2% trading strategy, can this be applied for crypto trading?

[udidrone]

While browsing investopedia, I read about  2% rule where you will limit your loss to only 2% of your total capital. 

Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.

Any insight? Anyone using this strategy?

If the exchanger have stop loss limit, that strategy might be can applied. But if don't we wouldn't have time to only stay to look market or maybe some pump and dump happen instantly.

[Gozie51]

It looks effective but i am wondering how will that work. If i have $100 to invest then 2% would be $2. If i invest again the remaining $98 and i lost another 2% which is $1.96 then my remaining fund is $96.04. Well, not bad actually. It somehow save me $0.04 because if i let that 4% deducted to my $100 in one transaction, i lost $4 instead of $3.96 if i use the 2% rule. I confirmed that it will minimize the risk specially for those traders with big amount of money to trade.

The 2% rule is basically a money management strategy not to order a particular trade that will see our accounts in red whether big or small account.

2% rule would be good in using it up either on forex or stocks but those kind of stop losses wont really work anytime here on crypto yet price can swing into higher percentage which would really trigger that SL so easily.Even on having 10% would still be on danger.

Yes but sometimes we really should not feel bad when the stop-loss is logged out. What would have happened to our account if the SL was not there?

[criz2fer]

Any strategy can be use, just set a target before selling. Unlike in stock, crypto is very volatile and  you can  gain not only 2% but up to 200% as I have said, it would depend in your target selling.

[Bitcoinstein]

We as people, have different financial goals and experiencing different situations.
Some are looking for high risks, the others for stability.

Any plan - is a plan, it is not the right place to get a financial advise neither.
It all depends on you and your status. If you are looking to build long-term wealth or speculating on short-term earning.

In my personal opinion, the 2% rule is applied more for traditional markets, when volatility is low.

You've chosen to adopt a young technology, that it is still developed.
It is like your 5 years old son is making a mess and painting the walls, and you are willing to send him directly to a psycho-treatment.
Don't cut the wings so fast, maybe it will be an art 

[xuan87]

Well it depends on yourself, it can be a good strategy to put a 2% stop lost, for me it's not too suitable,the reason is because crypto got a high volatility the 2% of lost can be easily happen and the bounce back again,it maybe a good strategy for stock but for crypto maybe the stop lost is too near

[wahyu wida]

Any strategy can be use, just set a target before selling. Unlike in stock, crypto is very volatile and  you can  gain not only 2% but up to 200% as I have said, it would depend in your target selling.

2% is a realistic number to achieve. it does not make us greedy, and still have regular psychology. Every trader has a different trading style, so self discipline is the key to success

[Husecomang]

the 2% rule means you don't risk more than 2% of your account on any one trade. if you have $100k, you don't risk more than $2k at a time. it's definitely applicable to crypto. it's a basic risk management strategy that hedges against variance.

even if your trading system is profitable, you could have a run of bad trades. if you trade 20% of your account at a time, you could blow up your account and lose your shirt after only a handful of trades. the 2% rule allows you to survive an unlucky run, and live to trade another day.

How can it work when earning only 2%? how about fees? or in 2% you already clear up all fees involve in trading and it's 2% gross earning/loss per trading

the opposite approach is the "all in on every trade" method that's so popular with crypto traders.

I'm sometimes guilty on this with some altcoins. I just set limit, all in and boom. goodbye. next altcoins to trade please.

I can imagine a lot of people may have been in this scenario before getting to learn it is not always the right thing to do. I must say the rate at which people tend to want to look for quick means of earning always make them to always want to go all in on some potential trade.

2% is a normal rule and you can go above that depending on the level of risk you want to take yourself, but usually I tell people that even if you want to take so much risk, do not go more than 5% of your total capital on a single trade as that is high on its own.

Earning is a total different game and you are always going to have to set your own profit level based on certain things you are looking at in the market and that also depends on your pattern of trading as for instance, most day traders, making 2% on a specific trade can be good enough for them.

[ringgo96]

Any strategy can be use, just set a target before selling. Unlike in stock, crypto is very volatile and  you can  gain not only 2% but up to 200% as I have said, it would depend in your target selling.

2% is a realistic number to achieve. it does not make us greedy, and still have regular psychology. Every trader has a different trading style, so self discipline is the key to success

targeting 2% profit is actually easy to practice because indeed for now we can follow the many suggestions that are here as a preference for us to trade

[withlove99]

While browsing investopedia, I read about  2% rule where you will limit your loss to only 2% of your total capital. 

Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.

Any insight? Anyone using this strategy?

2% rule can be used in transactions cryptocurrency, It is a capital management method that helps us control the risk when trading.
The problem is that we must apply disciplined and flexible with all the methods that we know

[Fredomago]

Well it depends on yourself, it can be a good strategy to put a 2% stop lost, for me it's not too suitable,the reason is because crypto got a high volatility the 2% of lost can be easily happen and the bounce back again,it maybe a good strategy for stock but for crypto maybe the stop lost is too near

Same with my understanding and personal experience, 2% can be happen in a blink of an eye inside crypto market, you loses right away and bouncing back much stronger won't let you recover but gained regrets, I guess there's a strict needs of practices before we can stick with any strategy that we have
read, experience will allow us to be more flexible and always ready to change pace whenever things is not working according to our plans.

