Reference “Just woke up and realised I got liquidated overnight. I was 3x long PEPE. I lost everything I had. I don’t even have $1000 in my bank account but had $1M in Binance. I have been in crypto since 2017. Today I lost everything,” he posted.
He has started crypto trading since 2017 doesn't mean he knows how to trade the futures market. He might only be one of the opportune people to invest in cryptocurrency easily but became greedy and wanted to make more since the crypto market is not performing as many expected in recent times. I can only term that "greed" if that is the case. We should know that the higher our risks, the higher could be the gain and the loss. I feel sorry for this guy!
This is one disadvantage of future trading. You can make a fortune over night trading on future, but you can also lose it all if you don't apply good risk management. It's obvious that this man did not set a stop-loss point; his greed overshadowed him with too much confidence that the bitcoin price can't dump since the halving is just around the corner.
That is the point, if anyone believes they can make a fortune overnight, they have a higher chance of losing everything instead. Trading has to be done carefully and systematically with the right psychology, trading system and management in play. The guy cannot carefully observe all of these and still lost woefully the way he did. If you do not know how to trade the futures/margin market, never trade it, and if you must trade, let the money and risk management be ringing in your head above all other things else.
It's hard to experience total liquidation like this on spot trading, but if I thought Binance by default doesn't allow 100% liquidation on future trading, at least it will automatically stop in the range of 85–90% of the trader's total assets they always tries to leave you with something.
Spot trading is almost the same thing as buying your asset in your wallet and keeping it. Why can't the guy opt for this option if not for greed? And the 100% liquidation in Binance is what we all sign for if we are trying to trade Binance futures trading, so Binance should not be blamed in this regard. No one should engage in what they do not know or understand and we should weigh our risks accordingly before taking it.
Are you telling me the guy did not know that the market could go either way, so why can't he plan the 85-90% you are pointing to by the use of a stop loss? All these tools and functions are there, so I see no reason why anyone should blame the exchange. I wonder about the huge risk the guy must have taken for a whole $1M to be liquidated. That must have been a daring attitude which is orchestrated by his greed.