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A crypto trader’s worst nightmare unfolded when he neglected risk management, resulting in a staggering loss of $1.14 million (N1,368,570,000) on Binance. Driven by optimism regarding Bitcoin’s potential surge, particularly with its halving imminent, the trader, known as cryptonerd75, invested his entire net worth into trading the altcoin PEPE.
Trading futures on crypto exchanges inherently involves higher risk due to leverages, where both profits and losses can be amplified. Despite utilizing a 3x leverage, the trader placed a $1.14 million bet on PEPE without implementing proper risk management measures such as setting a Stop Loss (SL). The SL function on Binance automatically triggers an exit from a market if a position moves against the trader.
Unfortunately, the escalation of tensions between Iran and Israel led to a significant Bitcoin dump, causing a ripple effect across the cryptocurrency market. As a result, the trader woke up to find his investment liquidated, with his funds completely wiped out. Shockingly, he revealed that he barely had $1000 (N1,200,500) in his bank account.
Subsequently, it was disclosed that the liquidation occurred at 83%, not reaching the full 100%. In response, a seasoned crypto trader, Waliu, criticized cryptonerd75’s actions, labeling him a gambler who failed to conduct proper risk assessment before executing the trade. He emphasized the importance of risk management, advising that a trader should never risk more than 10% of their assets on a single trade to avoid catastrophic losses.
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