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Went Leveraged Long 13x

Andddddddd we were liquidated haha.

I learned a few valuable lessons from investing with leverage that have led me to conclude that it is not going to be for me.

1. The Market Doesn't Make Sense

I think that one absolute myth is that there are people who think that they are able to predict the market based on price trends. I did some research on different patterns and metrics in crypto markets that supposedly reflect bullish or bearish signals, but just couldn't find myself believing it at face value. When people are analyzing charts from the past, it is incredible easy to attribute cause and effect to certain patterns because you are seeing the end result already. When it comes to predicting the future, I feel like we would see a lot more millionaires and billionaires if people were able to choose plays with any type of reliable consistency.

The truth seems to be that anything can happen at any given moment. My BNB long was going to trigger a sell for a 50% gain if it touched $450 a coin, and after touching $445 a coin, it dipped down to $400 in the next 24 hours and liquidated the position. Literally anything can happen and we have no control over any of it in the end.

2. Liquidation Points Are Vulnerable

By providing a price point where you can lose your entire investment, you make yourself incredibly vulnerable to price swings. I have full confidence that the price of BNB will reach $450 again, but really had no idea whether it would hit that point before or after it retested $400. The point is once again that trading on leverage just adds another risk to your investment that could swing either way, yet in an environment like cryptocurrency must surely be more likely to go badly (or else I can't see why it would even be offered to use).

3. If You Can't Get Liquidated, You Haven't Lost Yet

So after running that little experiment, I decided that the investments for me would be long-term stacking ones where I am not at risk of losing it all during a downturn.

Even if your investment is down 70%, if you are holding the token and are not playing the game from a leveraged position, you can hold onto it until it rebounds. Of course, this may just prolong your pain as you hold the bag waiting for the bounce back, but it also gives the possibility of recovery where liquidation destroys it 100%.

I will stick with proof-of-stake investments such as Hive because I know that I can compound my earnings by actively using my stake. If USD value of the tokens drop, it is still possible to make it back simply through earning and engaging while waiting for that price rebound that we all hope to see.

Moving On

I'll be stacking. I bought this dip a little bit to recover the USD value I lost on the liquidation in my portfolio, but decided to put that value into RUNE and LINK instead of returning to BNB. Whatever you decide to do, be sure to assess your risk tolerance and make decisions based on that. I will be stacking, leverage sucks lol.

NFA

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Who I am:
My name is Rob and I am a prospective law student with interests in cryptocurrency and blockchain. I have enjoyed my time thus far engaging with Web 3.0 and am looking to continue learning more and sharing what I learn through my experience