Dealing with challenges and obstacles in stock and crypto trading

Sudden price movements and liquidations

One of the first pitfalls investors encounter is the phenomenon of “wicks.” These are brief, sudden price spikes or drops that often last only a second. In the stock market, wicks mainly occur with volatile stocks, such as tech companies during earnings season, the period when firms release quarterly results and prices can move rapidly.

What often happens behind the scenes is a liquidation: algorithms and bots temporarily push the price up or down to automatically trigger certain positions, usually at the expense of smaller investors. The result? You see your stock spike for a moment, but before you know it, the price collapses again. This regularly happens with well-known tech companies, where a wick can quickly lead to a sharp correction. In the crypto world, this effect is often even more extreme. Think of a popular cryptocurrency during a bull run: a period of strong upward momentum, where a single wick can wipe out thousands of euros in seconds. Such sudden moves frequently cause liquidations and can catch investors off guard.

One user wrote online, for example: “Every crypto trader should know that trading on CEXes nowadays is rigged; you are trading against agents, scripts, and bots, and you let them always win by simply ‘trading’ on their platform.”

This example shows that trading on centralized exchanges (CEXes) can sometimes be influenced by automated scripts and bots, putting individual investors at a disadvantage. For both stock and crypto trading, this is an important warning: don’t blindly trust platform data and remain critical when choosing a broker or exchange. My advice is to use stop-losses cautiously, because a sudden wick can trigger your order while the market often recovers seconds later.

It is important to realize, however, that using bots is legal in itself and often contributes to a more efficient market by increasing liquidity and quickly correcting price discrepancies. For smaller traders, this can be disadvantageous because they cannot always compete with sophisticated algorithms.

Fortunately, we also see a growing trend toward decentralization: many decentralized exchanges (DEXes) aim for fairer trading conditions and offer more transparency. This not only levels the playing field but also stimulates innovation within the sector, for example by developing new protocols and ways to verify transactions without the intervention of a central party.

It’s also important to emphasize that none of this is usually a deliberate conspiracy. It is generally the result of complex market dynamics in which large investors and technology play a role. Markets generally try to be fair, but risks remain. Regulatory bodies such as the SEC in the U.S. continue to work on maintaining market integrity, although unexpected movements remain inherent to volatile markets.

Unreliable inventory data

Then there is the issue of inventories that are not always accurate. Yes, you read that right: the available shares or liquidity on a platform do not always match reality. This happens especially often in the crypto world. “Overall, available data on crypto-assets are neither complete nor fully reliable for the purposes of monitoring market trends to the degree of detail necessary to gauge their risks.” (European Central Bank, 2019)

Causes can include technical errors, delays in data updates, or platform limitations. Fortunately, many platforms are investing in greater transparency, contributing to a fairer trading environment. Still, brokers outside the EU often fail to comply adequately with regulations.

Another challenge in the crypto market is that the official supply of a cryptocurrency does not always reflect the actually available supply. Many, especially new, coins are illiquid, locked in wallets, or held at OTC desks, so the portion that can actually be traded is much smaller. This limited effective supply can create a sense of scarcity and volatility, causing prices to sometimes be higher than expected based on nominal supply.

A further complication is that figures change continuously. New coins are mined or burned, and transfers between wallets can cause the circulating supply to fluctuate rapidly. Due to a lack of transparency, strategic token releases, and differing measurement methods across platforms, inaccurate or misleading figures often appear.

All of this highlights the importance of careful research. Always verify information from multiple sources and make sure your broker is trustworthy before taking large positions. Never assume that a sudden increase in volume is accurate.

Trading halts during extreme volatility

Another challenge can arise during periods of high volatility, when trading volumes surge and prices swing wildly. In such conditions, buying or selling is not always possible, something that happens regularly in the crypto market. A few years ago, for example, investors wanted to take advantage of a strong rally in their portfolios, comparable to the 2017 crypto boom. Yet what happened? Many wallets and transfer functions at brokers were temporarily disabled due to “technical issues.” Tens of thousands of euros moved up and down while investors could do nothing. Buying sometimes still worked, but selling often did not. Remarkably, automatic sell orders did still execute, giving some the impression that systems are designed to slow retail investors down. Everything usually returned to normal only once the market had reached its peak.

