In a bull market, success stories abound and many crypto pioneers have turned into millionaires.
But it is very important to know that the crypto market is not always a green place with rainbows and butterflies hovering around, but rather harsh and harmful losses and losses.
Recently, a thread investor posted on Twitter telling his story about losing his entire portfolio, which amounted to $ 185,000.
The loss was in just 3 weeks.
If you think that it is an exaggeration and that such stories are widespread and are intended to attract attention only, you can verify the address of what this person had with his Ethereum address.
The story below is intended as a lesson and a reminder to traders that bull markets do not last forever, and it is important not to indulge in greed.
On April 11th, according to the investor in the focus of our article, the alternative cryptocurrency season was in full swing, and what he owned was invested in robust ventures with relatively low volatility.
However, this investor says that he has lost patience and started to over-trade on the decentralized trading platform Uniswap for faster gains.
But things and his trading deals weren’t quite as well, as his entry and exit strategies and timing were very poor.
This caused him to lose more than 50% of what he owned.
On April 20, out of despair, he converted a large sum into a highly volatile cryptocurrency with less robust fundamentals, but a greater chance for quicker gains and also a faster risk of losses!
This investor continued this pattern, continuing to invest in more volatile / risky currencies, rather than making strong trades in the medium to long term.
In the end, the last coin in which the rug had invested was pulled from under his feet (a scam), and almost everything was lost in it.
What can we learn from this?
Undoubtedly, there are many lessons to be learned from what this investor was told, but let’s focus on the most important ones.
Don’t take profits and profits for granted.
The cryptocurrency market is a volatile place, and it could descend as quickly as it did.
Also, emerging markets do not last forever, and it is important for people to remember periodically that strong and strongly present projects can be invested in as they are safer compared to volatile and risky digital currencies.
Another lesson that can be learned from the above story is:
Don’t let emotions cloud your judgment.
Once a loss occurs, it is usually best to roll back and take a break from the market, to calm down and study the weaknesses and causes of the loss.
Without this, you may risk ending up in a retaliatory trade, and your emotions will cause irrational decisions, such as investing in more risky ways or using more leverage.
De-emotion is a preliminary study of your plan and strategy. If your risk appetite is limited to 10-20% of volatility, stick to cryptocurrencies with greater market value.
And if you’re looking to hit the land of small-cap cryptocurrencies on Uniswap or PancakeSwap, you should be flexible enough to withstand much higher volatility, as would be expected from such currencies.
Without this mental preparation, you will fall prey to emotion.