I recently experienced a significant loss with my $NEAR token, where 70% was liquidated due to unpredictable market movements. Here's what you can learn, and some tips to help you avoid a similar situation from my experience:
1. Risk Management Is Key
Lesson: Before diving into trading, set clear risk limits. Determine the percentage of your portfolio you're willing to risk on a single trade.
2. Stay Informed About Market Conditions
Lesson: Regularly check market trends and news. Unforeseen market movements can impact your investments.
3. Avoid Overleveraging
Lesson: Trading with too much leverage can amplify losses. Use leverage wisely and be cautious about high-risk strategies.
4. Set Stop-Loss Orders
Lesson: Always set stop-loss orders to limit potential losses. It acts as a safety net, automatically selling assets if prices drop to a certain level.
5. Diversify Your Portfolio
Lesson: Don't put all your eggs in one basket. Diversifying your investments across different assets reduces overall risk.
6. Understand the Technology
Lesson: Before investing, understand the technology behind the cryptocurrency. In my case, a deeper understanding of current events of technology (BTCETF) could have helped anticipate market movements.
7. Start Small, Gain Experience
Lesson: Begin with a small investment and gradually increase as you gain experience. Learning from smaller losses can be valuable without risking significant funds.
8. Stay Emotionally Detached
Lesson: Emotional decisions can lead to impulsive actions. Stay calm and rational, sticking to your trading plan.
9. Continuous Learning
Lesson: The crypto market evolves. Stay updated, learn from experiences, and adapt your strategies accordingly.
10. Community Insights
Lesson: Engage with the crypto community. Discussions and insights can provide valuable perspectives and information.
11. Secure Your Investments
Lesson: Use secure wallets and exchanges. Implement two-factor authentication to protect your assets.
Remember, trading involves risks, but with careful planning and informed decisions, you can reduce the chances of liquidation and protect your investments.