Beginners Should Avoid Leveraged Tokens Trading

[BD Crypto]

I have some investment in Leveraged tokens in Mexc exchange which are Doge5L, Eth5L. But I am astonished when I saw that my 35$ investment goes to almost 0. When Eth was around 1750 $ then I invested in EthBull but Eth now at around 1870$ but my assets are almost 0. I am holding almost 4/5 months are day by day it's decreasing though Doge and Eth pumped a little. So my request to every beginners who want to trade leveraged tokens don't hold it for long term as they are getting lower day by day. You can hold it for short term but I will suggest you not to do this. I think it's better to trade futures trading with low leverage than trading with these leveraged tokens.

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[Oshosondy]

I have seen this on Kucoin and Bybit. If you want to trade leverage token on both exchanges, you will see a warning, about how it should be used for short time trading and how risky it is.

On Bybit:

 



On Kucoin:



If you click on the product information on Kucoin, you will see better explanation.

Is it not like that on MEXC too?

The exchanges I see such tokens, there are always warning about it.

[OcTradism]

So my request to every beginners who want to trade leveraged tokens don't hold it for long term as they are getting lower day by day. You can hold it for short term but I will suggest you not to do this.

Trading and investment are different.

Why you are in a trading position but holding your token long time? When you don't know what you are doing, you can not manage risk and liquidations will come.

I think it's better to trade futures trading with low leverage than trading with these leveraged tokens.

Trading with Futures is another bad choice from you. By trading with Leverages, Leveraged tokens, Futures, you are making exchanges richer but making yourself poorer.

If you trade, trade with Spot only. Never click on Future, Leverage tabs and click on Agree to their terms to activate those trading tabs. After you activating those tabs, it will be very hard for you to control your greed and not use those derivative trading tabs.

[ImThour]

Yet alone leveraged tokens, you should also avoid Futures. It's a similar concept with leverage of up to 100x for every Crypto asset available in the market.
Here is the Liquidation data for the past 24 hours: https://www.coinglass.com/LiquidationData

In the past 24 hours, 98,577 traders were liquidated, the total liquidations come in at $274.18 million.

[un_rank]

Beginners have no business using leverage while trading or playing around with futures. It is very easy to have your share vanish while trading if you do not know what you are doing.

If you are not absolutely sure of what you are doing then avoid putting money into it.

- Jay -

[Xal0lex]

Margin trading should be avoided if possible by everyone, not just beginners. This is the fastest way to lose money. In a spot, you can sit in a negative trade indefinitely, but not in margin trading. In addition, the cryptocurrency market is very volatile, and without margin trading, you get excellent percentages of profit. The only thing worse than margin trading can be margin trading in altcoins or some outright shitcoins, like memcoin PEPE or NFT.

[skarais]

Margin trading should be avoided if possible by everyone, not just beginners. This is the fastest way to lose money. In a spot, you can sit in a negative trade indefinitely, but not in margin trading. In addition, the cryptocurrency market is very volatile, and without margin trading, you get excellent percentages of profit. The only thing worse than margin trading can be margin trading in altcoins or some outright shitcoins, like memcoin PEPE or NFT.

Makes sense, Xal0lex. Beginners and anyone should avoid it if they have no expertise in margin trading.
Not everyone will lose money on margin trading, but most will because of a lack of experience and knowledge. Crypto markets fluctuate all the time and maybe they need to avoid the high risk of loss from margin for some other types of trading such as spot trading.

[hatshepsut93]

Everyone should avoid token trading, it's a heavily manipulated market for trading hot air. There is not fundamentals here, tokens go up and down purely because of hype and manipulation, not because they have utility. Leveraged trading should also generally be avoided, only a small 2x or 3x leverage makes sense when you are experienced trader who trades a solid asset like Bitcoin.

[hd49728]

Everyone should avoid token trading, it's a heavily manipulated market for trading hot air. There is not fundamentals here, tokens go up and down purely because of hype and manipulation, not because they have utility. Leveraged trading should also generally be avoided, only a small 2x or 3x leverage makes sense when you are experienced trader who trades a solid asset like Bitcoin.

Trading with Mintable tokens is risky and more risky than Proof of Work coins. Tokens can be minted by developers but Proof of Work coins can not be minted but only can be mined with time by miners.

This topic discusses about a more risky thing, trading with leveraged tokens. With leverages, it is bigger risk than with tokens in Spot trading.

Tokens are usually useless in utility and have very high in their inflation so token price mostly will decrease with time. Like the US. dollar, fiat currencies have their decreasing purchasing power with time, inflationary tokens will have decreasing prices with time.

If you hold those tokens, you lose.
If you trade those tokens with leverages, like Short you will be killed by bounces.
If you trade them with leverages for Long, you will be killed by market fud, token crashes.

[Lagduf]

WTF are you doing? you have almost zero knowledge about that and why were you still picking it? leverage token was only for people who are looking for a very high volatility. Future was a bit easy compared with leverage token as it's not as volatilt as leverage token.