This is a recurring pattern during volatile periods and shows how important it is not to depend entirely on a single platform.

While such situations can look suspicious, they are usually caused by system limitations under peak load, not by intent. Many platforms are now working on technical improvements to prevent these problems.

For policymakers, it is important to ensure robust infrastructure and clear regulation that encourage platforms to minimize downtime. This contributes to a fairer and more accessible market for all investors.

Orders that are not always filled

Another common problem is that orders are not always executed, even when you use a sell-limit option to sell automatically at a given price. This happens mainly during periods of high volatility, when bots or large traders can literally snatch your order away in front of your eyes.

A limit price basically means “sell only if this price is reached,” but in fast-moving markets it can feel like standing in a crowded shop where someone grabs the last item just ahead of you.

As described in an earlier blog (click here), this is related to how order books work and the speed of automated trading systems. You place a buy or sell order at a specific price level, yet it is not filled. In the stock market, you often see this with penny stocks or during flash crashes. In the crypto world, it is even more extreme. During hype phases, limit orders could be completely ignored because bots were faster.

The tip is to stay alert and check whether your order has actually been executed. If not, consider adjusting it or selling manually.

Dysfunctional systems and manual intervention

Sometimes it goes further. The price shoots straight through your limit, and your order is still not filled. Manual intervention can then work, but with brokers in countries with weak enforcement, think offshore platforms, you may be out of luck. Even a manual sell order can be ignored in such situations. You then get all kinds of error messages or, for example, the notice “not enough working volume,” indicating that insufficient inventory is available. This can be frustrating, especially at moments when you do want to act. It can feel as if you are unable to trade effectively at crucial times.

Example: the GameStop pump and dump (2021)

The GameStop (GME) frenzy in January 2021 is a classic example of a possible pump-and-dump scheme in which the share price was artificially inflated by coordinated purchases, often via platforms such as Reddit’s WallStreetBets, only to collapse afterward. Many hedge funds had taken short positions, betting on a decline, but retail investors drove the price above $480 per share. This led to a short squeeze, forcing short sellers to close their positions at high prices (Wikipedia, 2024). However, at the peak on 28 January 2021, several brokers blocked the ability to buy shares while selling remained possible. This meant many traders could neither expand nor exit their positions at the desired moment, leaving orders frozen. Critics called this market manipulation because it appeared to stop the pump and helped hedge funds limit their losses (Leonhardt, 2021). The price subsequently crashed by more than 60%, inflicting heavy losses on late entrants. This incident highlights how brokers and regulators can influence the market, often to the detriment of small investors.

The advice is to always choose regulated brokers, for example in the EU or the US, where investors enjoy greater protection. Regulation therefore plays a crucial role. It protects investors and ensures more transparency. Of course, not all offshore platforms are bad, but they often carry greater risks due to lighter oversight. International cooperation among regulators is therefore essential, such as through the EU’s MiFID II directive, which provides better protection and contributes to a more stable and fairer global market regardless of an investor’s location.

Price limits as a stumbling block

Price limits can also trip you up. Sometimes you cannot place a sell order that is more than roughly 20% above the current price. This is common with stocks and cryptocurrencies from emerging markets, where brokers set the limits strictly. These rules are intended to prevent excessive speculation and keep the market stable, ultimately reducing risk for all participants.

Always check the current price and the order book before you place an order. If you run into these limits often, it may be wise to switch to a broker with more flexible rules so you can seize more profit opportunities. In the crypto market, something similar happens with altcoins, where strict limits can block sales at peak moments. The order book, which is a list of buy and sell offers, determines how easily you can trade, so choose platforms that offer greater flexibility.

Unexpected sell-offs

Another issue is sell-offs. Orders are executed even though you never set limits. Yes, you read that correctly. Sometimes the system automatically sells your shares, often because of margin calls or technical glitches.

Glitches are technical errors that can happen to anyone, whereas margin calls are automatic rules designed to protect investors from running up debt. It is therefore important to learn risk management to prevent unexpected losses. In addition, always read reviews before parking large amounts. Sites such as Trustpilot or Reddit can be very valuable here. Many platforms also offer educational tools to help investors understand these mechanisms, contributing to a safer trading environment.