[spiker777]

2% is definitely a fair stop loss I would say, but in the world of crypto, you can expect to sell out on your stop loss very frequently, as 2% movement in a day is almost guaranteed, unlike the world of forex. When times are particularly haphazard you might want to increase this to 5% as +/- 5% in a day really isn't that unusual, especially for smaller volume coins.

[lordmick]

While browsing investopedia, I read about  2% rule where you will limit your loss to only 2% of your total capital. 

Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.

Any insight? Anyone using this strategy?

I think that this rule is more applicable to forex. However, in the market of cryptocurrencies, you can apply this rule by slightly changing it. For example, as a rule, I open a position for an amount not exceeding 5% of the total amount of the deposit and set the stop loss not more than 10% of the open position.

[jvdp]

Any strategy can be use, just set a target before selling. Unlike in stock, crypto is very volatile and  you can  gain not only 2% but up to 200% as I have said, it would depend in your target selling.

2% is a realistic number to achieve. it does not make us greedy, and still have regular psychology. Every trader has a different trading style, so self discipline is the key to success

If the percentage of the investment will be give less risk? How do you find the analysis in such way. If the investment amount is more than 30k in 2 percentage means will it be work correct.
However the lose is lose guys.

I do not think this strategy will work for long term and sometimes it goes correct.

[BitHodler]

Well it depends on yourself, it can be a good strategy to put a 2% stop lost, for me it's not too suitable,the reason is because crypto got a high volatility the 2% of lost can be easily happen and the bounce back again,it maybe a good strategy for stock but for crypto maybe the stop lost is too near

It does depend on the type of coin you plan to trade as well, but why not just have a more flexible range that you adjust based on the coin and the market situation? It grants you way more freedom to ride out waves.

Crypto forces you to be flexible, otherwise you'll be working against the market, and believe me, people burn themselves doing that. That being said, pot stocks are just as volatile in the more recent months.

It's insane how even the security triggers halting trading can't prevent the market to adjust itself to the craze happening there, which clearly points out that there is a lot hype related retail money involved there.

Imagine how many shorters have rekt themselves by shorting pot stocks during their prime days.

[milewilda]

Well it depends on yourself, it can be a good strategy to put a 2% stop lost, for me it's not too suitable,the reason is because crypto got a high volatility the 2% of lost can be easily happen and the bounce back again,it maybe a good strategy for stock but for crypto maybe the stop lost is too near

Same with my understanding and personal experience, 2% can be happen in a blink of an eye inside crypto market, you loses right away and bouncing back much stronger won't let you recover but gained regrets, I guess there's a strict needs of practices before we can stick with any strategy that we have
read, experience will allow us to be more flexible and always ready to change pace whenever things is not working according to our plans.

This is the difference on crypto which price can swing up into higher percentages which means 2% would really be easy to attain and if you do make use of that 2% rule then expect it would really be possibly can be hit anytime. 2% gains or loss can be easily achieved and this is the best thing about crypto where reward can really be more than into those traditional markets but come to think that risk is also doubled too and if you do plan to engage yourself into trade then you should be fully aware on this thing.

[waitforme]

While browsing investopedia, I read about  2% rule where you will limit your loss to only 2% of your total capital. 

Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.

Any insight? Anyone using this strategy?

the 2% rule means you don't risk more than 2% of your account on any one trade. if you have $100k, you don't risk more than $2k at a time. it's definitely applicable to crypto. it's a basic risk management strategy that hedges against variance.

even if your trading system is profitable, you could have a run of bad trades. if you trade 20% of your account at a time, you could blow up your account and lose your shirt after only a handful of trades. the 2% rule allows you to survive an unlucky run, and live to trade another day.

the opposite approach is the "all in on every trade" method that's so popular with crypto traders.

The 2% rule for large investments is a huge loss. This rule can only apply to small or not large amounts. Placing a low target with injuries will help reduce losses, but setting too high a target with profit will make the long-term migration time riskier.

[farosa]

They may have written as a recommendation, not as a rule. This rule should belong to the cryptocurrency. People who have no knowledge begin to trade without calculating the volatility and have no good results.

[Rexxxem]

Yes, this can be applied for crypto trading. There is some misunderstanding of the rule, usually. If you buy a coin without a stop loss (which is OK), then you risk 2%. If you open a position for 20% of your deposit and put a stop loss order on 10% this is the same rule. This doesn't mean that you use 2% of your capital, this means that you don't lose more than 2% on a trade

[The Scorpion]

 Little pig eats a lot, big pig gets eaten. This statement tells you the story of profits from our perspective. To be a profitable trader, you never fall for the hype or try to hit a homerun with one trade. You look for the small profits that will compound as you reinvest them.Even small profit like 1% daily (I get it, this is unreasonably high, but for crypto - 1% daily is very much achievable if your portfolio is diversified within the top few coins) can help you accumulate significant profits over months.

[fastrabbit]

Consistently making 1% daily, that is impossible, like I said, on some days you are better off just holding. But the next week when one of your coins get a 10-20% bump up, you'd have made up for the "boring" days.