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Author Topic: Defining Risk  (Read 332 times)
digitalc
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November 13, 2018, 05:53:16 PM
 #1

I find it confusing defining risk in fiat when looking to place a trade due to the numerous exchange rates. Does anybody use a spreadsheet which does all the calculations for them upon entering price, stop loss and desired risk in fiat?

If yes, would you be willing to share the spreadsheet which you use?
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November 13, 2018, 06:17:30 PM
 #2

I think you the one who understands your risk appetite, you know how much you want to shake and I guess you also have to adjust your risk in stop loss by yourself, except there is an app that does it automatically... Well, yet to be aware of that.

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November 13, 2018, 06:30:12 PM
 #3

Yes, I understand my risk appetite in fiat, but what I find confusing is calculating that risk appetite in figures pertaining to cryptocurrency prices.
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November 13, 2018, 06:43:32 PM
 #4

Spreadsheets not necessarily, you just have to know the general performance of that coin you interested in...if possible dig up it's ico price and all its related data so that it guides you were to set your stop loss orders and the buy orders. Sometimes speculation overwhelms these rules and you just have to follow the wave.


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November 13, 2018, 06:47:06 PM
Merited by dunfida (1), eminemcookie (1)
 #5

I find it confusing defining risk in fiat when looking to place a trade due to the numerous exchange rates. Does anybody use a spreadsheet which does all the calculations for them upon entering price, stop loss and desired risk in fiat?

If yes, would you be willing to share the spreadsheet which you use?
Such calculations are just being created solely by individuals who do involve their-selves into trading which we known that each person do have different
risk management yet we do have different amount of money that we can put on each trade order basing on our entire trading wallet balance.

Lets talk about my own risk:reward ratio example. Im not really fan of using up stoploss because it do leaves me hanging on negative when the market is way too volatile
unless if i do make shorts where scalping out a few profits gradually then this tool will be effective.Just an example you set out 10% stop loss on an order and you have used
up 3% of your capital lets say you have $1000 each trade cost up $30.


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November 13, 2018, 07:26:38 PM
 #6

As stomach said, everyone has their own way of defining risk. You need to ascertain your own risk criteria and also understand how different coins have different levels of inherent risk. From there you can work out a calculation similarly to how he did it. I personally don't aim to risk more than 5% of my entire holdings at any one time.

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November 13, 2018, 07:38:18 PM
 #7

Perhaps an example

Say I think DASH is likely to go up from a current price of 0.02519, but if I'm wrong I want to bail at 0.0249, with a view to selling the trade at 0.0259 if I'm right.

So my stop loss is to be set at 0.0249 and lets say I'm comfortable risking $100. What quantity would I buy at 0.02519 and stop at 0.0249 for that risk to equal $100?
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November 13, 2018, 10:26:49 PM
 #8

determining such risks is indeed very confusing and I also use spreadsheets and it's a bit very profitable, but here I don't want to share my spreadsheets.
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November 14, 2018, 04:59:47 AM
 #9

I find it confusing defining risk in fiat when looking to place a trade due to the numerous exchange rates. Does anybody use a spreadsheet which does all the calculations for them upon entering price, stop loss and desired risk in fiat?

If yes, would you be willing to share the spreadsheet which you use?
We have our own strategies and I don't think. Professionals will just keep their knowledge and use their strategies to make money. I mean, if you want to learn strategies in trading then you must pay first before they give their copies of spreadsheets or share their knowledge.
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November 14, 2018, 11:20:13 AM
 #10

I find it confusing defining risk in fiat when looking to place a trade due to the numerous exchange rates. Does anybody use a spreadsheet which does all the calculations for them upon entering price, stop loss and desired risk in fiat?

If yes, would you be willing to share the spreadsheet which you use?

 I do use a spreadsheet for all of my tradings and I could see how I do for my tradings and finding all of my mistakes and trying to avoid it and do better for the next time.
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November 14, 2018, 01:19:53 PM
 #11

We won't get anywhere in life without taking some risks.  Some risks have a bigger downside than others but in the crypto world the risk can be enormous.  A lot of coins have dropped over 90% any may never recover to their previous highs.  I'm well suited for this anyways, we all die in the end so we might as well roll the dice and try to strike it big.




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November 14, 2018, 01:34:16 PM
Merited by cizatext (2)
 #12

determining such risks is indeed very confusing and I also use spreadsheets and it's a bit very profitable, but here I don't want to share my spreadsheets.
I don't think anybody will like to share their trading strategies with us and how there manage they risk in trading.  I believe that many of us need to define our risk and how to manage it in trading.  I make my, simple to understand and that is, I will never invest more than I can afford to lose so my reward is not always much and if I lose the loses is always very minimal.



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November 14, 2018, 02:39:50 PM
 #13

Risk management is something an individual should assess themselves and should not be asked from anyone since every one of us have our own risk tolerance. Personally, I just check a coin, see its performance in a 3-month period and decide what portion of my capital would I allocate. Moreover, performance of the coin in the market alone isn't enough; I should also know the state of its community and whether or not there are active developments going on within the coin or it's an abandoned project. Knowing all these, you will have less time to worry about figures since it will come naturally once you know the state of an asset you're going to put your money to.

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November 14, 2018, 04:02:04 PM
 #14

I find it confusing defining risk in fiat when looking to place a trade due to the numerous exchange rates. Does anybody use a spreadsheet which does all the calculations for them upon entering price, stop loss and desired risk in fiat?

If yes, would you be willing to share the spreadsheet which you use?

