Alts-20%. The numbers may change depending on the market cycle, but the proportions should be observed.
📌 Sometimes it is better to be out of position. If the market is in a downtrend, do not try to trade against the trend.
📌 The margin should be isolated. If you still decide to use borrowed funds, do not risk the entire deposit, but use the isolated margin mode.
📌The number of altcoins for trading is no more than 5.
📌There must be a stop, period.
📌Always build your trading from a stop, think how much you can lose and only then how much you can earn.
📌Regularly criticize your ideas, take into account opposing opinions.
Mistakes are expensive, but useful if you learn from them.
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