Being a trader or an investor in cryptocurrency comes with risks. For instance, trading is not always a win-win process, there is loss, and the loss is too huge for traders or investors to accept the reality most of the time. Now, the moment a trader has lost a huge amount of money, traders say the person is “Rekt”. Rekt is simply from the word wrecked, it’s slang that traders use to show how he/she has lost a huge amount of finance at once.
Rekt is the word that is mostly used by traders, but what does it mean? We will be focusing on what rekt means. How investors determine if they are rekt.
What is Rekt?
Rekt, from the word wrecked simply implies that something is completely destroyed or an individual who has confronted failure. In the world of crypto or the financial world, it means to completely lose money during the trading session. It simply defines a person who has experienced the loss of his portfolio, and the loss has been determined by a poor investment plan.
Let us take this example, Rakitic is a trader who uses a Binance wallet to exercise his trading activity, if Rakitic by any chance opens his position and the market goes off in favor of his position, then Rakitic will be experiencing loss. If the loss is bigger than his initial investments, then he will be rekt. It defines individuals who have experienced more loss than their initial investment funds.
Moreover, Rekt does not only describe a person experiencing huge losses but also a market that is facing a downward momentum. In 2022, Bitcoin faced a crash, and the market faced a bearish momentum. At that moment Bitcoin was rekt, and the market lost value causing investors’ portfolios to be in jeopardy. A number of investors and traders during that period experienced the rekt moment.
Therefore, Rekt is simply the term used when the market is losing its value, when the market is experiencing a bearish flag, or moreover, when a person is experiencing an investment jeopardy.
Importance of Rekt in Crypto
Although no individuals like facing tragedy when trading or going losses while trading, there are numerous lessons that individuals later on learn. It is said that once bitten twice shy, therefore, by experiencing Rekt as an investor, your trading skills will automatically improve. What is the significance of Rekt to crypto traders?
Caution from traders
Rekt comes from investors who are careless when trading. A smart trader ensures to study the market and how the market is moving. Poor trading skills lead to financial jeopardy, a trader will incur a financial loss if he/she performs poorly while trading. Therefore, when investors and traders experience Rekt they understand the mistake that they have made and sharpen on that particular mistake. Investors and trader will be cautious while trading in the crypto market, it is a lesson that shows how investor that has poor trading decisions and unpredictable market movement leads to traders experiencing rekt.
How to Avoid Getting Rekt
There are numerous steps that individuals should maintain to avoid encountering rekt while trading crypto assets. The first is to get informed about the cryptocurrency market, get the latest developments about the cryptocurrency market, the latest news concerning the crypto market and high volatility information. This information will be acquired by individuals through subjecting to technical analysis of the market. Technical analysis needs traders to friendzone charts, news feeds and indicators. Developing such tools will aid traders in making wise decisions market.
Another step as a trader is developing risk management skills. For a trader to enhance their smooth trading journey, they should possess risk management skills. Risk management ensures that traders maximize profit and minimize losses. Risk management entails having realistic trading goals and utilizing stop loss to minimize losses. Moreover, traders should maintain high liquidity in their crypto wallet, this allows traders to exit the position if needed.
Lastly, traders should avoid trading while having emotional issues. While trading there are two emotions that investors should not have: greed and fear. Greed is the main cause of individuals losing their investments while fear ensures traders aren’t able to trade appropriately. It is important to be on your stable mind, especially during high volatility periods. By being in a stable mind, traders will not risk their investment which could lead to investment loss.
For a long time, the term rekt has been used by traders to express the loss they have encountered in the crypto market. Currently, different communities from trading and memes to gaming are using the phrase to express frustrations they have encountered from crypto exchanges and crypto trading platforms. Investors need to acknowledge that crypto is volatile and engaging in crypto trading needs individuals to understand the market. Therefore, by avoiding emotions, having risk management and getting market information traders can avoid encountering it.