How do you define Risk Management with trading cryptocurrency?

[clover12]

I hear this term over and over again, "Risk Management" and how important it is for keeping our ducks in a row.  For us newbies that are trading a few coins here and there, what are some ways to really beef up our risk management?

[Coyster]

There are many risk management techniques that can be applicable when trading,but in my opinion,the most effective and easiest to implement is investing with a little amount of money,as a beginner in trading,always invest with your spare/little money you know you really can afford to lose,as trading is unpredictable and anything is possible

[butka]

Here are my risk management rules:

1. At each trade I trade 2% maximum of my entire account.
2. Always trade with a stop loss. My stop loss in based on the actual value of the ATR indicator. I don't use support or resistance lines to define my stop loss.
3. Take profit as soon as my initial goal is hit (take like 50 percent of my position) and leave the rest to go wherever it goes.

That's it. Very simple and always set in stone. No room for improvisation.

[clover12]

Although I have not used any trading simulators, I prefer using real money and always having some skin in the game.

[QuadsPoker]

Here are my risk management rules:

1. At each trade I trade 2% maximum of my entire account.
2. Always trade with a stop loss. My stop loss in based on the actual value of the ATR indicator. I don't use support or resistance lines to define my stop loss.
3. Take profit as soon as my initial goal is hit (take like 50 percent of my position) and leave the rest to go wherever it goes.

That's it. Very simple and always set in stone. No room for improvisation.

Indeed, only putting small percentages of your total balance in a trade is one of the best ways to manage your risk. I am doing same as well. Only difference is that I do not use stop loss. If a coin starts dropping significantly below my entry point I just purchase more coins.

If I buy 1 coin at level x and coins drops than I purchase 2 coins at level x-1. If It keeps dropping I purchase 4 coins at a lower level. In this way I am decreasing my profit level and already make profit on the highest coins even when they stay below that entry point.

[jhongzjhong]

If I buy 1 coin at level x and coins drops than I purchase 2 coins at level x-1. If It keeps dropping I purchase 4 coins at a lower level. In this way I am decreasing my profit level and already make profit on the highest coins even when they stay below that entry point.

This is a good strategy since you don't know what will happen next to the crypto market price if you are at the price. When your entry points were lower in the market I usually hold or stop in trading or rather buy some coins to trade again when the price goes up. In trading not only managing risk, but you must also have patient and timing on making transactions.

[butka]

If I buy 1 coin at level x and coins drops than I purchase 2 coins at level x-1. If It keeps dropping I purchase 4 coins at a lower level.

I see. So if I understand you correctly, it's something like a Martingale betting system. You just keep doubling until you make profit. I wonder what was the highest number of iteration you had to go with this system to prevent loses.

[Idrisu]

I hear this term over and over again, "Risk Management" and how important it is for keeping our ducks in a row.  For us newbies that are trading a few coins here and there, what are some ways to really beef up our risk management?

If you did not want to brow up your account it is very important you seat down and put your plan in other.  In trading risk management is one of the way we safeguard our capitals.  If you did not want your whole capitals to wipe out I a single trade you must have in mind of the amount you are ready to lose in a single trade and if the trade goes in your favor how much profits you will make also.

[clover12]

Here are my risk management rules:

1. At each trade I trade 2% maximum of my entire account.
2. Always trade with a stop loss. My stop loss in based on the actual value of the ATR indicator. I don't use support or resistance lines to define my stop loss.
3. Take profit as soon as my initial goal is hit (take like 50 percent of my position) and leave the rest to go wherever it goes.

That's it. Very simple and always set in stone. No room for improvisation.

So if you have $1000 in your account, your max trade amount is $20?

How do you calculate the actual value of the ATR indicator?

[clover12]

Indeed, only putting small percentages of your total balance in a trade is one of the best ways to manage your risk. I am doing same as well. Only difference is that I do not use stop loss. If a coin starts dropping significantly below my entry point I just purchase more coins.

If I buy 1 coin at level x and coins drops than I purchase 2 coins at level x-1. If It keeps dropping I purchase 4 coins at a lower level. In this way I am decreasing my profit level and already make profit on the highest coins even when they stay below that entry point.

How small of trades are you making?  Is it like $100 each trade or $20?  You much a bunch of small trades?

Will you use your whole balance to set a bunch of trades and wait for them to clear the higher limits, or do you set aside a certain percentage of your total balance for just sitting there safely?

I ask because right now all of my trades are just sitting there hanging, waiting for the price to go back up until it hits the sell limits that I set. Right now, I am just waiting. I think that it would be better having some of my account balance on reserve.

[clover12]

If I buy 1 coin at level x and coins drops than I purchase 2 coins at level x-1. If It keeps dropping I purchase 4 coins at a lower level.

I see. So if I understand you correctly, it's something like a Martingale betting system. You just keep doubling until you make profit. I wonder what was the highest number of iteration you had to go with this system to prevent loses.

