Elon Musk, the “Dogefather,” just cosigned a tweet warning Dogecoin holders about the perils of margin trading.
While there is a lot of profit to be gained when a trade goes correctly, the loss may be devastating when a trade goes awry. This trading approach is normally utilized by experienced traders.
This is what caused a Dogecoin holder and enthusiast to give a caution to the community against margin trading.
Due to massive losses caused by leveraged Dogecoin trading, some Dogecoin holders have gone to Twitter to voice their concerns.
As a response, Mishaboar, a well-known Dogecoin community member, came to the platform to warn traders about the hazards associated with this type of trading.
With leveraged trading, exercise caution
Mishaboar said on Twitter that he’d gotten a lot of messages from Dogecoin holders about their trades. These traders’ margin accounts had been liquidated, and they had lost money on high-risk trading.
A lot of these traders, according to Mishaboar, were rookies who had no idea how the market operated and were trading on the advice of friends.
Furthermore, Mishaboar highlighted later in the Twitter thread that many novice investors assume they need to employ methods like leveraged Dogecoin trading to thrive in the market when they don’t.
Because the majority of these investors are new to the market, they are unaware of the risks connected with margin trading.
Some rookie investors may not grasp market dynamics that cause their positions to be liquidated, resulting in significant losses.
Musk backs Mishaboar’s message
Mishaboar didn’t stop there. They also stated that even seasoned traders may not be as skilled as they think.
Despite having greater liquidity and experience than the ordinary trader, these investors face off against institutional investors with far more resources and data than individual traders.
The Dogecoin enthusiasts warned that using these methods in traditional markets can be risky. With the unregulated and unpredictable crypto market, the risks of margin trading skyrocket. In general, the house wins.
A well-known meme coin celebrity, Musk went to the platform to issue caution. Musk had approved Mishaboar’s Twitter thread by writing “Good thread”.
Image courtesy of Cointelegraph News/YouTube