CHAPTER 21

Risks, Regulation, Scams and Behaviour

Protecting yourself

Opening question

“How do I avoid losing everything?”

In this chapter

Why so many retail traders of leveraged FX and crypto products lose money
How leverage, margin and liquidation work, with a worked example
Gaps and cascades: when stop orders do not protect you
Counterparty and custody failures, from exchange collapses to lost keys
The main scams and their red flags
The behavioural traps that turn small losses into large ones
Position sizing and a personal risk budget
What regulation does and does not protect, including in Vietnam

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This chapter is in the full book

Chapter 1 is free to read online. The full text of chapter 21 — with its tables, figures, worked examples and practice lab — is available in the complete edition of Forex and Crypto Investing: From Theory to Practice (Volume 3, NXW Investment Library).

Read Chapter 1 free Get the full book — [email protected]

Sections of this chapter

21.1 How investors lose everything

21.2 Leverage, margin and liquidation

21.3 Gaps and cascades

21.4 Counterparty and custody failures

21.5 Scams and fraud

21.6 Behavioural traps

21.7 Position sizing and a personal risk budget

21.8 What regulation does — and does not — protect

21.9 A checklist before you invest

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