The financial market always moves in cycles, including periods of strong growth interspersed with deep corrections. Last week, many experienced liquidation when the market corrected sharply, especially for positions using high leverage. Witnessing the price of Altcoins or Bitcoin rise above the price at which you entered is an unforgettable experience, and you might be blaming yourself: 'If only I hadn't used high leverage...'. But remember, every loss carries a valuable lesson.
Why You Shouldn't Use High Leverage?
High leverage is a double-edged sword. It can help you double or even triple your profits in a short time, but on the flip side, just a small movement in the opposite direction can lead to losing all your capital.
The cryptocurrency market, especially during a bull market, often experiences extremely strong pullbacks. These drops are sharp and deep enough to 'wipe out' high leverage positions in just a few minutes. Therefore, instead of focusing on getting rich quickly, prioritize preserving your capital.
SPOT Trading – A Safe, Sustainable Choice
If you have enough capital to trade, consider Spot Trading. While the speed of profit-making may be slower compared to using leverage, it is a less risky trading method, especially during highly volatile market periods. You won't have to deal with the pressure of margin loans, nor fear liquidation. More importantly, Spot Trading helps you maintain a comfortable mindset and focus on the long term.
Important Lessons from Failure
Accepting pullbacks as part of the market: No market only goes up without going down. Understand that corrections are necessary to maintain sustainable growth.
Don't let greed cloud your judgment: The hope of getting rich quickly often leads to losses. Set sustainable goals and maintain trading discipline.
Trust the process: Investing is a long-term journey. Making steady, slow but sure profits will help you achieve wealth and sustainability.
Advice for Investors
Limit the use of leverage, especially during periods of high market volatility.
Build a specific trading plan and stick to it.
Always prioritize capital safety. When the market is too volatile, it is best to stay on the sidelines and observe rather than trying to participate.
Remember, successful investing is not about never losing, but about how you learn from failures and keep moving forward. Trust the process, and you will reap the rewards you deserve.
