Topic: Be careful with margin trading. (story) (Read 634 times)

Agree with you that's why I will never use  bots and will never paid for signals, there's a lot of experts our there not giving signals but they are analyzing the market and it will be up to you what will be on your decision since they are only suggesting and how they come up with it. For those who are paying for signals, make sure that you don't give your all in as there in guarantee with it.

This is only common sense but somehow people do not even think about it, a trader that is successful and that is earning money in the markets does not have any incentive to tell you why he's selecting to invest his money in a particular coin at that moment in time, because if he does this enough times you can reverse engineer whatever method he is using to determine what actions he should take and then you could use it to generate your own signals that you can trade.

100% right about 'signals'
Really successful traders got no time to share 'signals'. Whoever is doing that either want to take advantage aka counter trade whoever does that, or just cannot make better money in trading at all.

You already learn something that we are the player, take control all activity depend ourselves not others. Never use bots or believe signal ( free/ premium ) but trust your strategy. Margin is to double your profit/ lost so be careful to set it, always use fix range. Know our field is good but understand our strategy is better.

Yeah right, there's no such things inside trading industry, even those so called experts is not exempt with losing position. The volatility of the market
is tough to predict but if you are willing and ready to handle the risk then proceeding is also an option. It's best to not to rely to anybody but your own analysis, the market is wild and everything is speculative, margin trading can easily sucked your money needs to have a clear and full understanding.

The most conspicuous benefit of margin trading is that it can bring about greater profits because of the greater relative value of trading positions. Apart from this, margin trading can be practical for diversification, as traders can open multiple positions with relatively low amounts of investment capital. Finally, a margin account can help traders quickly open positions without having to transfer large amounts of money to their account.

Despite all its advantages, margin trading has the disadvantage of increasing losses in the same way that it can increase earnings. Unlike ordinary cash transactions, margin trading introduces the possibility of losses greater than the trader's original investment and is therefore considered a high-risk trading method. Depending on the amount of leverage involved in a transaction, even a meager decrease in the market price can lead to significant losses for traders. For this reason, it is imperative that investors who decide to use margin trading use risk management strategies.

Trading margins in the cryptocurrency markets Margin trading is intrinsically riskier than normal trading, but for cryptocurrencies the risks are even higher. Due to the high levels of volatility typical of these markets, cryptocurrency margin traders should pay particular attention. Although hedging and risk management strategies may prove useful, margin trading is certainly not suitable for beginners.

Being able to analyze charts, identify trends and determine entry and exit points will not eliminate margin trading risks, but it can help better anticipate risks and negotiate more effectively. Therefore, before taking advantage of their cryptocurrency transactions, it is recommended that users develop a thorough understanding of technical analysis and gain extensive experience with spot trading.

Overall, margin trading is a handy mechanism for those looking to bolster the profits of their successful transactions. If used correctly, leverage transactions provided by margin accounts can result in both profitability and portfolio diversification.However margin trading method also exacerbate losses and bring about much higher risks. Therefore, it should only be used by highly seasoned traders. As far as cryptocurrency is concerned, margin trading should be approached with even greater care due to the high volatility of the market.

If possible, you just avoid margin trading altogether. Just stick to the ordinary spot trading, the normal one which the majority are using. Leave margin trading to the experts and rich traders. Margin trading is also not for newbies. Newbies tend to trust easily the signals coming from people who are not even personally known to be an accurate analysts. Especially if these signals are kept to exclusive ones who can pay for it, newbies will think of them as 100% reliable. They are wrong of course.

This is the right approach, many people always talk about how important it is to control your emotions but they never describe how to do that? And the only way in which we can do that is to have a very defined plan about what we're going to do in every single scenario that presents itself when we trade, if you have a very clear idea about what you're going to do in the case something goes wrong then instead of thinking about what you should do in those circumstances you will only act according to your plans and no emotions will be involved in the process.

All right. To make this easier, it’s not enough just to try to control your emotions, you need to build a certain plan, according to which you will follow. Thanks to this plan, it will be much easier for you to put up with losses and failures, because your goal will be much higher than the level at which you are now. This will be some beacon to the fact that you are moving in the right direction.
This is difficult and requires constant control over your discipline, but only in this way will you become a very good trader the fastest.

