Loss trading is where a trader experiences a loss in trading activity, usually due to an unfavorable difference between the buy and sell price of an asset. In the context of crypto, loss trading occurs when the selling price of a cryptocurrency is lower than the buying price, resulting in a financial loss for the trader.

In the world of trading, including crypto, the risk of loss is common. Trading losses can occur due to a variety of factors, such as high market volatility, incorrect trading decisions, or lack of adequate analysis. Traders usually try to minimize this risk by implementing risk management strategies such as stop-loss orders or portfolio diversification.

Loss trading can also be part of a long-term strategy for some traders. For example, traders may accept small losses on some transactions in the hope of making bigger profits in the future. However, consistent losses in the absence of good risk management can lead to significant losses, and even liquidation of the asset as a whole.