It's only amateur who used leverage token for long term investment. 

[Xal0lex]

Margin trading should be avoided if possible by everyone, not just beginners. This is the fastest way to lose money. In a spot, you can sit in a negative trade indefinitely, but not in margin trading. In addition, the cryptocurrency market is very volatile, and without margin trading, you get excellent percentages of profit. The only thing worse than margin trading can be margin trading in altcoins or some outright shitcoins, like memcoin PEPE or NFT.

Makes sense, Xal0lex. Beginners and anyone should avoid it if they have no expertise in margin trading.
Not everyone will lose money on margin trading, but most will because of a lack of experience and knowledge. Crypto markets fluctuate all the time and maybe they need to avoid the high risk of loss from margin for some other types of trading such as spot trading.

Even so-called experienced traders also lose money on margin trading. Not everyone will lose money, but almost everyone will lose their money, because the volatility is very high, even bitcoin sometimes loses 50% of its price in a day. I am always amazed at the amount of liquidations during the next flash crash, traders' deposits are liquidated for billions of dollars, which means losses for almost everyone, both beginners and experienced.

[Blitzboy]

Alright, let's get something straight: these crypto tokens, they're pretty much the honey badgers of the digital coinage biosphere, unyielding and wildly erratic. Quicker than you can utter "blockchain," they can evaporate your investment capital. Your adventure, is an unadulterated portrayal of 'decay', which, in the financial lingo, signifies "the marketplace swiped my assets whilst I was occupied toasting to DOGE's rate climb."

However, don't get it twisted. Leveraged tokens aren't universally appalling. They resemble those ludicrously hot chicken wings you find at a local bar. While they may not be for everyone, there's a certain subset of risk-loving individuals who savour the rush. To the novices out there, here's a piece of advice: steer clear of leveraged tokens unless you're well-versed in their workings. Failing to do so is akin to showing up at a firefight armed with only a butter knife!

[leonair]

~snip~

You must have been warned by the exchange when you went to buy the leveraged tokens. You have agreed to that warning and bought the tokens. So it is entirely your responsibility.  You can't blame anyone for that. Just as trading with leverage is high risk in futures trading, buying leveraged tokens is also high risk in spot too. You should have stayed away from them. there are a lot of potential tokens in the market where you could have gotten something better and at least you could have avoided such a big loss even if you had lost some.

[hugeblack]

You cannot trade with margin and futures contracts with such ignorance, it is not trading in regular contracts and therefore you are restricted by a margin percentage and a certain date for closing the contract, otherwise it will be liquidated at a loss and therefore it is not long-term trading.
For long-term trading, you can start with spot trading, as it is easier and the orders are simpler.

[noorman0]

Despite the volatility, this token is not recommended in the long term as it is not allowed to be withdrawn. We do not know to what extent the exchanges will be fine, when they have failure at some point, these tokens can also become untrustworthy which can suddenly lose trading liquidity.

Trading in longer timeframes can be categorized as an investment, and it is recommended not to hold on to the exchange.

[Iyeman]

My first time to see that if there was someone who using leverage token as investment. Have you read what's the purpose from the leverage token before? I think that if you were reading it so well and you will not be ended in a loss.

Leverage token is far risky compared with futures trade but both can make you lose your money.

[Doan9269]

My first time to see that if there was someone who using leverage token as investment. Have you read what's the purpose from the leverage token before? I think that if you were reading it so well and you will not be ended in a loss.

Leverage token is far risky compared with futures trade but both can make you lose your money.

Maybe some don't actually know what it entails further more before they badge into it, trading on itself has its own demands and risk while those that go on leverage trading do not have a good understanding of some of these conditions attached because they will not have the opportunity to make any readjustment while reading than to embrace the outcome that comes in after the trading, there's nothing to leverage on when trading than to get yourself the readiness for it right before you start trading.

[bangjoe]

That is indeed not an effective thing in terms of investment, no matter how good people in trade will not do that, it is indeed a silly decision to buy investment token leverage.

But with this, it seems that he learned his mistakes and became a knowledge in the trading of his trading, I think this experience is not so bad if he finds a lesson from his mistakes.
I also used to do that, but I did not do it for a long time like the OP did, only 24 hours but my money was lost somewhere, even though the price comparison was not so far.

Hopefully it becomes a useful knowledge or learning for OP, and does not repeat it again.

[FahriZah]

Begin time who comes early in crypto market and want to do trade and take some profit kindly always avoid leverage trade and i recommended always who new in crypto than starting with Spot trade at begin times as well.

[killerfrost]

Strong price fluctuations along with the fees incurred during trading are problems that cause even professional traders to experience losses. So when you are inexperienced in trading, using leverage to optimize profits is just like hanging yourself. I don't recommend people to trade them often, but I know that optimizing profits with leverage can do great things, but if it's a balance between profit and risk on each trade responsible decision-making from the outset always requires careful consideration.