Margin trading victims and how to avoid losses - page 2.

South Park

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Quote from: leowonderful on June 14, 2019, 10:37:34 AM

I see victims of margin trading all the time; this particular Reddit thread is a bit old but details a guy who kept shorting Dash until he got margin called for something like 150BTC when the price of the coin just kept going up. Thread is here (click for link). Pretty good takeaway from that thread is a market can remain irrational longer than you are solvent, especially in cryptocurrency, and you should never get married to a position.

A lot of people are also essentially gambling without a trading plan or a risk management strategy. If you have a good risk management strategy you can actually afford to be wrong quite a lot and still be successful.

Risk management is without a doubt the most important aspect of trading, many think of entry and exit points as the most important but even with a winning strategy if your money management is nonexistent then you will not make money, there have been studies that show that getting in the market at random but with a strong money management strategy can be enough to produce profits, also when we take into account the huge volatility of this market adding leveraging on top of it is an invitation to bankruptcy.

Crypto4ka

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Quote from: slaman29 on June 20, 2019, 07:17:46 AM

Quote from: k-a-r-l-0-2 on June 18, 2019, 02:10:51 PM

It seems crazy to me that people invest so much capital into margin trading. IMO, the benefit of doing it is that you don't need to invest and risk as much in the first place. I think the key is to be 100% comfortable with the fact that you could lose it all and decide whether the potential gains in the outcome of a successful trade is worth the risk of losing it all if unsuccessful. It is essentially a gamble if you use as much as 100x because a price action of just 1% can liquidate your position near instantly. I say either don't invest what you can't afford to lose, or don't use high leverage. If you wanna risk $100 for the opportunity to turn it into significantly more, then, by all means, go ahead - that seems like a fair trade-off to me. Just be aware of the risks. Also, you could try to hedge with an opposing position if possible.

I never get it myself. If you have $100 to trade, then trade with $100. Why would you ever want to pretend that you're trading with $1000? People forget:
To make profit as much as if you had $1000, you also have to risk that when you make a loss, you make a loss as if you had $10.

It's the same as borrowing money. Why would anyone ever borrow money to trade just makes me wonder. Trading is high risk as it is and the stats keep reminding us. But people just refuse to learn!

Yes. feel the same
As I understand lots of patience is needed to do successful margin trading

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Quote from: k-a-r-l-0-2 on June 18, 2019, 02:10:51 PM

It seems crazy to me that people invest so much capital into margin trading. IMO, the benefit of doing it is that you don't need to invest and risk as much in the first place. I think the key is to be 100% comfortable with the fact that you could lose it all and decide whether the potential gains in the outcome of a successful trade is worth the risk of losing it all if unsuccessful. It is essentially a gamble if you use as much as 100x because a price action of just 1% can liquidate your position near instantly. I say either don't invest what you can't afford to lose, or don't use high leverage. If you wanna risk $100 for the opportunity to turn it into significantly more, then, by all means, go ahead - that seems like a fair trade-off to me. Just be aware of the risks. Also, you could try to hedge with an opposing position if possible.

I never get it myself. If you have $100 to trade, then trade with $100. Why would you ever want to pretend that you're trading with $1000? People forget:
To make profit as much as if you had $1000, you also have to risk that when you make a loss, you make a loss as if you had $10.

It's the same as borrowing money. Why would anyone ever borrow money to trade just makes me wonder. Trading is high risk as it is and the stats keep reminding us. But people just refuse to learn!

