The Night I Shorted INJ, I Lost All My Principal
At three in the morning, the blue glow of his phone lit up Xiaolin’s face. He stared at the candlestick chart, the corners of his mouth lifting slightly.
INJ had been falling for three straight days, dropping from twelve yuan all the way to 7.06. In the group chat, some people said Injective’s ecosystem was going nowhere; others said the whales were dumping. Xiaolin thought they were all right. He opened the futures trading screen. His finger hovered over the screen for three seconds before he finally tapped “Short.”
Fifty-times leverage. Cross margin.
He poured himself a glass of water and silently recited what the textbooks said: The trend is your friend. At seven yuan, a drop to six wasn’t out of the question. Neither was five. He’d already done the math: if the price fell by just two percent, he could make a whole month’s salary.
The price did keep falling. 7.05, 7.03, 7.01. Xiaolin’s heart began to race. The excitement of being on the verge of making money rose from his stomach. He opened the calculator. If INJ dropped to 6.50, he’d make 8,000 yuan on this trade. Eight thousand yuan—enough to cover three months of his Huabei payments.
Then the price stopped moving.
7.01, 7.02, 7.05. Xiaolin frowned and refreshed the page. 7.10. He told himself it was a normal bounce. Anyone who shorted knew that prices always bounced during a decline.
7.25.
He started to get restless. Messages kept popping up in the group chat. Someone said they were buying the dip; someone else said Injective had just secured new funding. Xiaolin’s palms began to sweat.
7.50.
His margin ratio had dropped from 80 percent to 45 percent. A yellow warning popped up on the screen, and he dismissed it. No, this couldn’t be happening. It had to fall back down. Gritting his teeth, he put his phone face down on the table and forced himself to go to sleep.
At seven the next morning, he woke to his alarm and a liquidation notification going off at the same time.
INJ had surged as high as 9.35. His position had been liquidated at 7.80. With fifty-times leverage, a 30 percent move against him had wiped out his entire margin.
He stared at the glaring zero in his account balance, his mind completely blank. Thirty-two thousand yuan—three months’ salary—was gone just like that. It hadn’t disappeared little by little. The market had swallowed it whole overnight while he slept.
He opened his trade history and looked at the short position: an entry price of 7.06 and a liquidation price of 7.80. The difference was less than one yuan. One yuan—a 10.5 percent price move—was the difference between life and death with fifty-times leverage.
Xiaolin turned off his phone and lay in bed for a long time. Sunlight streamed in through the window and fell across the ceiling, but the whole world felt dark to him.
Later, he learned one thing and wrote it on the first page of his notebook: Never bet on a direction using cross margin and high leverage. The market is always right, and you only get one shot with your principal.
After that day, Xiaolin never touched fifty-times leverage again. He slowly invested what was left of his savings, starting with 100 yuan and buying a little each month. Six months later, his account was back up to 20,000 yuan. It was still a long way from 32,000, but this time, every penny was money he had earned back himself.
He says he only does one thing now: never fight the market.
At three in the morning, the blue glow of his phone lit up Xiaolin’s face. He stared at the candlestick chart, the corners of his mouth lifting slightly.
INJ had been falling for three straight days, dropping from twelve yuan all the way to 7.06. In the group chat, some people said Injective’s ecosystem was going nowhere; others said the whales were dumping. Xiaolin thought they were all right. He opened the futures trading screen. His finger hovered over the screen for three seconds before he finally tapped “Short.”
Fifty-times leverage. Cross margin.
He poured himself a glass of water and silently recited what the textbooks said: The trend is your friend. At seven yuan, a drop to six wasn’t out of the question. Neither was five. He’d already done the math: if the price fell by just two percent, he could make a whole month’s salary.
The price did keep falling. 7.05, 7.03, 7.01. Xiaolin’s heart began to race. The excitement of being on the verge of making money rose from his stomach. He opened the calculator. If INJ dropped to 6.50, he’d make 8,000 yuan on this trade. Eight thousand yuan—enough to cover three months of his Huabei payments.
Then the price stopped moving.
7.01, 7.02, 7.05. Xiaolin frowned and refreshed the page. 7.10. He told himself it was a normal bounce. Anyone who shorted knew that prices always bounced during a decline.
7.25.
He started to get restless. Messages kept popping up in the group chat. Someone said they were buying the dip; someone else said Injective had just secured new funding. Xiaolin’s palms began to sweat.
7.50.
His margin ratio had dropped from 80 percent to 45 percent. A yellow warning popped up on the screen, and he dismissed it. No, this couldn’t be happening. It had to fall back down. Gritting his teeth, he put his phone face down on the table and forced himself to go to sleep.
At seven the next morning, he woke to his alarm and a liquidation notification going off at the same time.
INJ had surged as high as 9.35. His position had been liquidated at 7.80. With fifty-times leverage, a 30 percent move against him had wiped out his entire margin.
He stared at the glaring zero in his account balance, his mind completely blank. Thirty-two thousand yuan—three months’ salary—was gone just like that. It hadn’t disappeared little by little. The market had swallowed it whole overnight while he slept.
He opened his trade history and looked at the short position: an entry price of 7.06 and a liquidation price of 7.80. The difference was less than one yuan. One yuan—a 10.5 percent price move—was the difference between life and death with fifty-times leverage.
Xiaolin turned off his phone and lay in bed for a long time. Sunlight streamed in through the window and fell across the ceiling, but the whole world felt dark to him.
Later, he learned one thing and wrote it on the first page of his notebook: Never bet on a direction using cross margin and high leverage. The market is always right, and you only get one shot with your principal.
After that day, Xiaolin never touched fifty-times leverage again. He slowly invested what was left of his savings, starting with 100 yuan and buying a little each month. Six months later, his account was back up to 20,000 yuan. It was still a long way from 32,000, but this time, every penny was money he had earned back himself.
He says he only does one thing now: never fight the market.