An important post about a lost trade - and the experience taught me a lot
Today, I want to share with you a failed trade even though I always try to share successes, but loss is part of the journey, and we need to talk about it frankly so we can all learn 💡
I entered a sell trade for currency $BNB and my capital was fully covered, yet I had to close it with a loss!
And the reason?
The trade was on the isolated trading system (Isolated) not the cross (Cross), and that's a very big difference!
I usually never close a trade at a loss, I like to wait and give it a chance, but in this case, if I had waited longer, I would have lost the entire entry price of the trade, and that made me decide to lose a little instead of losing everything.
🧐 So what's the difference between isolated and cross trading?
Isolated: The capital for each trade is separate, which means if the trade loses, you only lose the money in it.
Cross: All account capital supports open trades, preventing liquidation easily.
💥 So what does liquidation price mean and how dangerous is it?
The liquidation price is the price that, if the market reaches it, your trade will automatically close because the capital is not enough to cover the loss.
⚠️ The danger?
In isolated trading, the liquidation price is very close to the fair price if the margin is low, which makes you more exposed to risk.
📌 Follow me to benefit from every trade, because this is a journey full of lessons!
