The currency circle is an extremely impetuous place, arrogant and extravagant. It is the greatest consensus to get rich overnight. This kind of extreme greed for wealth will eventually turn the word "greedy" into "poor".
At around 2:00 am on September 25th, the nightmare of investors in the currency circle struck, and there were constant text messages on mobile phones. According to Coin data, 6.65 billion yuan exploded on the same day alone, including 246 super retail investors of Bitcoin contracts, and countless grapefruit and Wright contract longs. Within one night, the 6.6 billion funds were all shorted Strangled and hunted.
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1. A small gamble is pleasant, a big gamble hurts the body, and a strong gamble is wiped out
In June of this year, Hui Yi, the founder of BitEase, suspected of misappropriating 2,000 bitcoins from customers and shorting them with 100 times leverage, resulting in a huge loss of more than 100 million yuan, and finally chose to commit suicide at the age of 42. However, no amount of bloody lessons can curb the gamblers' endless desires. The bloody history will only repeat itself countless times, and of course this time is no exception. For example, the affectionate confession of this liquidator has spread all over the currency circle, which is distressing.
The liquidator is a die-hard supporter of BSV. He was very afraid of leverage at first, but in the end, under the temptation, he embarked on the road of leverage. Because of my belief in BSV, even if it plummeted, I kept adding margins, trying to keep every BSV, and finally it was blown up in the middle of the night. The second half of the content also reveals the truth. At the moment of playing leverage, it becomes a matter of time before the liquidation.
Also the father of a daughter, the self-report of the liquidator couldn't help but brought tears to his eyes.
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2. Should leverage be used in investment?
The currency market can be regarded as a probability game. The trend of the future big cycle can be predicted, but the specific time and point are completely random and impossible to predict. Many people are trying to find reasons after this plunge. In fact, most of the plunges are unreasonable, just like the law of the dark forest of the Three-Body Problem, you cannot predict when someone will shoot.
The addition of leverage makes time your enemy. As the risk increases, it becomes more and more uncontrollable. Many people are directly dumbfounded after facing extreme market conditions. They don’t know what they are thinking. Controllable Investing ends up being a wild gamble.
1. The biggest danger of leverage: addiction
In the currency circle, we often see that many people are posting the rate of return of the contract. It seems that money is too easy to make. There is no doubt that it is easier to make money by playing leverage. This is the biggest harm of leverage. It's cool for a while, and it's cool all the time. This illusion will quickly reduce your vigilance against leverage and make you get used to it.
Leverage, like gambling, is addictive, and using it has been a huge success from the start. According to Pavlov's conditioned reflex theory, people will repeat and amplify the last successful experience. Successful people will increase their leveraged bets and fail miserably.
There is nothing wrong with leverage itself. Leverage is just a capital allocation tool in investment. The root of the problem lies in the people who use leverage.
2. The biggest risk of leverage has nothing to do with multiples
The risk of leverage has nothing to do with high or low. High leverage does not necessarily mean high risk. High risk is brought about by high leverage plus heavy positions and adverse trends. Similarly, low multiples do not mean low risk.
High-volume heavy warehouse: death has no place to die.
Heavy positions with low multiples: set the stop loss far or no stop loss, and the extreme market is still a one-pot end.
High magnification and light storage: it will explode when it explodes, and the cost of loss is not large.
Low magnification and light storage: the hair can't be touched.
Therefore, reasonable control of positions is the correct way to control risks, rather than just reducing leverage.
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3. In the encrypted world, the leftover is king
Short-term market fluctuations follow completely random laws, which is the basic consensus of all Wall Street bigwigs. Most people play leverage because they believe that they can predict short-term market conditions, so please stop that foolish fantasy immediately.
But it is not difficult to predict the big cycle. After all, people cannot escape the word "greedy", because no one wants to get rich slowly. Investing is a marathon, and you can only win after running the whole distance. Any explosion in the middle has nothing to do with the final result, and it will even exhaust you and hollow you out.
We can see the day after tomorrow, but if we die tomorrow, the day after tomorrow is meaningless.
The currency circle has never lacked celebrities, but what is lacking is birthday stars. On the road to investment, slow is fast, and fast is slow.
