Different level of risk in crypto currency trading
Different level of risk in crypto currency trading
Hi,
I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.
But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying ‘Highly volatile investment product. Your capital is at risk.’ (which is a banner sponsored by etoro, but it doesnt appear at all cryptos…)
I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot…
If anyone could shed some light on this that would be appreciated.
The majority of the cryptocurrencies bear the same risk except for the stable coins. From the root word, they are stable and serves as the fiat in the crypto market.
Bitcoin is risky and altcoins too.
Defining them by level, they are the same in levels. A good basis is to look at the liquidity or volume of a coin. It will give you an idea if it’s going to fluctuate that much by looking at the high daily volume. But if that coin doesn’t have that much, just leave it and don’t buy it.