A crypto trader faced his worst nightmare trading futures without risk management, losing $1.14m (N1,368,570,000) on Binance.
With the hope that BTC may go higher, considering its halving in less than a week, a man put all his net worth into trading an altcoin called PEPE.
Without proper risk management, he did not put his trade on Stop Loss (SL). According to Binance (SL) is an automatic function that allows a trader to set where to get out of a market should a position go against them.
As Israel-Iran conflict escalated, BTC price crashed and that set the prices of other cryptocurrencies crashing.
The man woke up to liquidation with his money gone. He said he did not even have up to $1000 (N1,200,500) in his account. In a subsequent post, he got $180,000 (N216,090,000) as its liquidation point was not up to 100% but 83%.
A seasoned crypto trader, Waliu, said the man is a gambler and should have done a proper risk assessment before the trade. He said: “As a trader, the first thing you should know is risk management. A good trader should not have risked more than 10% on a trade.
How come he placed on all his asset on a single trade? That is disastrous.”
See some reaction tweets below by some individuals:
@NobleCoins said: “Remember when I lost it all during Luna crash . I just look at myself right now and I keep smiling Don’t ever give up . As I always say to my student ‘you can come back as twice as tall’.”
@Plazma0x said: “This is why I’m long 1.5x and only on 20% if my net worth. If price goes near my liquidation I will just add more collateral until I can cover 100% of the borrowed funds.”
@EvanLuthra said: “Everything happens for good, brotha! The market will give you opportunities everyday, just catch them, you will make 100x of what you lost!”
@CryptoTony__ said: “Really sad to see stories like this and i hope this person recovers well and learns from the mistakes made. Lesson learnt, not to get greedy and use leverage when a good risk management strategy is in place.”
@mrbayoa1 said: “This is absolutely insane! What???”
@CryptoDefiLord said: “Funny how someone lose $1m to futures and people are sympathetic towards him lol. He is a gambler and he kept building on his position to hit big….”