Experts gave “harmful advice” about what to do to lose your funds when trading digital money
Cryptocurrencies belong to the class of high-risk assets. This is a young and extremely volatile market that can lead to losses. You can lose all the funds on it in different ways. Experts talked about what needs to be done to incur serious losses.
In order to guarantee losing your deposit, Anton Kravchenko, CEO of Xena Financial Systems, recommended trading cryptocurrency with a leverage above x5. According to the expert, in this case, strong market fluctuations and commissions for a large number of transactions will reset the capital.
Kravchenko also advised to buy unknown tokens of new projects in order to receive losses. He explained that good projects cannot be bought by people “from the street” at the start.
“If you were given to buy some project at the start with a small capital, then it is most likely a bad project,” Kravchenko stressed. He also added that you can lose money by investing it in DeFi projects with an interest rate above 25% per year, because they have too large hidden risks of protocols.
You can incur financial losses if you open a position without an idea – for luck, said Vitaly Kirpichev, Director of Development at TradingView in Russia. According to him, this approach is similar to a casino game and cannot be applied to system trading on the stock exchange.
Among other things, in order to guarantee losses, Kirpichev recommended mechanically copying other people’s transactions and not following his own trading rules. He noted that you can lose your money if you have a complex strategy without the ability to comply with it, as well as trade inside the day without the ability to constantly monitor the market.
“Intraday trading cannot be treated as a hobby. This is a full-fledged job and even more. If you shirk it— you will definitely lose money,” the expert explained.
Among the risks of losing funds, he attributed the use of leverage without stop losses and averaging a losing position with borrowed funds. In this case, you can lose not only your money, but also the broker’s money. Kirpichev also advised to be self-confident, to work without regard to the risks in order to lose their funds.
“It is at this moment that you can make a mistake that will ruin your entire deposit. Remember – you can’t earn all the money, you can only lose all the money,” said Kirpichev.
To lose all funds, you can buy an asset at the highest point of value and sell at the bottom, added Dmitry Machikhin, CEO of the Pressman Capital investment fund. This behavior is often caused by emotional actions and the FOMO lost profit syndrome.
According to the expert, you can lose your money if you invest in financial pyramids or give cryptocurrency to private individuals for trust management. In addition, the specialist explained that for losses, you can invest your funds in one asset and not diversify your portfolio.