How I Made Over $225,640 In A Day… And Then Lost It
A Major Money Mistake You Should Avoid
Made with Midjouney. I tried to recreated myself, and my dog.
You’re probably wondering, “How in the world did he make over 3 times the average annual salary in one day, and lose it?”
The short answer is: trading crypto with leverage.
And now, either you’re wondering what the hell I’m talking about, or you’re thinking “What an idiot”.
Regardless, I made $225,640.00 USD in 24 hours (then lost it) and I’m going to tell you how.
But first, here is a brief explanation of what trading with leverage means:
Trading with leverage is a strategy that allows you to increase your exposure to a financial market without increasing your initial investment. Leverage is provided by the trading platform (the broker) which essentially lends you funds to amplify your position.
Since the trading platform is lending you funds, your position needs only dip by a few percent to whip you out, which makes it risky. However, since you are essentially borrowing funds, if it raises, your profits are much more. High risk, high reward.
How Did I Make Over 225k?
During the covid lockdowns. I was bored and decided to start trading crypto with leverage to occupy my time, and hopefully, make extra money.
It was working for a while and I was having fun.
One weekend I started making more money and had turned $2000 into $25000. I was feeling confident that my calls and technical analysis skills were improving and getting more accurate so I decided to increase the leverage of my trades.
It’s important to remember that the higher leverage you go, the riskier your trade will be. You can get quickly cleaned out if your call is off by just a few percent.
The trade I made had a longer expected timeline. I was up about $60000.
That night a couple of friends came over and I left my computer open so that I could keep an eye on my trade.
A terrible decision was made… I left my martini glass next to my laptop.
Some drunken shenanigans went down, I knocked my drink over my laptop and the whole thing shut down.
After flipping my laptop upside down hoping the liquor would drain out, I decided it would be in my best interest to put it in rice. Turned out I was wrong.
The rice took in the liquid and it got all starchy underneath the keys. I was never able to get my laptop back on.
Worst of all, my phone wasn’t set up to do trades at the time and my passwords were on my computer.
The next day, I bought a new laptop, restored it from a previous backup, and logged back in.
My trade had gone all the way up to make over $225,000.00 in profit, and then dropped back down and cashed out my position.
That means my call was right, but the timing wasn’t. Had I not spilled that drink, I would have a lot of money.
What Mistakes Were Made?
There were 3 major things that I did wrong:
Didn’t use a stop-loss, or take profit
Had a drink near my laptop
Used too high of leverage
No stop loss or take profit
Whenever you make a leveraged trade, you have to use a stop loss, and take profit.
A stop loss ensures that when your trade goes the wrong way, it cashes out at an earlier mark (of your choice) so that you don’t lose it all.
Whereas a take profit ensures it cashes out when it goes up and hit your desired target.
Had I used a stop loss, I wouldn’t have lost the full $25,000 I originally started with.
On top of that, had I used a take profit, I would have cashed out at the target I was aiming for (and hit) which would have resulted in earning over $225,000 in profit.
This was a fundamental (and beginner's) error that had I not made, everything would have been fine.
Had a drink near my laptop
This goes without saying… I shouldn’t have had a drink around a laptop.
If I wouldn’t have kept a drink near my laptop near, not to mention a drink in a martini glass, then I would still have my old laptop and a lot more money.
Since this moment, I stopped keeping drinks near laptops.
Used Too High Of Leverage
I became overconfident and greedy. Even though my call was right, I shouldn’t have been trading with that high of leverage.
It’s too risky, especially in crypto.
You need to either leave room for error or have a stop loss set so that if it does dip, you’re not too far off. Preferably both.
I had neither. Bad decision.
Conclusion
My greed, overconfidence and poor decisions while intoxicated led to me losing $225,000 in profit, $25,000 from my initial investment, and a laptop.
On top of that, it made me pretty upset for a few weeks.
It did teach me a few valuable lessons that I will never forget. Lessons that I should have already known, but didn’t.
That’s what happens when you get overconfident, the universe will slap you in the face.
I share this failure in hopes that you will not make the same mistake.
Thanks for reading,
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