It could be same as stock trading, but I have seen a pattern among crypto enthusiasts, following others in fear of missing out and since Bitcoin and other coins are too volatile sometimes, many people lose huge amounts. Thoughts?
What causes crypto trading losses? Leverage trading, FOMO or lack of knowledge
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Re: What causes crypto trading losses? Leverage trading, FOMO or lack of knowledge
#2All trading losses can be explained as losing traders not understanding and properly accounting for the risk of their strategy.
It is a safe bet that most retail traders are not at all systematic in their trading or use poor systems, which are moral equivalents in this world.
A good trader looks for arbitrage opportunities, or failing to find any, takes calculated risks.
In bubbling markets, FOMO makes people risk-seeking as opposed to risk neutral. They overpay for risk, the volatility becomes a selling point. The bet works out for some, but most will be burned. It is basic statistics.
Re: What causes crypto trading losses? Leverage trading, FOMO or lack of knowledge
#3All trading losses can be explained as losing traders not understanding and properly accounting for the risk of their strategy. It is a safe bet that most retail traders are not at all systematic in their trading or use poor systems, which are moral equivalents in this world. A good trader looks for arbitrage opportunities, or failing to find any, takes calculated risks. In bubbling markets, FOMO makes people risk-se…
yes, absolutely spot on. Another thing which I have witnessed is the top youtube crypto leaders sharing important insights, but many times the prediction goes sideways and a lot of people loose tons of money.