Experts gave "bad advice" on what to do to lose your funds when trading digital money
Cryptocurrencies are classified as high-risk assets. This is a young and highly volatile market that can lead to losses. You can lose all funds on it in different ways. Experts talked about what needs to be done to incur serious losses.
To be guaranteed to lose your deposit, Anton Kravchenko, CEO of Xena Financial Systems, recommended trading cryptocurrencies with a leverage higher than x5. According to the expert, in this case, strong market fluctuations and commissions for a large number of transactions will nullify the capital.
Also, in order to receive losses, Kravchenko advised buying unknown tokens of new projects. He explained that good projects at the start cannot be bought by people “off the street”.
“If you were given to buy a project at the start with a small capital, then this is most likely a bad project,” said Kravchenko. He also added that you can lose money by investing it in DeFi projects with an interest rate above 25% per year, since they have too large hidden risks of the protocols.
You can incur financial losses if you open a position without an idea – for luck, said Vitaly Kirpichev, Development Director at TradingView in Russia. According to him, this approach is similar to playing in a casino and cannot be applied to systemic trading on the stock exchange.
Among other things, Kirpichev recommended copying someone else's transactions mechanically and not observing his own trading rules to ensure the receipt of losses. He noted that you can lose your funds if you have a complex strategy without the ability to follow it, as well as trade intraday without the ability to constantly monitor the market.
“Day trading shouldn't be treated like a hobby. It's a full-fledged job and more. If you shirk it, you will definitely lose money, ”the expert explained.
He attributed the risks of loss of funds to the use of leverage without stop-losses and averaging a losing position using borrowed funds. In this case, you can lose not only your own money, but also the broker's money. Kirpichev also advised to be self-confident, to work without regard to risks in order to lose their funds.
“It is at this moment that you can make a mistake that will ruin your entire deposit. Remember – you cannot earn all the money, you can only lose all the money, ”Kirpichev noted.
To lose all funds, you can buy an asset at the highest point of value and sell at the bottom, added Dmitry Machikhin, CEO of the investment fund Pressman Capital. This behavior is often caused by emotional actions and the loss of profits syndrome (FOMO).
According to the expert, you can lose your money if you invest in financial pyramids or give cryptocurrency to private individuals in trust. In addition, the specialist explained that for losses, you can invest your funds in one asset and not diversify your portfolio.