Large liquidations during crypto crashes

An example? During the 2022 crash, especially the collapse of the FTX exchange in November, many users saw their holdings liquidated without warning, even without active limits or margin calls (CoinGlass, 2025; Chavez-Dreyfuss, 2025). This was often due to excessive leverage in derivatives markets, where positions were automatically closed as soon as the underlying value fell, leading to a cascade of forced sales. For instance, during the FTX crisis, about $1.6 billion in positions were liquidated in a short period, while users reported that platforms responded slowly or failed to execute orders, resulting in significant losses for retail investors (Global Desk, 2025; Napolitano, 2025).

Then there is another case. During the Terra/Luna crash in May 2022, stablecoins such as TerraUSD lost their peg to the dollar, leading to billions in liquidations without users being able to intervene in time (Feeder, 2025). This highlights the risks of high leverage and lack of transparency in the crypto market and underlines the importance of better regulation to protect investors. It also shows how macroeconomic factors, such as rising interest rates, can contribute to market instability (Gagnon & Sack, 2023).

Limitations with crypto wallets

From within a crypto wallet, it is not always possible to move your coins online immediately. For example, wallets may be temporarily offline for maintenance. This maintenance is necessary to keep systems secure and is therefore not a malicious act by the provider, but something you need to account for. These interruptions are often scheduled to improve cybersecurity and thus protect the entire community, contributing to a safer digital landscape.

Such maintenance windows can coincide with peak hours or important system updates, making it temporarily impossible to transfer crypto to an exchange. Similar situations sometimes occur with brokerage accounts in the stock market, but in the crypto world, the consequences can be more extreme because of high volatility and rapid market moves.

The advice is therefore to always have a backup plan, for example by using multiple wallets or accounts at different exchanges, and to keep a close eye on scheduled maintenance to avoid surprises. This way, you can act quickly and prevent being stuck during an important market move or unexpected price swing.

Security risks of hardware wallets

Using offline hardware wallets for crypto also carries risks, so keep this in mind when trading crypto. An offline hardware wallet works like a safe. The safe itself is strong, but if someone steals your key code through a fake message, they can still gain access.

Ledger 2020: data breach and phishing risks

In 2020, for example, Ledger, a well-known and widely used hardware-wallet manufacturer, suffered a data breach in which the personal data of roughly one million customers were leaked, including names, e-mail addresses, phone numbers and, in some cases, physical addresses (Ledger, 2020; Grover, 2021). The hardware devices themselves were not compromised and no funds were stolen directly. The leak did, however, trigger a wave of phishing attacks and scams. Many users received fake e-mails and even counterfeit hardware wallets by post, designed to trick victims into entering their seed phrase, the 24 words that grant access to their crypto, allowing hackers to steal funds afterward (Grover, 2021). Others received e-mails urging them to install malicious software or to enter their seed phrase on fake Ledger Live apps. Once the device was connected to a PC, the malware activated transactions and transferred funds without the user noticing (Cluley, 2020). Reddit users reported losing funds after installing an “update,” leading to unauthorized transactions (u/ledgerwallet, 2020). Ledger itself stresses that no funds were stolen from the hardware; losses occurred only through user error, such as sharing seed phrases (Ledger, 2023).

Availability of new coins

New cryptocurrencies are sometimes available on international platforms but not for example on European versions. Regional regulation might then restrict access for European users. A similar example in the stock market is certain IPOs that are not available everywhere. For European investors this can mean missing opportunities that are accessible elsewhere.

Always check whether the coin you want is actually listed on your platform and whether that platform complies with the rules of the country in which you live. If it does not, buying the coin can be risky, because rules can change suddenly or restrictions can be imposed, leaving your investments temporarily or permanently blocked.

Regional availability and geopolitical influences

Geopolitical developments, international conflicts, trade agreements or political decisions, can have major consequences for your stock and crypto investments. Imagine your money being frozen because a country is suddenly sanctioned or trade is restricted. This often happens without warning and can hit your portfolio hard.

A clear example is Russian stocks after the 2022 invasion of Ukraine. Many investors could no longer sell their positions or withdraw money because international sanctions froze trading altogether. Some brokers even closed accounts without notice. To this day, people are still waiting to get their money back.

