A trader lost over $1 Million + on Binance Future trading

[Ludmilla_rose1995]

Reference

“Just woke up and realised I got liquidated overnight. I was 3x long PEPE. I lost everything I had. I don’t even have $1000 in my bank account but had $1M in Binance. I have been in crypto since 2017. Today I lost everything,” he posted.

This is one disadvantage of future trading. You can make a fortune over night trading on future, but you can also lose it all if you don't apply good risk management. It's obvious that this man did not set a stop-loss point; his greed overshadowed him with too much confidence that the bitcoin price can't dump since the halving is just around the corner.

It's hard to experience total liquidation like this on spot trading, but if I thought Binance by default doesn't allow 100% liquidation on future trading, at least it will automatically stop in the range of 85–90% of the trader's total assets they always tries to leave you with something.

how can he trade futures on PEPE tokens, meme tokens are famous for speculation and high risk, their value is created not because of use but because of the liquidity of several individuals

trading futures + MEME tokens + not setting a stop loss = 100% loss

He should have learned from the mistakes of many people when trading Shiba Inu tokens, only trading Bitcoin can make funds quite stable

[bitgolden]

I agree that stop loss is the biggest problem here, but considering how quick these are, even if you put a stop loss, it could crash before it's even sold, and that's not really impossible. You will try to sell cheaper and cheaper, whereas someone else will try to sell cheaper and cheaper, which could be sold and yours won't. In this case too, you may end up being in the wrong so much and the price changes so quickly that you may end up with absolutely nothing at all and you would end up with a trouble.

I would say that still putting up a stop loss is crucial, maybe it will work or maybe it won't work, but in the end we should still do whatever we can do with it, and that's the most important situation. I hope that we could get greater in the end with time.

[Lanatsa]

I agree that stop loss is the biggest problem here, but considering how quick these are, even if you put a stop loss, it could crash before it's even sold, and that's not really impossible. You will try to sell cheaper and cheaper, whereas someone else will try to sell cheaper and cheaper, which could be sold and yours won't. In this case too, you may end up being in the wrong so much and the price changes so quickly that you may end up with absolutely nothing at all and you would end up with a trouble.

I would say that still putting up a stop loss is crucial, maybe it will work or maybe it won't work, but in the end we should still do whatever we can do with it, and that's the most important situation. I hope that we could get greater in the end with time.

When making out some short trades or with those fast execution kind of positions on which Stop losses would really be that something recommended or something that not those short term traders would be using because on the time that the volatility would really be able to trigger it out then it would really be that a complete loss and this is something that you wont really be trying to cope up with those loses
but of course you would really be waiting up for some recovery but since we are dealing with high leverage then liquidation price might be hit and this could be ending up on having that overall loss.

This is why its not really that suggested or recommended for people to switch up directly with futures trading specially with those all in leverage 125x or even something that goes beyond 10x
then this is where i could really tell that its not something that everyone could really be able to pull it off. This is why as much as possible you should really be making yourself
that be getting used to spot first before you would be tending to go into futures.

[Natsuu]

I agree that stop loss is the biggest problem here, but considering how quick these are, even if you put a stop loss, it could crash before it's even sold, and that's not really impossible. You will try to sell cheaper and cheaper, whereas someone else will try to sell cheaper and cheaper, which could be sold and yours won't. In this case too, you may end up being in the wrong so much and the price changes so quickly that you may end up with absolutely nothing at all and you would end up with a trouble.

That is what you call slipage. That happens very slightly on Bitcoin because it is highly volatile. When it does, it is purely manipulation. But stop loss is a good thing. Most see it as a negative so they don't use it. But actually it is the one which has the only job to protect your capital in more losses. Because on the first place, you put your SL in an ideal level where it should be the invalidation of your initial trade. When you are wrong it will be triggered. You don't want to lose more money when you are wrong so you use the Stop loss especially if you are trading leveraged trades or in futures trading.