I think Quads is betting on safer or more established cyrypto's that are more likely not to just vanish or fall off the charts overnight. Unlike some of the new ones with more erratic looking trends going all over the place.

[clover12]

If you did not want to brow up your account it is very important you seat down and put your plan in other.  In trading risk management is one of the way we safeguard our capitals.  If you did not want your whole capitals to wipe out I a single trade you must have in mind of the amount you are ready to lose in a single trade and if the trade goes in your favor how much profits you will make also.
[/quote]

Well then what are some simple examples of the numbers you suggest? How do you calculate the amount you are willing to lose in a trade???

[Timmzzy]

I hear this term over and over again, "Risk Management" and how important it is for keeping our ducks in a row.  For us newbies that are trading a few coins here and there, what are some ways to really beef up our risk management?

In my own uptake I will say risk management is the aspects where by one don't have to put all capital in one basket, in other words you don't invest all your capital in one coin, and also you don't trade in one particular coin.

[TomArayaSlaya]

It basically means not wasting all your money for basically no reason at all you will need to calculate what you are putting in and whats going to come out at the end and basically maintain the risk you will be taking

[maydna]

One of risk management is know how much money you will use in trading and don't use all in for your money. Besides that, never go all in one coin only and spread the money for at least 3 coins so you can expect to make a profit. But maybe there is more than what I write because I am sure for the expert, they will understand better than me. But as long as you can know the amount of money you want to use, you can control yourself, and you are not greedy to chase a bigger profit, then you can reduce the risk in trading.

[udidrone]

I hear this term over and over again, "Risk Management" and how important it is for keeping our ducks in a row.  For us newbies that are trading a few coins here and there, what are some ways to really beef up our risk management?

My risk  management only do martingale. Or maybe not use all money in 1 coin. If people said not use money for daily, or use money that we afford to lose is important rules in trading and investment and it is not risk management.

[Caladonian]

Here are my risk management rules:

1. At each trade I trade 2% maximum of my entire account.
2. Always trade with a stop loss. My stop loss in based on the actual value of the ATR indicator. I don't use support or resistance lines to define my stop loss.
3. Take profit as soon as my initial goal is hit (take like 50 percent of my position) and leave the rest to go wherever it goes.

That's it. Very simple and always set in stone. No room for improvisation.

Indeed, only putting small percentages of your total balance in a trade is one of the best ways to manage your risk. I am doing same as well. Only difference is that I do not use stop loss. If a coin starts dropping significantly below my entry point I just purchase more coins.

If I buy 1 coin at level x and coins drops than I purchase 2 coins at level x-1. If It keeps dropping I purchase 4 coins at a lower level. In this way I am decreasing my profit level and already make profit on the highest coins even when they stay below that entry point.

It's a good practice not to put everything at one entry position, traders have it's own style but making sure you are not being stuck is very useful
in means of risk management, as you can still move forward even your call got busted and you still have funds to find another coins and start all
over looking for some good calls again.

Better allocations of your money, the more you understand the risk the more chances you've got to lessen your risk and higher chances to earned.

[Bosx1ne]

I hear this term over and over again, "Risk Management" and how important it is for keeping our ducks in a row.  For us newbies that are trading a few coins here and there, what are some ways to really beef up our risk management?

Risk management is about being well prepared to the risks that we are taking. Before we make investment, you should identify the risks that we are going to face for us to create a wise plan to handle and overcome it.

[Sanitough]

I hear this term over and over again, "Risk Management" and how important it is for keeping our ducks in a row.  For us newbies that are trading a few coins here and there, what are some ways to really beef up our risk management?

Risk management based on my personal opinion are :

* Only risking what you can afford to loss in trading (same goes with gambling)
* Diversify your investment - meaning don't bet everything in one coin (e.g. bitcoin or ethereum), you need to spread your money
   in different coins in the market, and make sure they are all legit so you can minimize the risk. When you put only in one coin, you will likely
   to end your journey early, whether you fail or succeed.

* Learn when to get out, that is using your mind all the time and avoid getting emotional during tough times in making decision.

[joniboini]

Calculating your exact number of how many coins you should buy, when you get out and etc requires experience and of course, tied directly with how much funds that you have. If you want a higher reward, then you must be ready to prepare with a higher risk. Sanitough tips are in general good, but you need to explore yourself how much you can risk etc. Technical analysis should help you.

One of risk management is know how much money you will use in trading and don't use all in for your money. Besides that, never go all in one coin only and spread the money for at least 3 coins so you can expect to make a profit. But maybe there is more than what I write because I am sure for the expert, they will understand better than me. But as long as you can know the amount of money you want to use, you can control yourself, and you are not greedy to chase a bigger profit, then you can reduce the risk in trading.

Portfolio management is a cool strategy but it implies that you can pick which coins/tokens that you should buy in a specific timeframe. Just don't buy any coin blindly, it's better to diversify with coins that have great liquidity and the lowest spread as possible (like BNB for example) because the risk of getting dumped is lower (but not impossible).