At least you learned your lesson, there are many traders that after suffering a loss when they were margin trading they decide to take an even greater risk so they can recover their money immediately and as you may guess instead of getting their money back what they get is even more frustration and more losses, I can understand why many traders use margin trading in the Forex market because it is not as volatile, but using margin trading in this market is a terrible idea unless you know very well how to manage your risk.

Learning to control of your emotion should be the one we should overcome too before we give all in in cryptocurrency, as we are practicing trading, we should also practice how we are going to control our emotion in every scenario. Losing is part of the game, not everyone is winning everyday, but it's up to us how we can  trade responsibly, and how we can learn everyday, everything is in our hands.

The Invictus Margin Lending Fund is now offering investors the ability to take advantage of the volatile nature of the cryptocurrency market without risking direct exposure.

On the second line of your post where it says “signal”, thats the part where your friend committed a mistake. Signals even when you say thats its premium and you pay for it, its still not reliable. Maybe I will use it as a guide, but to make me decide using it 100%, its a NO. Trading itself is very risky, margin trading multiplies the risk even more.

The fact of the matter is that people learn mainly from their mistakes.
It’s hard to learn from someone else’s experience, it’s much easier to try it yourself. After all, until you get burned, you won’t know what is really hot, no matter what you are told.
Therefore, the simplest and relatively safe method is to test margin trading with a very small amount, or you can use a demo account (for example, on paper).
Just to understand how difficult and risky the game is. It is better to take some money that you are ready to lose, and experiment with margin trading.
Thus, you will control the process, and not the process will control you.

Have same experience yet ive been trading with ForEx for 2-3 years and im really aware of that margin trading.The thing here is that forex
doesnt have that much volatility compared to crypto.When we do talk about the level or risk then margin trading on this place is more risky
because of too much movement.We know on how volatile crypto is.It isnt bad to try though but always proceed with your own risk.

It is not even about being a professional trader, margin trade is generally a risky trade and I would not advise someone to go for it, although we have so many people that are in experience about this, so they will not understand this until they try it themselves and then fail, maybe then, they will learn from their mistake.

I remember that I never listened to people’s advice about going for margin trade and the worst thing about mine is that I was even greedy about my own leverage which I really leveraged high till I lost thousands of money to Forex trading and when I heard that they introduced margin trade to cryptocurrency also, I ran away from it like my dear life was at stake because I knew the experience I had passed through in Forex.

Neironix is a common analytics provided by many other experts, it gives almost nothing if you yourself do not know how to read charts.

Margin trading can be used by any trader who understands how to do this, and acting according to his trading strategy.
An exposing stop-loss, not rushing to extremes, a trader approaching trading with a cold head, will be able to fully cope if he does not make the entire deposit, but only part of it.

I wonder if those traders ever read a book about trading that was honest about the huge risks of using leverage trading, because when I take the time to look around the Internet about it some articles talk about the risks but only superficially, leverage trading is solely for traders that have a lot of experience and have a very precise idea what to do to earn profits in the markets, and I'm sure that the majority of those that are getting their positions liquidated do not fulfil those requisites.

That would be the best, but if people were to be totally honest and rational, they wouldn't start trading to begin with. The problem people face is that they think that the next time will be different while that's not the case at all.

If the next time is different and they make a profit, that's purely because they were in luck, nothing else. That confidence boost makes them then take higher risk resulting in losses once again.

I feel kinda sorry for people going through this, but we are all responsible for our own actions, which means that stupidity has to cost people money otherwise they don't know that what they are doing is very stupid.

I also do not advise anyone to use margin trading. This can only be done by real professionals who have worked more than 10 years in the market. Because margin trading for newcomers is a common lottery in which new traders always lose.
If you yourself do not know how to trade, then read more articles. For example, I use the Neironix because there every day there is a quality technical analysis and market review. Yes, and on the news there you can trade

Totally agree, market stop is a great tool. You have to be careful if you're placing a big order though as you can chew through a lot of the order book and end up getting a worse average rate than expected.

It's especially important that you set market stops especially if you're trading using leverage or margin as well. I've had many instances on sites like Bitmex and elsewhere when prices were moving strongly in one direction and blew past my limit stops, and even though there's potential slippage when you're using market stops and you're also paying more than with a limit stop, it's still worth it IMO.

It's also generally not a good idea to follow signals word-for-word 100% of the time (because everyone's wrong occasionally), and you should always be considering the risk to reward of whatever signals or trades you're taking. Many people typically risk 3% of their total trading balance per trade, and depending on your stops you can adjust your positions using leverage optimally. If your stop is close to your entry, you're able to use a larger position while risking the same amount of money as a smaller position that's got a stop farther away.

