Prediction evidence

Sa

SalsaTekila

@SalsaTekila

I would be broke right now if I had ever deposited more than 1-5% of my net worth on margin platforms. I'm down a bunch from the peak, but in hindsight my discipline in not depositing massive chunks of money (relative to net worth) to try to make losses back is the reason that I am still well positioned relative to how wrong I was on the pathway forward (up) for BTC. People often talk about counterparty risk, proper, efficient use of capital, and other generic reasons why leverage is a good tool. Its most powerful use case is letting you keep deposits small, which protects you from yourself. I know too many crypto bros who went bust, sometimes multiple cycles in a row, from keeping all their funds on exchanges. They always end up with a monster-sized trade and the rest is history. I strongly recommend only depositing a fraction to exchanges for trading purposes if you are a speculator. If you lose 1-5%, it generally won't affect your livelihood too much, and it acts as a hard stop you can't bypass on any given position (cheating risk, adding underwater, loosening stops, etc.). Another layer, which I learnt from @bitbitcrypto when we sat at the same prop desk, is that you are a different person after a good night's sleep. I remember getting over-obsessed with single bets or a single market phase. So, I would always have a good rest before re-depositing, or wait a certain amount of time. This gives perspective and realigns you with reality after swinging around large amounts of money relative to what you might earn in more traditional jobs. Bonus: take some time to journal in those periods. This will truly help you learn from the past and align with reality. I tend to be a 'Degen': bet the house too often, over-weight my own conviction then act on it, and bet too big relative to my margin equity. It's double-edged: I will often bust a deposit, but sometimes 100x it. The past 2 years I've happened to bust a lot of deposits, on top of round-tripping millions in unrealized profits. Hard to say what would've happened if BTC had continued to 200-300K in the same trend like I had envisioned. I'd prob be hilariously rich rather than writing this on Twitter. Leverage trading is heavily path-dependent; timing is everything. Markets will trick you into greed and fear at the worst moments, and believing I am immune to this would be arrogance. I no longer recommend that people even try to learn trading on leverage. Because I think a lot of my lifetime PnL (most of it in 2021) is simply due to the market I was in going up 100x. I think just buying spot BTC will provide at minimum 10-15x over a decade (probably 5 years IMO). That being said, if you do try your luck, utilize the above trick to cap your downside. Or you won't survive. tl;dr - deposit small, never re-fill the margin account before a good night sleep. You will literally die, but not today.