In order to multiply your gains without increasing your skill, high-leverage trading is frequently promoted as a quick route to financial success. However, the charts provided by LookOnChain present a different picture. With profits ranging from tens of millions to over 80 million, seven traders who appeared unstoppable were all destroyed by the same force: leverage.
Leverage-based trading experience
It is because it amplifies everything: your victories, your unsuccessfull trades, feelings from trading and a feeling of control. A trader is essentially placing a wager that they will always be correct in the near future when they use 50x or 100x leverage. Their entire position could be liquidated by a single minor price change, which is completely common in the cryptocurrency space. It turns analysis, trading, risk and portfolio management into a casino.
The reasoning is eerily reminiscent of gambling. Players persuade themselves that they have figured out the pattern in both. After winning a couple of rounds, they raise their wager and mistake luck for skill. It is the bait, not the issue, that causes the early wins. With every win, traders become more and more overconfident to the point where they are risking everything on borrowed funds.
Trading already shares the same psychological pitfalls as a casino even in the absence of leverage. Opportunity disguised as chance. Emotional highs that take over logic. Leverage transforms those human weaknesses into an explosive device, which is the only distinction.
How are they burned?
The traders on these charts were not novices. They were seasoned market players with millions on their accounts, who occasionally experienced exceptional success. However, leverage is unaffected by your skill level. Your previous victories do not matter to it. If you continue to risk borrowed money and play long enough, one black swan event will undo everything, according to mathematical certainty. In addition to increasing exposure, high-leverage trading ensures eventual disaster.
HyperLiquid and Binance are not the house here; they are not really losing or winning. Volatility is the greater enemy that turns profits into dust if you are not careful enough.