One of my friends is currently stuck in one of the worst trades I've seen — over $700 in losses.
His trading mistakes were so fundamental that no professional trader would ever open a position like this.
Where did he go wrong?
Misread the market: He went short when the market clearly favored going long.
Excessive leverage: He used high leverage without a solid risk management plan. Pro traders only use high leverage when they are extremely confident about the trade.
Poor liquidation setup: His liquidation price is set too close at $98,700. While not entirely unreasonable, smarter margin management — like using cross margin instead of isolated — could have reduced his risk significantly.
In my opinion, given the current market conditions, this trade is practically a liquidation in waiting.
Still, I genuinely hope he finds a way to recover.