Your friend needs strong support from someone else and knows his position. He can be always in panicking if nobody could accompany him regularly cause I believe that he still learning and not fully understand what he has done right now.


They are deeply frustrated if they act like that and they are putting themselves to an end faster. If we experience continuous losses it sounds like our strategy never works well or the way we manage ourselves. Putting to an end of our trading career is a perfect solution rather than to continue doing but still ended up for nothing.

That highly depends on the situation. In some cases people start with small amounts and book some decent profits, then think they can do the same but with larger amounts because they get greedy.

Another thing is that when people lose on a few trades, they go big after that in an attempt to gain back what they lost at once, which usually means that they lose every single penny that they had before they started losing.

The same happens with people who gamble.... the biggest losses are suffered by trying to gain back what people lost.

You should be the one to take control of your trading funds. That's the reason why we have to learn trading ourselves to get rid of uncertain losses. We shouldn't rely on trading signals or margin trading but we have to observe and go with the market flow. If we'll know how to deal with every market situation, we will not be needing trading signals anymore. It could only confuse and deceive us.

These are pretty obvious things that have been repeatedly expressed in this topic. Yes, margin trading is a risky business, but the crypto market itself is not the safest place. Risks are everywhere, they are adjacent to the opportunities that the market provides. You choose to use the opportunity and take the risk, or stay in the "safe zone". Therefore, it is not necessary to say that margin trading is evil, it is the same risk as trading, as well as investment in crypto, like everything else.

Margin trading is like gambling when you don't know what you are doing, Just make a trade when you are sure about something, or you read the news that will really affect the price of the coin that you are going to trade. Regarding the emotion, you need to know when to stop and when to just go with your profit, because just one big dump will liquidate your funds. And the most important part is don't go all in, in margin trading.

I absolutely agree with you. This story taught my friend a lot, haha. Now he has an open short position with x5 leverage, by the way, mee too.
The order was opened at the level of 9200. What will come of it I will write in the near future.
Of course, I accept the risks associated with this deal.

Emotional patterns emerged yesterday when the price of BTC in binance went wild at $ 8888- $ 8657, this liquidated many users with large leverage in just one hour. this teaches the importance of stop limits and the need to increase capital to increase liquidation distance.
only a small sample because the BTC movement is still in the support phase, margins do have a high risk.

I realize margin trading is very high risk, only traders who can't be separated from their computers can do it. because in my opinion opening a margin trading should not be left alone let alone careless it will be worse. only do margin trading if the mind is calm and not in high emotion, so trading will be better. even if one predicts it will determine the stop loss faster.

I think those are looking for margin trading, they already analyse everything so more risky compare to other trading. But we choose right project and right escrow of the crypto they will guide the complete process and risk factor. Nowadays stock market investors only participate the margin trading and they have good knowledge, But personally I am recommend for small scale investors.

This happens because traders do not really understand the risks they are taking, the best books I have read about trading have this in common, they try to do the best job they can to explain why trading is difficult and in some cases a dangerous activity and they teach how to take low risk trades, but even if a new trader was lucky enough to select the right books from which he could learn those concepts it could still be for nothing as it has been reported many times that new traders just skip those chapters and never read them.

it can only take all the money of reckless traders or see margin trading as a gambling game.
I see a lot of people hitting a lot of orders in a day, they have an unstable mentality and surely their orders will be lack of insight.
That's why many people lose on margin trading. We should really have the most comfortable mind before trading.

Yeah, been in this kind of situation way back when I was a crypto trader newbie. But I will tell you that it's a lessons well taken by me. But the thing is that it looks like your friend is a total newbie, correct? So I don't know how he ended up trading and listening to those trading signals. But as I have said, in the beginner you will surely make a lot of mistakes, its not bad though and if you think you loss big money here, then think again. Sooner or later your friend are going to recover it because they've learn so much and I'm sure he will be more careful and diligent, as others have said, let this be a lessons learnt.

1. Yes, I'm sorry but we have been educating people around here and telling them many times not to go or joined any paid or free signals.
2. Same thing, stop/loss, entry/exit plan should be in place as well.
3. Exactly, if you don't know how to handle the risk then it's not for you.
4. Of course, the thing is that your friend involve himself with huge amount of funds in the get go. And I'm not sure if he can afford to lose it, just like that.