Mark_R

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Quote from: leonix007 on June 20, 2019, 01:37:36 AM

Quote from: Mark_R on June 19, 2019, 10:24:45 AM

STOP-LOSS

This is an issue I was asked about in another thread, but find it appropriate to post the answer here as margin tradins is all about risk and money management

1)   ALWAYS set stop losses (obviously, but still)
2)   The base for your stop is not a book, but the current pattern, market state & your strategy:
-   Look at highs / lows, strong levels
-   Consider volatility
-   And volume
-   Pattern size
3)   Do not link stops to beautiful numbers (8000, 9000 etc). Just calculate it
4)   Calculate possible risk you can afford in advance (this is about the position sizing also, as well as the next point)
5)   Calculate risk-reward ratio in advance

Sometimes I move stop losses to breakeven, but this is a searate issue and should be treated with extremely high attention

Or set your stop loss in a state that invalidates your Trade positions Wink

I personally move my stop loss when its already in green portfolio state, protecting my gains

Yeap. Good strategy, but sometimes it cut potential profits. Anyway, you stay profitable, that's good enough

leonix007

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Quote from: Mark_R on June 19, 2019, 10:24:45 AM

STOP-LOSS

This is an issue I was asked about in another thread, but find it appropriate to post the answer here as margin tradins is all about risk and money management

1)   ALWAYS set stop losses (obviously, but still)
2)   The base for your stop is not a book, but the current pattern, market state & your strategy:
-   Look at highs / lows, strong levels
-   Consider volatility
-   And volume
-   Pattern size
3)   Do not link stops to beautiful numbers (8000, 9000 etc). Just calculate it
4)   Calculate possible risk you can afford in advance (this is about the position sizing also, as well as the next point)
5)   Calculate risk-reward ratio in advance

Sometimes I move stop losses to breakeven, but this is a searate issue and should be treated with extremely high attention

Or set your stop loss in a state that invalidates your Trade positions Wink

I personally move my stop loss when its already in green portfolio state, protecting my gains

Mark_R

member

Activity: 434

Merit: 34

STOP-LOSS

This is an issue I was asked about in another thread, but find it appropriate to post the answer here as margin tradins is all about risk and money management

1)   ALWAYS set stop losses (obviously, but still)
2)   The base for your stop is not a book, but the current pattern, market state & your strategy:
-   Look at highs / lows, strong levels
-   Consider volatility
-   And volume
-   Pattern size
3)   Do not link stops to beautiful numbers (8000, 9000 etc). Just calculate it
4)   Calculate possible risk you can afford in advance (this is about the position sizing also, as well as the next point)
5)   Calculate risk-reward ratio in advance

Sometimes I move stop losses to breakeven, but this is a searate issue and should be treated with extremely high attention

Mark_R

member

Activity: 434

Merit: 34

Quote from: zonom on June 19, 2019, 09:04:02 AM

Quote from: Lanatsa on June 18, 2019, 04:15:06 PM

Quote from: MadeinCoin on June 18, 2019, 04:56:50 AM

The problem for a beginner trader in my opinion is skil, emotion, MM. Beginner traders are more likely to have a little knowledge so that many losses are generated, so therefore take advantage of the best demo account to improve skills.
Middle traders are more likely to be unable to hold back emotions and look after MM, I think if you are a beginner trader it is better to learn gradually.

So far I also often lose, even the value is not small but from there I get valuable experience, and experience is my best teacher in trading.

Also the problem is that most people specially newbie or just new to trading do hurry up on doing margin because they do
saw that making money or profits is way too big compared on other system of trading like swings/trends etc. but they do lately
realize that it isnt really that simple and that do really cost them money.

Exactly. They consider it as easy money. Btw, I guess overall approach and the way newbie and experienced trader trade are completely different

Definitely. As trading becomes more systematic, the life and mindset become so as well.

zonom

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Quote from: Lanatsa on June 18, 2019, 04:15:06 PM

Quote from: MadeinCoin on June 18, 2019, 04:56:50 AM

The problem for a beginner trader in my opinion is skil, emotion, MM. Beginner traders are more likely to have a little knowledge so that many losses are generated, so therefore take advantage of the best demo account to improve skills.
Middle traders are more likely to be unable to hold back emotions and look after MM, I think if you are a beginner trader it is better to learn gradually.

So far I also often lose, even the value is not small but from there I get valuable experience, and experience is my best teacher in trading.

Also the problem is that most people specially newbie or just new to trading do hurry up on doing margin because they do
saw that making money or profits is way too big compared on other system of trading like swings/trends etc. but they do lately
realize that it isnt really that simple and that do really cost them money.

