I. Significant risks of cryptocurrency trading
Severe market volatility
Cryptocurrency prices are easily affected by policy changes, market manipulation, technical vulnerabilities, etc., often experiencing extreme market movements with daily drops over 50% (for example, LUNA coin nearly went to zero in a short time). Methods like 'technical analysis' pressure levels and support levels may be ineffective in a highly volatile market.Lack of effective regulatory protection
Cryptocurrency trading platforms are not regulated by Chinese law, and investors' rights concerning the safety of their funds and fairness of transactions cannot be guaranteed. If a platform runs away or experiences technical failures, investors may find it difficult to protect their rights through legal means.Leverage trading exacerbates risk exposure
Operations mentioned in the article, such as 'short positions' and 'entering positions in batches,' usually involve contract leverage trading. Leverage can amplify profits but also magnify losses, potentially leading to liquidation and total loss of investment.
II. Risk warnings for related trading strategies
The misconception of 'only trading mainstream coins'
Even so-called 'big coins' (like Bitcoin, Ethereum) may experience a price drop in a short period. In 2022, the price of Bitcoin fell from $69,000 to $15,000, causing significant losses for many investors.Limitations of technical analysis
Technical analysis is based on historical data, but the cryptocurrency market is greatly influenced by human manipulation; abnormal price movements such as 'spikes' and 'whipsaws' are common, which may lead to ineffective stop-loss and take-profit strategies, and even be exploited in reverse.Potential risks in capital management
The article mentions 'a single day stop-loss drawdown of 15%-20% of the principal,' which, if the principal is large, could result in daily losses of tens of thousands or more, severely affecting personal and family financial security.
Rules like 'no overnight positions' and 'no trading on weekends' cannot completely avoid risks; the market trades 24 hours, and sudden news can trigger severe price fluctuations at any time.
III. Important reminders
Chinese law clearly states that any form of cryptocurrency trading speculation is prohibited. Participating in such activities may not only lead to asset loss but also legal liability for suspected illegal foreign exchange trading, money laundering, and other criminal activities. Please stay away from cryptocurrency trading and invest through legal and compliant channels to protect your property and legal rights.
A reminder: Any cryptocurrency trading claiming 'low risk, high return' is a trap. Staying vigilant and avoiding illegal financial activities is the correct choice for self and family responsibility.
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