Russia is not the only case. Think of the U.S.–China trade war a few years ago. Import tariffs were raised, causing technology stocks and commodities to swing sharply. Many traders lost money because they could not react quickly enough.

Similar risks exist in crypto. Governments can suddenly introduce new rules. In 2021 China banned Bitcoin mining, causing the Bitcoin price to drop sharply. Stablecoins, digital coins pegged to currencies such as the dollar, can also be affected by policy decisions. If a country raises interest rates to fight inflation, it can put pressure on stablecoin values and even lead to broader economic instability.

Governments sometimes intervene actively. In El Salvador, Bitcoin is now for example legal tender, while countries such as India threaten strict rules that restrict trading. Governments can even shut entire markets, leaving investors unable to access their money for a time.

Practical example

Another example shows how geopolitical factors can limit financial activities. Recently, a French judge was nearly completely cut off from the banking system. Major payment systems like American Express, Visa, and Mastercard, widely used in Europe, were blocked for him. His accounts at non-U.S. banks were partially closed, and he was prohibited from making payments in U.S. dollars or using dollar conversions (Krause, 2025).

Even cryptocurrency accounts can be blocked if the platform operates in the country of a party that wants to restrict access. So, when working with sensitive financial matters, it is wise to use multiple platforms across different countries and keep an offline crypto wallet.

Ban on short selling and/or trading

Another example is short selling, selling borrowed shares in the hope of buying them back more cheaply later. Short selling is normally allowed but can be temporarily banned in times of crisis. After the “flash crash” of 6 May 2010, when U.S. markets fell almost 9% within minutes due to automated trading, the SEC introduced measures such as circuit breakers and reintroduced the uptick rule to prevent panic (Kirilenko et al., 2017). These rules are meant to stop massive panic sales and safeguard long-term stability.

During the coronavirus pandemic we saw similar measures. China temporarily banned short selling to prevent extreme swings. Europe also imposed temporary bans, for example during the euro crisis in 2011 and the COVID crisis in 2020. “During the Covid‐19 crisis, six European countries introduced a short‐selling ban, whereas others avoided restrictions.” (Beber & Pagano, 2013; Bessler & Vendrasco, 2022; Fohlin et al., 2022).

Strategic choices over news headlines

It is crucial not to rely only on news headlines, but to watch where the big money is moving. The U.S. government is currently the second-largest Bitcoin holder in the world, with about 198,012 BTC (roughly $18.3 billion in April 2025). This shows that the United States takes crypto seriously and integrates it into its economic strategy, despite earlier criticism from politicians and banks labelling Bitcoin “risky” or “speculative.” In March 2025 President Trump even established a Strategic Bitcoin Reserve, treating Bitcoin as a strategic reserve asset comparable to gold. This demonstrates that governments do not only want to regulate crypto but also actively include it in their economic policy.

So in short: anyone who follows geopolitics and economic trends closely can assess risks better and react faster. Follow reliable sources on economics, politics and decisions by major players such as the EU and the U.S. Watch how they deal with crypto, interest rates and trade. This will help you protect your portfolio from unexpected blows. Knowledge is power in the world of trading and investing. More information: read my previous blog on this topic.

Risks of stablecoins

If you invest in crypto, you need to know that the value of stablecoins can fluctuate. This means you will not always receive the amount shown in your account. For example: suppose you have €1,300 in USDT, but after a few days you see only 1,250 USDT in your portfolio even though you have not traded anything. This happens because the stablecoin’s value has dropped relative to the dollar. In other words, you can lose money simply by parking cash at a broker.

Similar situations occur with fiat currencies. Imagine converting euros to dollars to buy or invest in something in the U.S. If you decide to convert back to euros a week later, the exchange rate may have moved in the meantime, so you receive, say, 10 % fewer euros than you originally exchanged. In other words, you can lose money even just by keeping cash in your broker account.

In crypto trading a stablecoin can also suddenly become almost untradeable, leaving you unable to withdraw or transfer your money because brokers (temporarily) no longer accept it. This can leave your funds stuck, temporarily or even permanently, so you can effectively lose them. It is therefore essential to keep track of stablecoin legislation and any announcements from brokers. If necessary, convert your balances in time to another cryptocurrency that is available on several exchanges.