I'm sorry for your friends lost, but this is another story of expensive lessons to learn in crypto sphere.

Definitely right, we have to play safe and just trade the money you can afford to lose. There are so many failed stories of traders who are doing a margin trading, i didn’t try this one because I’m not confident that I can earn money thru this one. If you really want to earn big, then you can try this one but of course you must be responsible on your losses.

learning from the case of deribit in the past few days, makes us have to be sure with the stop-limit or take-profit-limit options, we can follow the signals but also spontaneously with the development of existing trends, this applies equally to other markets. today many are liquidated simply because they maintain long positions at $9300 without using stop loss. We must monitor well when involved with margin trading.

This.

By the time they broadcast their signals they already have their positions in place, and their strategy is to sell to an idiot (the person blindly obeying the signals).

Please, don't you ever trust any trading signals by others.
Margin trading is no joke, it's risky as hell. You could lose all of your money just like that. And what, using signals as a sign to do some margin trading?
Not even experienced traders can survive in margin trading if they let their guard down even for a moment.
If you don't have enough knowledge about something, let alone trusting your money on other's signal, just don't do it in the first place.

1. I really don't like the signaling community. because in my mind, the owner of the signal uses its members to make personal profit. because he ordered the member to buy a coin after he bought it and the member made a pump, and the admin sold it.
2. I don't like margins. in my opinion it's like gambling. You put a deposit, and get 2x the capital, but when the wrong position. everything's gone.
3. trade according to personal knowledge. if you don't have enough experience, learn first.

note: there is no good signal community, 80% are pumps and dumps.

We'll just follow some certain rules and guidelines in trading. Margin trading is somehow too risky and can make you a bigger chances of losses.  Relying to something uncertain is too risky and prone to losses. Its better to have a little than  risking too much to gain big.

That should how people think off where its better to trade and learn on your own rather than fully relying on paid or follow up signals from other traders.

You said that you follow signals because you don't have much money? No, its total nonsense if you do had this kind of reasoning.Our success doesn't vary
if we do have a lot of funds or not.

while its hard many people still trade bitmex perpetual with margin
https://www.coingecko.com/en/derivatives
$11B volume traded

Couldn't agree more. Trading simpler is much easier at first than margin trading.

We are the one responsible with our money, fund or our investment, there's no one to be blame if we follow the signals of some traders, we followed because we don't have much money. So, once you lost from trading, it is your pure responsibility and accountability.

Anyway, as per me, I don't rely on paid signals or even from a friend signal, yes, I do love to do trading, but I am learning it on my own, or from some people but I don't rely on their signals, just analyzing their strategy.

Agree with you sir, margin trading has to be handled very carefully. Can you provide us with some actions that can be taken to minimize those risks involved?

I think that margin trading is more suitable for experienced traders, but not for those who make trading decisions on signals. If you have already decided to engage in margin trading, then strictly limit your losses by setting spot-loss.

That's what happens when inexperienced traders try to play with advanced trading platforms—they get ruined.

If you don't have SERIOUS knowledge about trading and are able to generate a consistent profit without leverage, then you have no business trading at margin trading platforms.

Now your friend has learned an expensive lesson, he is lucky it wasn't his life savings.

I think the most basic lesson this post gives you is that always keep a mechanical stop loss fed into your system and your stop loss should be at market which means sell at whatever price possible because in high volatile markets like Crypto price generally jumps suddenly over a point and chances are that your limit price never actually came after the trigger was made. Moreover stop loss should be so calculated that your risk per trade doesn't even increase more than 5% of your capital. I generally say 2% but people here have less capital so 5% would be a fair deal. But this should be the maximum cap and you shouldn't ever risk more than 5% of capital per trade.

There are tons of people who have lost money on signal groups back in 2018. It was the time when bitcoin started to go down and altcoins looked like they were going down a bit as well but some ICO's or some tiny market cap coins looked like they were hanging in there.

