If you want to earn from Crypto Market, you will need to have knowledge about both technical and fundamental analysis, but also how to manage your money.
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Let’s take a beginner trader with the deposit of $1000.
After finishing his market analysis, he will open his first trade taking approximately 30-50% of his deposit. He considers that the more money he puts now, the more he receives later. It is true, but if the price goes down, he will lose pretty much.
To reduce losses and not to take emotional decisions, you should realize what is Money Management.
If your deposit is $1000, you open the trade for $500 being sure that the price goes up, but it goes down, your $500 will become $400 (Loss of 20%). You can tell that there is a stop loss and be absolutely right. But you can have 10 unprofitable trades in a row and lose your deposit. Here you need Money Management.
1. Don’t use more than 2-3% of your deposit for your trade. If you are 100% sure in your decision, you can use max 5%.
2. Put stop losses. If you entered the trade with $100 (3% of the deposit) and put stop loss at 10%, your capital will be 90%, in case the forecast goes wrong.
3. Don’t let your emotions run away with you. You can have 10 unprofitable trades in a row and only 1 profitable. If you trade using 10% of your deposit, 10 unprofitable trades will be enough to lose the capital. Successful trader can have 10 unprofitable trades in a row, but 3-4 profitable ones can cover all losses.
4. Don’t be afraid to close trades at your own expense if you see the price not following your forecast. The earlier you cut the losses, the less you lose.
third is real good point. But 10 unprofitable and 3 profitable target covering loss? Could you let me know what exactly the three targets now which allows buyers covering so much?..