Although this risk also exists with stocks denominated in volatile currencies, it is larger in crypto because of possible “peg breaks.” Stablecoins such as USDT or USDC are normally designed to keep a stable value by being pegged to the dollar, but if they are not sufficiently backed by reserves or if too many are issued, they can contribute to inflation inside the crypto economy and push up prices of related assets. An example occurred in 2022, when certain stablecoins, during periods of high issuance without adequate backing, affected the broader crypto economy in a way comparable to fiat inflation (CoinBureau, 2023).

Example: An investor had a large amount of crypto stored with a broker. When European regulations changed, that broker was no longer allowed to operate in many European countries. The investor had to convert almost all of his crypto to DAI, because it was the only stablecoin that could still be traded at that time. Shortly after, DAI was also banned under the same rules and completely delisted everywhere. As a result, the investor still had DAI in his account but could no longer transfer or withdraw it, effectively losing everything.

This example shows how important it is to do your homework and monitor the rules. Brokers usually announce their exit from a country at least a week in advance, so acting in time can prevent large losses.

Watch out for hidden broker costs

Also note that interim changes at brokers can significantly affect your profits. For example, some investors noticed in 2025 that their broker first charged €50 per €1,000 withdrawal for mandatory currency conversion from the broker’s own funds to their bank. A month later the tariff was suddenly changed: on top of the original €50, an extra €15 fee was now charged both when buying and when selling crypto. In addition, there were spreads of 3–4 % between buy and sell prices.

If you also trade with leverage, overnight and weekend fees can be added. These costs stack up quickly, especially in crypto, but also with leveraged stocks, and can significantly reduce your gains. So always check your broker’s fee structure regularly to avoid nasty surprises.

Home-screen prices versus order books: watch the gaps

It is important to understand that the prices shown by brokers do not always fully reflect the real prices in the market. One crypto investor shared his experience: “I wanted to sell a coin with some profit and later buy it back after a price drop. On the home screen the current price was 0.73, but in the order book the buy price was 0.60 and the sell price I could get was only 0.53, maybe 0.60 at best. If I had sold then, I would have been 18% below the price shown on the home screen. In other words, the home screen did not match the order books at all…”

This example shows that home-screen quotes and order books often diverge, leading to sales at lower prices. This problem is not limited to crypto, it also occurs in stock markets with order books.

Therefore, always check both the home screen and the order book before executing a transaction, so that you have a better picture of the actual market prices. If necessary, wait with your order until prices stabilize and match the market prices visible on multiple brokers.

Additional tips and advice for capital protection

Creating diversity in your portfolio

It is important to create diversity in your portfolio, as previously indicated. Preferably do this with cash, because cash can quickly lose value due to inflation or currency fluctuations. With stocks this means spreading across different sectors, such as technology, energy and healthcare, to limit risks. In crypto you can diversify by investing in different coins.

A good example is the inflation peak of 2022. Cash quickly lost purchasing power due to rising prices, while a well-diversified stock portfolio, including technology companies, energy stocks and pharmaceutical companies, remained relatively stable. Sectors such as renewable energy and medical technology also showed growth potential in many cases despite economic uncertainty. Therefore limit cash to what you need for direct trades and daily expenses, and invest the rest in assets with a good risk-return profile and long-term growth potential.

Also regularly check the fee structures of your broker and be alert to interim changes to prevent unexpected costs and loss of profit. Also always check home screen and order book before you always place an order, and wait if necessary until prices stabilize and match the market on multiple brokers.

Such a strategy helps spread risks and forms a sensible basic approach for anyone who wants to manage their investments smartly, even though it offers no guarantee of profit.

Always spread money across multiple brokers

Another important strategy to limit risks is to spread your money across at least five different brokers, especially with crypto. This reduces the chance that a problem with one broker will affect your entire portfolio. For stocks you can do the same by dividing positions across multiple platforms. In the crypto world this is extra important due to high volatility: investors sometimes notice that a failure at one exchange can block funds, while other platforms remain operational. By spreading you can quickly switch in case of issues such as maintenance or hacks, which can occur especially in the crypto market. This diversification strategy is a standard practice recommended worldwide by financial experts and increases resilience, without implying that a specific platform is inherently unreliable.

