How many times have you suffered losses in the crypto world?
Last November, a friend of mine was trading contracts, starting with a principal of 500,000 and using 5x leverage. His account surged to a maximum of 4.3 million. After deducting fees, transaction costs, and the portion hedged with spot trading, the total profit calculated was a staggering 851%. What would you do in this situation? Most people would have taken their profits by now, but he didn’t. According to his wife, during a slight dip in the market, he didn’t stop loss, and later the market rebounded. At that time, his contract account was up over 900%, and he felt there were too many people going short, so he didn’t pay much attention. Later, when the price dipped again, he still didn’t choose to stop loss.
His wife mentioned that when the account reached 4.3 million, he called out to her with a trembling voice, informing her of the situation, but he wasn’t particularly excited; he just stared at the screen, slowly becoming unusually calm. Because he had previously earned nearly 3 million at his peak while trading contracts, and then lost it gradually, he had experienced the ups and downs and seemed very calm in this situation. He firmly believed that the market would rise to 5 million and wanted to wait until it surpassed that before cashing out. As a result, without hedging his contract positions, a sudden drop occurred, and his account was instantly reduced to just over 800,000. By then, it was too late to close the position.
The outcome is something everyone can imagine; after the liquidation, he sat with his head in his hands for two minutes. His wife vaguely sensed something was wrong and was about to ask him what happened when he suddenly rushed to the windowsill and jumped down. Fortunately, their home was on the third floor, so he survived, but his legs were permanently disabled.
This incident is truly lamentable. The risks of contract trading are too high; once leverage is used, both profits and losses are amplified. How many people have been driven by greed and luck in the market, only to end up falling hard? In investment, one must first learn to respect the market; preserving capital is more important than anything else. Otherwise, no matter how much money you make, one fluctuation could wipe it all out, and you might even pay a heavier price.
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