People were moving their money from bitcoin to other smaller stuff so they could recoup the bitcoin loss plus make some money and back in those days there was a lot of people who have lost money to signal groups. Telegram had millions of them, some idiot just wrote a bot that notified people when Bollinger band dropped under 20 and they charged people for this, it was the most stupid thing I have ever seen and yet the people who ran those signal groups made more money than all traders. That is why people always say "in a gold rush, only the shovel sellers make money".

whne u margin trade u r trading against bots and algos so they r ruining the short term setups so zzom out and aim for swings not scalps, when u spend ur hard earned money on someone else analysis u don't know his time horizen neither how much to risk and where to put ur stop and when to take profit, most paid group leaders had no idea what they r doing however there are some paid groups that teach u how to catch a fish

I like signals because it makes us money that's true but if we know what we are going to do when to enter and when to sell. I've been there in the past following signals etc but really not knowing how to deal on it. No matter how much money you have if you only follow signals then maybe someday you will be caught and didn't know how to trade or what to do when your money is at losing state.
Signal are high chances but you have to act fast think fast and take profits. Signals is for greedy people, why? Because they want to follow others to earn but not knowing its real process.

The potential gains are too shiny to resist to a lot of people. Margin trading is dangling in front of you a big prize and a way to do it. But what is also waiting along with it is the high possibility of your wallet eaten up whole.

This is a sorry tale. Lessons should be learned because of this. If one is not sure about his calls, don't do it on margin trading. If his TA source is pure random, avoid margin trading. Cut loss may not be enough. If you are not even a good trader yet, better avoid margin trading at all. Why don't we just spot trade instead?

+1

trading itself is a high risk business especially for those who have no clue but staright to trade with zero knowledge.

common mistake that we have seen frequently, even more so the margin trading it is deadly , any pro trader/mentor will encourage to avoid the margin trading , i just can not understand the way his mentor teach them to trade.
margin trading is totally a bad idea no matter for those who have a big bankroll or those who have limited bankroll.

have a debt is something you should avoid all the time to achieve the real financial freedom, is it your goal? oh and margin trading is definitely a bd debt.

Another story of a person using margin trading and suffering the consequences, even famous traders have lost everything when they were margin trading and they probably knew more about the markets than what we are going to know about the subject during our lives, with the volatility of this market using margin trading is asking for trouble, and your friend was using a manageable level of leverage I have seen traders claiming they use a lot more leverage than that.

I don’t recommend any margin trading that involves borrowing money you can’t afford to lose or repay, i think crypto margin is pretty gamble. trading on margin is a very easy way to lose a lot of money really quickly. in some cases margin isn't that high, but it can still wreck you very easily because of the bigger swings bitcoin can make, like the $1000 drop 2 weeks ago would mean your money is gone. However you can try it for yourself with a small amount. Nothing will teach you as good as your own rekt, and don't forget that never trade on group signals.

Agree. However, its not enough to have a strategy. You need to stick with it and develop it, and when it's not profitable you should switch your strategy up based on trial and error, and you should work with your strategy under discipline.

I think margin trading needs to be good at market analysis because not everyone can make good profits from margin. In fact, many people have lost all their assets by this method,so if you are an investor with a bad mentality, it is best not to participate because the risk from margin trading is very high and will easily make you you depressed. In my opinion, we should trade normally and choose good investments to hold in the long term because that is the easiest way to make a profit.

There are currently over 1,000 telegram channels involved in margin trading and will usually charge members for VIP groups so you should think carefully and don't trust them.

sorry for your friend loss
But it’s risky to follow signals from group. Even when i was new in trade I also trust on signal.Few days later I saw many scams Report. If you Follow there signal they will make profit from you.they try to Trade with shitcoins.they will buy coin first then they will give you a signal to buy and hold. That time price will be rise and signal provider will sell his coin.and finally you will loss your money. So,stay away from this kind of shit group         

I don't understand what's so hard about "buying and holding". Margin trading is a huge gamble. It always was and now you are doing it on a unregulated, volatile asset like bitcoin. I am sorry but whoever playing with this crap deserves to lose money. You knew the risks before getting into this.

There are people who are good at it. I'm not sure how they do it but margin trading is best in FOREX market.
I really believe margin trading isn't suitable for BTC because of its volatility. In trading you just have to buy, wait and sell. No take profit or stoploss, you just decide when to sell or buy as long as you are in the platform where there is a huge volume. There ain't no signal group needed for that.

Yeah, your friend made some major mistakes, but they are hard learned lessons that are much better learnt on your skin then from someone else's experience. A few thousands dollars is not a fortune, but it is a decent amount but he must understand that being upset for his losses won't make the situation better, but much worse. So tell him to write the mistakes down and what I suggest in the future is for him to use cross leverage and a fixed stop loss in case anything bad happens.

