FOMO of bull market
FOMO of bull market
So, I longed chainlink yesterday, with 10x leverage as market appeared so good. Now, there has been dump and my position got liquidated.
I usually go with 2-4x leverage, and that gives me safer liquidation price however this time I went with 10x leverage, as I thought bulls have arrived, and it’s only up from here, and you see how wrong that turned out.
Take whatever lesson you want. For me, it’s to stick with 2-4x leverage with which I tend to do good, don’t allow greed to enter.
Using too much leverage can lead to liquidation. For coins like Chainlink, it is good not to go more than 2x. The only coin that I can go up to 4 or 5x is bitcoin. But for altcoins, I go for 2x which I am still afraid of at times, especially if I want to open the position for a long period of time. Sometimes I prefer to just use 0.5x to 1x and not going beyond that.
Always look at open interest and funding rates to know if you’re bullish because of your personal analysis/intuition, or if you’re generally bullish with everyone. The longs liquidated since the last 12 hours was like $310 million. Safe to assume that there was a good amount of euphoria.
2x leverage is a safe one to use and 4x leverage is starting to be very risky. The bottom line is when a trader touches leverage trading, initially he will use low leverage like 2x but later he will come to a point of uncontrollable greediness so that he will use higher leverages like 4x or 10x or maybe 25x.
You are an example of uncontrollable leverage taking because of the market volatility when a trader sees chance, takes higher risk, bad ending will come.
My advice always is, don’t touch Leverage if you want to be safe.