Topic: Different level of risk in crypto currency trading - page 4. (Read 770 times)
Every cryptos other than stable coins having volatility and it ranges depends on the coin's price, market cap value, existence and potential.There is no way to identify or reduce the price volatility that is why some exchange have that warning.But this is not really a warning,its just an advertisement for their platform.
As far as I know, the cryptocurrency risk will be different between one coin to other coins because the price is different too. Even if you invest in bitcoin, you will have a risk of losing your money value.
Every investment will have risk, but we can minimize the risk by learning how to prevent it. The higher the product/coin volatility, the risk will be bigger, so you need to know how to reduce it.
Perhaps, when you buy bitcoin or other coins at a price now, the price can up and down anytime. If the price is down, you lose your money value because it is down from your buy price. But you have a chance to see the price will bounce again to the high price in the next hours or days. If the price still down, even it is down deeper, you can cut loss at a price now, so you can buy back the coin and hold it for a while.
If the price can increase back, you can sell it, and you will make a profit.
Every investment will have risk, but we can minimize the risk by learning how to prevent it. The higher the product/coin volatility, the risk will be bigger, so you need to know how to reduce it.
Perhaps, when you buy bitcoin or other coins at a price now, the price can up and down anytime. If the price is down, you lose your money value because it is down from your buy price. But you have a chance to see the price will bounce again to the high price in the next hours or days. If the price still down, even it is down deeper, you can cut loss at a price now, so you can buy back the coin and hold it for a while.
If the price can increase back, you can sell it, and you will make a profit.
I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.
Crypto is not a financial product. It is the currency. The product would be the derivative like options or futures here.One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.
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The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)
That statement is applicable to any type of investment. Nobody will tell you this in every place. You have to assume it.Quote
I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out?
In spot trading you may buy some shitcoin and get stuck not being able to sell back. In futures and perpetual swaps you will be gambling on your money essentially and risk losing it all. Hence Spot is somewhat less risky provided you know what you are buying and selling.There is no variation of risk with amount here. Markets can go down any moment and you will be stuck in the worst case scenario, but practically buying bitcoin and holding for long to sell is profitable as per the last 10years records.
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When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...
Cant say unless you show the image here.
The majority of the cryptocurrencies bear the same risk except for the stable coins. From the root word, they are stable and serves as the fiat in the crypto market.
Bitcoin is risky and altcoins too.
Defining them by level, they are the same in levels. A good basis is to look at the liquidity or volume of a coin. It will give you an idea if it's going to fluctuate that much by looking at the high daily volume. But if that coin doesn't have that much, just leave it and don't buy it.
Bitcoin is risky and altcoins too.
Defining them by level, they are the same in levels. A good basis is to look at the liquidity or volume of a coin. It will give you an idea if it's going to fluctuate that much by looking at the high daily volume. But if that coin doesn't have that much, just leave it and don't buy it.
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But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)
I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...
[..]
But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)
I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...
[..]
They have stated the reason by themselves and thats High Volatility of the coin.
So if I have to explain this in short words then I would compare BTC with any other altcoin. Here, you know very well BTC is invested heavily all the time, it's total 24 hrs market cap is always higher but it doesn't move the prices by crazy thousand dollars each time. However, an altcoin is easy to move with smaller investment and this is known by many traders. So they altogether invest a lot, pump and dump these coins and thus it could cause lot of movement (volatility) in them.
So you will never know at what point are you and whether is it right one to invest into or not. It could happen you may invest at X price which already hyped one and in the second movement it could go down with large difference causing extensive loss to your investment.
These are kind of logics behind this. If someone is having another one then I would love to read that one as well. But this is what volatility risk is.
There is no place legally able to ask for more from you, in places like robinhood which deals with real stocks and margin trading and leverages, they do ask more from you, you could spend more than you invested in robin hood and in other stock market places, you basically take out a debt for investment and not really to yourself so that makes things easier, in the end company only buys stocks and they ask the difference from you instead, and not really put money into your bank account.
So, stock market has what you are afraid of. However in crypto world people do not give their details everywhere, some places ask for your KYC but as long as you do not share your KYC they can't know who you are and that is why they can't charge you anything more than what you put in there.
So, stock market has what you are afraid of. However in crypto world people do not give their details everywhere, some places ask for your KYC but as long as you do not share your KYC they can't know who you are and that is why they can't charge you anything more than what you put in there.
spot/future /leverage /scams /news based manipulation /whale manipulation /exchange gone ,and many more
If you simply buy or sell in the spot trading only what you invest is at risk. You probably get the risk alert when you move on margin trading or others working with leverage, as it happens to me on Binance. But as far as I know you can lose what you invest, due to the high volatility and the leverage. For further info I suggest you to read some tutorials on your exchange, otherwise stick with the spot trading.
Hi,
I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.
But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)
I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...
If anyone could shed some light on this that would be appreciated.
I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.
But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)
I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...
If anyone could shed some light on this that would be appreciated.
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