Do not trade on signals is the most important part of this yet also not important at all as well at the same time. Now, you may say how is it that its the most important part but also not important at all, well simply if you trade on signals you are shifting the blame to someone else, you will certainly long or short your position yourself even if you do not use signal and you can definitely be wrong as well, so what if your friend didn't had any signals but decided to short himself without help from anyone else? What would happen?

Well, same would happen because bitcoin went up, so now we have a trader who gave a wrong signal that made your friend lost money a ton but at the same time your friend could have lost it all by himself without anyone's advice as well, which means bad signals are horrible but doesn't mean it is all their fault, your friend could have done the same.

That is the ultimate nature of margin trading. They are high on risk.
Never, I repeat never do margin trading on someone else's signals. They involve high risk and people often in blind trust of so called "trading gurus" ignore stop losses. Market is so volatile that putting tight stop loss becomes important and when it comes to margin trading, it becomes critical. I have seen many people being wiped by one sudden move in margin trading. People get greedy and ignore the basics of risk management.

Well, there is no accurate result if you are relying upon your teacher that giving a signal. Do you think if they had a good result in trading they are wasting their time teaching others? Instead, they will do for their own good just to have a better profit than teaching others. As a trader, it is not an easy job for us because it needs to dig a study and possible have more research to have an accurate result but trading is not all based on skill, fundamental or what so ever, 40% probably base on luck when you can guess the fluctuation where is the buying and selling point.

We must aware of the risk. Stock trading is risky and crypto trading has higher risk becuse of the volatility. People make mistake everyday and that's why signals are not things to have 100% of our trust. I do believe margin trading is more complicated and has higher risk than spot trading, but it's always possible for us to learn and earn much profit one day.

Where can I see the statistic?

Also, holding always has different perspectives, like the holding result you mentioned will be different with those who bought at early 2018. It's a subjective thing.

First of all, if he's paying money to this guy to "teach" him and give him signals, he needs to try to get his money back. Don't believe anyone that tells you they have a signal that you should get in on unless their name is Warren Buffett. Even then, ask for government issued ID beforehand. If your friend had taken even 10 minutes to learn anything about reading market history and technical analysis on his own before he started paying this guy, he would have known that we were pretty close to the bottom for a little while.

He just basically wasting up some fees for that teacher to teach him up.If that teacher is already profitable in trades then he wont tend to find some student to teach on
but rather would trade on his own without any distractions on any other matter plus he lost up money because he trust up too much on whats being told.
Its been said for how many times that never ever trust a signal from anyone.You can eventually look on it but dont fully rely, always rely with your own analysis.
Set always some SL yet margin trading is way more riskier.

In addition, besides having to pay attention to a few points above, the most important thing is "don't be greedy in taking profits". My story: the first time i used margin trading at Poloniex with an initial capital of 0.01 BTC, at that time it was get profit already around 0.003 BTC, but because didn't close it finally i got Margin Call (MC) 

Do not trade. That is the lesson!

Not just on margin, but on trading. The statistics show a huge majority of traders make losses. You only give money to the exchange.

Get a real job, maybe invest in diverse portfolio and keep holding BTC. BTC if you bought in March is now up 200%. Who can make that money trading consistently?

Be smart and do a real job that gives you value.

Margin trading is just a gamble our luck if we don't know anything about technical analysis.
The reward is high when we win, but we can almost lost all of our assets if we lost, so for anyone who will start doing margin trade, i suggest is just use your free money, money that you can afford to lose and money that you won't need in near future

From the OP story and also some replies in this thread, teach many things:
1. Don't fully believe with other people's analysis even they are an expert.
2. Always calculate amount we can afford to lose.
3. Maximize all the features on the exchange to minimize the bad possibilities that occur when trading.
4. Don't spend more money just for a signal, better to spend money for course to learn about TA and anything else about trading, than pay for a signal's analysis.
5. Don't do something that don't know how exactly it work, like margin trading is.

Here's what I mostly noticed in margin trading.

• Never trust paid signals, it doesn't guarantuee that it may really happen.
• Rely to your own TA (Technical analysis), since your friend has a knowledge reading indicators, chart, volumes (well, I guess so) then he/she knows the right time to enter and exit the trades.
• There are unexpected sideways.
• Liquidity is easily achieved when sudden huge pump/dump happens and that is why setting stop loss is very important in margin trading. Does his mentor not mention or teach about it?