The importance of technical analysis

Many people ignore technical analysis, but with experience it can help to somewhat estimate price movements of stocks or crypto. Success is however never guaranteed. For example, a strong rise in the premarket can completely disappear at the normal opening, making analyses during regular market hours misleading.

It is therefore important to view multiple charts, for example via tools such as TradingView, so that you can include both premarket and regular market data. This gives a more complete picture of price movements and helps to make better informed decisions. Especially with well-known tech companies and popular cryptocurrencies you often see premarket spikes that disappear at opening, which can easily be overlooked without multiple charts.

Technical analysis is further only a tool. Always combine it with fundamental analysis to get a balanced perspective and a sensible strategy. So always look at deeper data and take into account underlying geopolitical developments, because these can temporarily have a major influence on volatility in the market. Read my previous blog for more information about technical analyses.

And as previously pointed out, also do not automatically assume for example that a volume increase is always correct. Always check multiple sources and make sure your broker is reliable before taking large positions. In addition, glitches and margin calls can hit anyone, therefore it is essential to master risk management well and thoroughly research reviews of a broker before you start trading.
Further, as previously pointed out, changes in brokers’ cost structures, such as withdrawal fees, extra fees, margins and leverage costs can significantly reduce your profits, so always check these carefully.

Checking multiple charts

It is crucial to always check multiple charts of the same stocks or crypto and not to base yourself only on the data from the broker where your money is, especially if you apply technical analysis (TA). Technical analysis works with patterns, trends and price points, and incorrect data can lead to wrong signals and bad decisions.

An example: in November 2025 many investors saw that certain cryptocurrencies on some brokers suddenly dropped more than 70%, while this movement was not visible on the majority of brokers. In the financial world such sudden peaks or drops are called “wicks”. Although a single broker may show extreme movements, the real market trend is often visible in the total market cap of the crypto, where such wicks remain normally visible. This concretely means that data on one chart does not always give a complete picture of the market.

For technical analysis (TA) this is extra important, because TA is based on patterns such as support and resistance levels, moving averages and candlestick patterns. If you follow only one broker, these levels may appear incorrect due to temporary deviations or data problems, causing you to choose wrong entry or exit points.

Such differences often arise due to time differences between brokers, different datafeeds or latency, and not always due to intent. More recent initiatives everywhere such as blockchain transparency help to reduce these inconsistencies, which increases the reliability of analyses and benefits all market participants.

Want to learn more about technical analysis? Then view my previously posted blog about it here.

Cancelled orders and unexpected losses

On some blogs online we can read for example experiences of users: “I put order to sell, then I cancelled after a few days. Then after a week, when the price dropped, they executed my old order at the price I set…”

This shows that cancelled orders are sometimes still executed when prices drop, without clear explanation from the broker. This can occur with both stocks and crypto and can lead to unexpected losses. If you encounter such situations, always contact your broker’s customer service. Often it is a technical glitch and platforms offer support to solve such problems.

Conclusion

The stock and crypto markets offer many opportunities, but also risks. Stay alert, compare multiple brokers and check reviews to prevent problems. Key lessons:

• Transactions and orders can sometimes be blocked, with crypto, large losses can occur even without leverage.
• Cryptocurrency wallets can become temporarily or permanently inaccessible, especially during major market movements. This can be due to alleged hacks, broker bankruptcies, or regional restrictions and legal changes.
• Price levels such as tops and bottoms can differ strongly between platforms, sometimes by as much as 50%. Therefore check multiple charts from different brokers before making a decision.

Here is a clear summary of everything covered in this blog:

And remember: always stay cautious and study the subject carefully, especially when dealing with large amounts of money. Only invest what you can afford to lose, as this is widely regarded as the most reliable and important piece of advice.

Have you had similar experiences? Share them in the comments!

If desired, also read another blog (click here) in which the different (invisible) layers of financial markets are explained more extensively.

This article is based on personal experiences, general observations, and research. Investing always involves risks, so make sure to do your own thorough research before making any decisions.

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