Exactly. They consider it as easy money. Btw, I guess overall approach and the way newbie and experienced trader trade are completely different

zonom

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Activity: 156

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Quote from: arpon11 on June 18, 2019, 01:26:24 PM

Quote from: cryptotalk93 on June 18, 2019, 08:05:55 AM

I am a Margin player.
https://imgur.com/ngIOuss
For me, to win the market.
Follow the trend, read the news and do not catching high.
believe what you see, most of the time, people get control by emotional.
FOMO will make you lose your money.
Over prediction will make you lose your money.

Just follow the trend and your feeling Grin

I don't do margin trade and that is because I have tried it in forex market and find very difficult to make profits. When I came into cryptocurrencies trading I tried to reduce my risk as minimal as possible and in that I don't used more than 2% of my capital in day trading and the remaining amount is for holding. Margin or leverage trading is not much different from gambling and it is very impossible not to make loses when you are gambling and so it is in margin trading! However, the trend is always our friend and the earliest we understand how to draw trendline and interpreting some candlestick pattern, the better it will be for us in trading.

Never tried Forex. Could you please tell more about your experience?

stellgod

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A lot of people make big mistakes to be sincere. A lot of people has destroyed their life by this belief that cryptocurrency is everything and the future. Don't be a fool, cryptocurrency is no future. Yes a lot of companies/institutions are getting involved, not because they think it is the future but because they want to make profit and that's all. So don't be deceived. Trade wisely cause cryptocurrency is a very risky business and when you mess up, your life is gone. The second story got me thinking the author is a very greedy person. He had two chances to stop but he refused and kept on, and now he feels like killing himself. That's very stupid. He lost the first one, came for revenge and lost, then he decided to pull out the coins he was saving and trade with it as well? Like who the heck in his right senses does that? If others does it, then not me… margin trading is not easy, don't be a fool. Yes a lot of money can come from it, but do the one you can do and save your money.

Lanatsa

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Quote from: MadeinCoin on June 18, 2019, 04:56:50 AM

The problem for a beginner trader in my opinion is skil, emotion, MM. Beginner traders are more likely to have a little knowledge so that many losses are generated, so therefore take advantage of the best demo account to improve skills.
Middle traders are more likely to be unable to hold back emotions and look after MM, I think if you are a beginner trader it is better to learn gradually.

So far I also often lose, even the value is not small but from there I get valuable experience, and experience is my best teacher in trading.

Also the problem is that most people specially newbie or just new to trading do hurry up on doing margin because they do
saw that making money or profits is way too big compared on other system of trading like swings/trends etc. but they do lately
realize that it isnt really that simple and that do really cost them money.

k-a-r-l-0-2

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It seems crazy to me that people invest so much capital into margin trading. IMO, the benefit of doing it is that you don't need to invest and risk as much in the first place. I think the key is to be 100% comfortable with the fact that you could lose it all and decide whether the potential gains in the outcome of a successful trade is worth the risk of losing it all if unsuccessful. It is essentially a gamble if you use as much as 100x because a price action of just 1% can liquidate your position near instantly. I say either don't invest what you can't afford to lose, or don't use high leverage. If you wanna risk $100 for the opportunity to turn it into significantly more, then, by all means, go ahead - that seems like a fair trade-off to me. Just be aware of the risks. Also, you could try to hedge with an opposing position if possible.

arpon11

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Quote from: cryptotalk93 on June 18, 2019, 08:05:55 AM

I am a Margin player.
https://imgur.com/ngIOuss
For me, to win the market.
Follow the trend, read the news and do not catching high.
believe what you see, most of the time, people get control by emotional.
FOMO will make you lose your money.
Over prediction will make you lose your money.

Just follow the trend and your feeling Grin

I don't do margin trade and that is because I have tried it in forex market and find very difficult to make profits. When I came into cryptocurrencies trading I tried to reduce my risk as minimal as possible and in that I don't used more than 2% of my capital in day trading and the remaining amount is for holding. Margin or leverage trading is not much different from gambling and it is very impossible not to make loses when you are gambling and so it is in margin trading! However, the trend is always our friend and the earliest we understand how to draw trendline and interpreting some candlestick pattern, the better it will be for us in trading.

