By CRYPTOXICATE | Cryptoxicate | 8 Apr 2021


**Always take in consideration non of this information is financial advice or official announcement from any specific project, I’m no financial advisor, trader or expert, this is just my personal opinion on certain project mention on this article, cryptocurrencies are extreme high risk assets and you must do you own research, never follow what I or other people say on internet**




I wanted to do a small article about the risks of leverage trading because all I see is ppl getting into the space and from the start use leverage without having any trading experience and to my surprise some of them don’t even know what is spot trading although they know they can buy and hold that at the end of the day is spot trading although for a swing or long term trade.

Trading with leverage is extremely risky and I think it has been exploited in the crypto market space, I’m not even a “plankton” creator; don’t make it for a leaving nor have the audience, I was very surprise that recently two exchanges contact me offering a deal where I can create trading competitions and get 35% commission and the other one offer me the classic $150 bonus for anyone who sing up with my referral link. At first didn’t answer the emails because I just didn’t like the fact that an “exchange” big exchanges actually, contacting me when I really have no audience so I was curious what were this promotions about, when I got the details that I mention one of them said ” some of our biggest partners in YT are TheMoon, MMCrypto..etc I was like WTF if this guy only knew I despite this type of creators that bring nothing to the table.

Trading with leverage has nothing to do with crypto, leverage trading is not what crypto is about not even when you trade coin vs coin, one of the basic concepts of the crypto community is buy and hold not even to be trading on a daily bases unless as myself who got hocked into day trading and want to trade no matter the asset, got my moon bags but then trade almost on a daily bases because recently I’m not trading sundays and when I’m not feeling like if I had like three great days I take one or two days off.

I have been trading now for over two years and just recently about a few months start getting good results, my preference is to go short so my results have close to nothing to do with a bull market, bulltards this year are just addicted to that green button and go long, my point is that I went through a lot of things to at least start considering I’m been consistent. To become consistent I had to learn things that to certain extension go against natural human behavior and some are so simple but modify your behavior to certain situations is very hard, at least was for me.

Getting liquidated should be avoid at all costs unless its a crazy freak of nature candle, in my case that most of the time I’m short a 20% 1 minute candle that’s fine if it happens and for some reason my stop loss doesn’t trigger or the move was way to fast for the algo to react but getting liquidated should never happen for a few reasons:

1- Always use a stop loss, the way to play this game is to stay as long as you can in the game, you need money to stay in the game and adding more money doesn’t count.

2- You should know how much you can loose and its never 100% of the trade unless your trading becomes more advance and start using position sizing.

3- You MUST learn how to loose and move to the next trade.

Might sound stupid but this is one of the things that I practice on a daily bases, either if its a manual trade or even when I’m supervising the algo, “its better not to make money than to loose money”, what I mean by how to make less money is don’t put all your money into 1 trade you should not even be using 10% of your stack, at most start very little like 3% because then you have 97% left if you loose that trade in the event you get liquidated but as mention that’s is something that must be avoid at all cost, there are times that I F up my entry and is so shtti that I could be looking at the chart been only 5% down and close the trade at a loss because I prefer to loose that much at the very start than having all that stress with a pain the ass trade all fkn day.

Daily Goals, this helps me too but sometimes could be tricky since you could become addicted to your PNL, at first it happen to me but then with time notice I was trading more relax not looking at my pnl just focus on the current trades and when they were close then look at my pnl and recently I really don’t look at it that much but for me having a daily goal helps me also to calculate my stop loss and how long would take me to recover.

This past three days; sunday, monday and tuesday, were great for me so I took off wednesday and saw how the market was having a down day wo decided to trade the Asia session (me last night) expecting more volatility and upside, ran a few shorts and two longs, did great and had a $BLZ trade open very little with the algo, saw my PNL for the session and said you know what F it close the trade at -3% and logoff, reason why is because I already felt good with my gains for the day just in three hours of trading so why look for trouble, as a fact after that the thing ran another 8% against me so that behavior that I have develop to feeling ok with my gains and satisfied, without trading every single day has safe me from such situations sometimes without even thinking too much about it.

This is one of the parts that I think could be the most problematic for most ppl starting into leverage trading because on spot you can just buy and sit on your hands for years even at a loss as long as its a good project.

When trading with leverage there will be many times that your strategy was ok but something happens in the market that makes it go against like for example a hack, a project or dapp in this days can get hacked and a dump may happen that can bring down your long position or a partnership or listing can be announce and F up your short position so there are sometimes you CANT beat the market and you need to cut losses, this is where having a stop loss come into place, with a stop loss already in place you should know how much you can loose based on your average daily gains so if it comes that stop loss hits then you know ok that’s fine I can make that back in a couple of days based on my average daily gains and keep moving, I did that mistake many times where I was deep in margin and -UPNL but still thought that I could beat the market, that’s another reason I do some automated trading.

The worst enemy in trading is yourself, only you should be taking decisions on when to jump into or get out of a trade but usually the worst decisions are made based on feelings, fear most of the time, when a trade is so bad but you think that by adding more at some point it will turn around or the most classic “OMG if I can only brake even” never ever look for braking even because there is a high chance you wont be able to do it, usually when that though kicks in is because you are deep in troubles. The two things that help me to avoid this type of situations are Max Position and Stop Loss

Examples: Lets say you have $1000 and your daily gains are 1%

Max Position: I cant trade with more than 10% , that is $10 per trade

Stop Loss: I can only loose 35% of the 10% I’m willing to use, meaning I would loose $35 if get stop out but then it would take me 3.5 days to recover based on my average daily gains.

Sometimes you will make way more than your average and with time that adds up to a point that you can easily take a few days off and relax, but even if it hurst you have to take the pain because if you don’t then you will keep moving your max position and stop loss to end up in deep losses.

You can find all this theory around the internet and this is one of the millions and millions of articles that have been written about the risks of trading with leverage and still only 95% of the trades make money, I’m still in the process of learning, really don’t consider myself a trader until I probably have like a year of been consistent, yes I will eventually get stop out but recover and keep on going like anything else in life but also have to be consistent at not getting stop out too frequent so I can keep my stack and profitable in trading.

Conclusion, leverage trading has nothing to do with crypto, could become addictive, destructive and very dangerous mentally and financially for anyone who doesn’t threat it as a business, serious and with respect


Now that the main topic of this post is out lets do some Bitcoin recap because on tuesday saw a lot of chickens without heads running around, meaning buch of ppl calling the top just because of some sideways movement.

Bitcoin 1D Chart

My Bitcoin chart haven’t change since my last post


I still believe the next stage of the market is EUPHORIA where verything goes up like crazy in a matter of weeks, same goes for Bitcoin, probably this would take us to September where we see the peak of the bullrun, it will be very interesting how “Institutions” and media will react once the bear hits and how much different will be from previous cycles, I see Bitcoin on this $55k to $58k consolidation channel that could even hit $50k again but for Bitcoin to remain bullish it cant hit $45k again because the possibility of a head and shoulder can present and break the neck line meaning a possible big dump, I find that unlikely but not impossible after all its trading.

On the altcoin department there are a lot of altcoins into price discovery and we also have ETHEREUM finally discovering price too because for about two months yes it was over 2017 ATH but wasn’t moving that much so it wasn’t discovering any price neither, having ETHEREUM moving again has bring the rest of the altcoins back to a situation of a lot of volatility and Bitcoin to a range of sideways movement for now.

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