Since Sept. 1, an anonymous ETH investor has lost more than $2 million in Ethernet trading. The data on the chain shows that September 2022.

Buy every high, sell every low

Lookonchain, a chain testing network resource, found that the "stupid money" trader spent $12.5 million on 7135 ETH after ETH rose 10 per cent to $1790 in September 2022. But subsequent adjustments drove the trader to sell all inventory at a price of $10.51 million.

In conclusion, the trader lost nearly $1.75 million. Interestingly, waiting and selling at today's price may result in a relatively small loss of $1.14 million.

The investor bought and sold again in February, when ETH prices rose by about 10 per cent. Data show that $7.65 million was invested in ETH on February 16, but it was sold eight hours later with a drop in ETH prices, resulting in a loss of another $324000.

Three financial management experiences worth learning

Traders can use such cases to learn from other people's mistakes and reduce their own business risks through tested countermeasures. Let's take a look at some of the most important ways to help reduce losses.

You can't just rely on one basic rule.

The investor first traded ETH's steady returns on Sept. 9. 12, just three days before the long-awaited conversion from the work unit certificate to the risk certificate according to the joint update.

However, this combination turned out to be a "selling news report" incident. Therefore, it is an awkward certainty to be extremely fond of the ether according to a strong fundamental.

In addition, doing your best while relying on an indicator, especially the widely expected hot news, is often an unsuccessful response, which is why traders need to consider several factors before making a decision.

For example, one such indicator is organizational cash flow. According to CoinShares Weekly, etheric equity funds suffered capital outflows worth $61.6 million in the week before the merger, suggesting that "smart assets" are focused on bullish.

Hedging with put options

In the process of etheric trading, stock index futures are used to realize hedging trading, so that investors can choose options contracts that are not forced to close their positions at this stage. Therefore, investors can reduce the risk by setting up put options contracts for rising spot transactions.

The put option gives the holder the right to sell the ETH at a certain time or at a previous booking price, but it is not a liability. Therefore, if the etheric price of the spot transaction falls, investors can sell the property at the price negotiated in advance, thus protecting themselves from losses in the sense of ETH.

Don't try your best; resist the trend.

You don't have to put all your raw eggs in one pocket, no matter how much you can invest.

Conversely, increasing positions is likely to be a safer response and keeps some equity funds hesitant. As a result, traders can buy ETH during short-and long-term bullish periods, but can free up some hidden downturns while relying on several performance indicators to report clues.

For example, momentum oscillators such as the relative strength Index (RSI) can reveal whether Ether is oversold or overbought within a certain time frame. Therefore, when the RSI reading is close to or more than 70, there is a very high probability that the game that becomes low and high will not succeed.

The following etheric stock market k chart shows the above two situations in which investors buy ETH together with RSI to produce relatively low highs.

Finally, traders' mistakes can be an opportunity to understand what makes sense for investors and what is bad for investors. The main conclusion is that investors should put into the market with a very clear plan according to their own analysis and stock investment risk.