FanEagle

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Margin trading will always have victims, there will be people who put too much leverage on their trading and they will lose because bitcoin is a very volatile currency and it will always go up and down in small numbers when you least expect it, so there is no way of stopping people from losing their money on high leverage.

What you can suggest people is to keep the leverages down if they really want to which I think they don't even need to since bitcoin is already giving you a decent profit on no leverage at all, you can simply have bitcoin and put it on a wallet and wait and you can double your money easily, if you doubt it check out people who bought at 3 thousand levels and now selling about triple that amount. Of course these are the only two options that have less risk but less reward as well so some people won't even listen.

cryptotalk93

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I am a Margin player.
https://imgur.com/ngIOuss
For me, to win the market.
Follow the trend, read the news and do not catching high.
believe what you see, most of the time, people get control by emotional.
FOMO will make you lose your money.
Over prediction will make you lose your money.

Just follow the trend and your feeling Grin

leonix007

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Quote from: Mark_R on June 18, 2019, 06:22:04 AM

Quote from: vixcious on June 18, 2019, 06:12:22 AM

Yes, I anticipated the risk of this type of transaction and it was really dangerous for new people. You know, there's something called whale signal. When so many people place money at a certain price, exchange exchange companies will notify whales and they can manipulate the price of BTC back and many traders are not aware of this.
it is completely a trap and it is not for inexperienced people. I will never engage in margin trading because it is a whale game.

Yes. Interesting point. Have you had an experience of margin trading?
Personally I cannot resist such a temptation. But tread margin trading carefully. This way, it is not so dangerous.

There are actually ways to go with temptations wisely

The key is Proper risk management

Protect your fund by setting up stop losses, Lower Leverage, Look at Risk Reward ratio if its worth entering a positions

Mark_R

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Quote from: vixcious on June 18, 2019, 06:12:22 AM

Yes, I anticipated the risk of this type of transaction and it was really dangerous for new people. You know, there's something called whale signal. When so many people place money at a certain price, exchange exchange companies will notify whales and they can manipulate the price of BTC back and many traders are not aware of this.
it is completely a trap and it is not for inexperienced people. I will never engage in margin trading because it is a whale game.

Yes. Interesting point. Have you had an experience of margin trading?
Personally I cannot resist such a temptation. But tread margin trading carefully. This way, it is not so dangerous.

vixcious

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Yes, I anticipated the risk of this type of transaction and it was really dangerous for new people. You know, there's something called whale signal. When so many people place money at a certain price, exchange exchange companies will notify whales and they can manipulate the price of BTC back and many traders are not aware of this.
it is completely a trap and it is not for inexperienced people. I will never engage in margin trading because it is a whale game.

Mark_R

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Activity: 434

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Quote from: MadeinCoin on June 18, 2019, 04:56:50 AM

The problem for a beginner trader in my opinion is skil, emotion, MM. Beginner traders are more likely to have a little knowledge so that many losses are generated, so therefore take advantage of the best demo account to improve skills.
Middle traders are more likely to be unable to hold back emotions and look after MM, I think if you are a beginner trader it is better to learn gradually.

So far I also often lose, even the value is not small but from there I get valuable experience, and experience is my best teacher in trading.

Tend to agree. Losses are an integral part of trading and learning. You can have brilliant tutors, but without your own experience you will still be a newbie

MadeinCoin

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The problem for a beginner trader in my opinion is skil, emotion, MM. Beginner traders are more likely to have a little knowledge so that many losses are generated, so therefore take advantage of the best demo account to improve skills.
Middle traders are more likely to be unable to hold back emotions and look after MM, I think if you are a beginner trader it is better to learn gradually.

So far I also often lose, even the value is not small but from there I get valuable experience, and experience is my best teacher in trading.

Topic: Margin trading victims and how to avoid losses - page 2. (Read 611 times)