Hope, this serves as a lesson to your friend. That's how margin trading goes. We can lesser our huge loss by setting up lower leverage and stop loss.

So sorry to hear about your friend. I hope he/she was not actually you. It's common to hear horror stories like this with margin trading so it's crucially important that one makes sure he knows what he is getting into and knows when, if not at least HOW, to get out.

Also, signal trades are complete witchcraft. Unless someone provides solid technical analysis you shouldn't really listen to a signal trade just because the person who said it is "famous."

Margin trading is really hard, even for expert usually they are on wrong step and then lose too much in margin trading. Maybe your friend need to take a rest first, trading in margin is have bigger risk because it is not like trading as usual when we can hold as long as we want.

Isn't a teacher supposed to let his student go and do what he decides upon after teaching him everything? Well, thats what I would do anyway. A real pity though. The rise was too fast last time so I don't blame him for not being able to make it. Although i do blame him for trusting signals not made by him.
Plus, the fact that he actually made a debt is kinda weird? I'd advise to my students (if i ever had one) that only trade what you can afford to lose. It's kinda defeats the purpose if you go all in and lose everything because of that.
Well, only thing you can say to your friend at this point is, pretty much just try again next time.

Tough break. I made some mistakes like this in my younger days. This is why you always need an active stop loss order. No "mental stop losses" or any such nonsense like that. If it's not on the order book, it's not a stop loss.

It sounds like your friend didn't enter the trade with a plan. This is the biggest danger of following other peoples' trades. Before entering a trade, you should always have three things set in stone: entry, target, stop loss.

$8K was quite early to enter a short but I understand the idea: short the bounce in a downtrend. That's reasonable enough. The key is to take small losses on failed shorts like this, not risk your whole account.

I did not say that it was a signal from a group specializing in signals. It was a signal from his teacher who is a serious trader.

That's good advice, because the more traders trading on any given 'signal' the less effective the strategy is going to be, not that I think any of those things work in the first place.

Op, a short position combined with leverage is like quadruple the risk, a huge loss just waiting to happen as your friend found out.  Short selling is nerve wracking enough on its own, as the potential losses can be unlimited.  I cannot imagine borrowing money to finance that kind of trade.  I know its done in the stock market all the time, but in crypto?  That's insane.

That's an interesting way of putting it.  Short selling is even worse.  Margin trading in general is *relatively* safer, though still extremely risky.  Hopefully your friend learned a lesson from this disaster.

Dont trust any signal group its better to built your own strategy on trading in that case you will not blame people if you lose on your trade, sorry to hear that your friend lose a lot of money atleast your friend learn from mistake now if their comeback on trading its better to plan there trade.

I guess I’ll say a few commonplace things, but I can’t be silent.

My friend lost a lot of money in the last bitcoin move. The story is that he traded on signals.
Having a deposit of several thousand dollars, he received a signal (these were signal from one very famous trader, he trains him) to open a short position with a leverage of 2.5x at the level of approximately $ 8000 (I may be slightly mistaken).
As you know everyone was waiting for the fall of Bitcoin. My friend shared information with me, but I decided that I would spend this weekend without trading.

In general, before going to bed, my friend decided to check the market, and was delayed for 5 minutes. These 5 minutes decided everything.
He saw how the price of bitcoin began to grow at a frantic pace. He was shocked. At first he wanted to give the debt back to the exchange,
but it didn’t work out because he was sitting on the phone, and in the application from the Huobi exchange there was simply a disgusting procedure for returning the debt, absolutely not intuitive.

In general, when the price reached $ 10,000, he was already in a panic, did not know what to do, because the liquidation price was displayed as $ 10,200.
He frantically begins to buy Bitcoin for the remaining USDT, thereby increasing the liquidation limit, but he did not have time, and his position was liquidated.
He lost a significant amount, and fell into a rather severe upset.

Personally, I believe that all this could be avoided if:
1. Do not trade on signals
2. It doesn’t matter if you trade in signals or always set your own stop loss, even in the most obvious situations when it seems that there can be no other way.
3. Remember that margin trading can deprive you of your pants at any time. These are extremely high risks.
4. Be prepared for losses. If you take a risk, then accept responsibility for this risk at the time of opening a position, and not after its closure.


Be smart and take care of yourself guys.