Risk will always be a part of it dude,. Now if will become neglectful there's a tendency you will face a higher risk. But if you will become careful about it, I think you can minimize your risk as well. I know time will come if you will explore yourself here more, for sure in the end when you play in the market you will learn a lot of things in it. You can make your own methods when you do trade in the platform.

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November 14, 2018, 04:08:00 PM
 #15

We won't get anywhere in life without taking some risks.  Some risks have a bigger downside than others but in the crypto world the risk can be enormous.  A lot of coins have dropped over 90% any may never recover to their previous highs.  I'm well suited for this anyways, we all die in the end so we might as well roll the dice and try to strike it big.
Risks are those things that you may experience difficulties but these are also the things that you can learn a lot from which you can apply to another happening in you're life with similarity to it. Taking risk doesn't mean putting yourself in danger, it is teaching yourself to be braver enough in facing anything which you aim to have. And as you take it, even if you fail while taking a risk, yes you have failed it but you have learned from it.

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November 14, 2018, 04:12:11 PM
 #16

Risk is nothing it is just threat whether you are into crypto market or any other investment schemes. There is an advantage of taking risk if you take risk than there will be probability to earn money or loss money. Risk is just a probability of having good results.

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November 14, 2018, 08:21:28 PM
 #17

Perhaps an example

Say I think DASH is likely to go up from a current price of 0.02519, but if I'm wrong I want to bail at 0.0249, with a view to selling the trade at 0.0259 if I'm right.

So my stop loss is to be set at 0.0249 and lets say I'm comfortable risking $100. What quantity would I buy at 0.02519 and stop at 0.0249 for that risk to equal $100?

Okay, so first step normalize what currency you're spending/thinking about. So let's make 0.02519 = 151.14 (I used $6000 for bitcoin price for simplicity) and the same for 0.0259 = 155.4 and 0.0249 = 149.4.

So: Price = 151.14, stop loss equals 149.4 and target sell price =155.4

Subtract the price from the stop loss price -  151.14 - 149.4= 1.74

Then divide that by the original price to get the percentage loss in decimal form (if your stop loss is hit) 1.74/151.14 = 0.0115 (rounded to 3 decimal places) or about 1.15%

Now the last stop is dividing your desired risked amount $100 by 0.0115-     100/0.0115=8695

So you could invest $8695 dollars, or 1.45 btc (if price was $6k)

If you also work out the upside, that is when the price hits the sell price of 155.4 dollars, you'd make $4.24 which is a 2.8% profit (0.028 in decimals).

Dividing 0.015/0.028 you get 0.53. Which means that the price would have to hit the sell price 53% of the time for you to make a profit in the long run.

I hope all that helps.

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digitalc
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November 15, 2018, 04:47:31 PM
 #18

Perhaps an example

Say I think DASH is likely to go up from a current price of 0.02519, but if I'm wrong I want to bail at 0.0249, with a view to selling the trade at 0.0259 if I'm right.

So my stop loss is to be set at 0.0249 and lets say I'm comfortable risking $100. What quantity would I buy at 0.02519 and stop at 0.0249 for that risk to equal $100?

Okay, so first step normalize what currency you're spending/thinking about. So let's make 0.02519 = 151.14 (I used $6000 for bitcoin price for simplicity) and the same for 0.0259 = 155.4 and 0.0249 = 149.4.

So: Price = 151.14, stop loss equals 149.4 and target sell price =155.4

Subtract the price from the stop loss price -  151.14 - 149.4= 1.74

Then divide that by the original price to get the percentage loss in decimal form (if your stop loss is hit) 1.74/151.14 = 0.0115 (rounded to 3 decimal places) or about 1.15%

Now the last stop is dividing your desired risked amount $100 by 0.0115-     100/0.0115=8695

So you could invest $8695 dollars, or 1.45 btc (if price was $6k)

If you also work out the upside, that is when the price hits the sell price of 155.4 dollars, you'd make $4.24 which is a 2.8% profit (0.028 in decimals).

Dividing 0.015/0.028 you get 0.53. Which means that the price would have to hit the sell price 53% of the time for you to make a profit in the long run.

I hope all that helps.


This notion of "normalising" i was missing. Im out at the moment but will be playing around with that in the spreadsheet next time i get chance. Thank you for taking the time.
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November 15, 2018, 08:09:05 PM
 #19


This notion of "normalising" i was missing. Im out at the moment but will be playing around with that in the spreadsheet next time i get chance. Thank you for taking the time.

Yep, that's pretty key to making things a lot more simple, you can do it at any point but it's always easiest at the beginning to save any confusion.

You're welcome, let me know if you need anything to be clarified. I think I got just about everything and it should be easy to grasp but of course that's from my own perspective  Cheesy

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November 15, 2018, 11:14:51 PM
 #20

I find it confusing defining risk in fiat when looking to place a trade due to the numerous exchange rates. Does anybody use a spreadsheet which does all the calculations for them upon entering price, stop loss and desired risk in fiat?

If yes, would you be willing to share the spreadsheet which you use?
There were platforms available you could use to compare the price of each coins from major exchanges. This allows you to even get profit and remove all the potential losses. Try to check out Bitsgap, its a new platform offered for free. Try it while its free of subscription, they will apply fee next year after seeing good development. After trading be reminded not to store or hold your funds in exchanges for longer time, it would be better if you'll transfer it to your main account. I recommend you to choose an open source wallet like Hodler wallet which is the only opensorce multiasset wallet available.
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