Risk Management in trading cryptocurrencies ...??

[Stedsm]

Things have changed drastically OP, now it's not the same as when BTC drops, alts will follow because some alts go against the trend and show great profits while when BTC starts going up, alts are outperforming BTC in terms of gains and recoveries are damn quick (let's take example of today's dip and then recovery, both were as big as BTC). I believe people get rekt because they simply don't follow their own rules of not going all-in into one position. Sometimes it becomes profitable when you understand the risks involved but have the guts to go all-in just many of us May have done today.

[wxa7115]

I read from a twitter thread and from some blog that we should took trade by risking 3-5 % of our capital per trade. So you can protect your ccapital.

But in Cryptocurrency Market i realized that when btc pump or dump 95% alts gona dump, So i can maintain this Risk mananegemnt to protect my capital.

Please any suggestions...😊

Thank You So Much...🙂♥️

In fact the risk should be even lower than that especially if you are investing in new altcoins, this does not mean that you should only invest 1% of your capital on each coin, what this means is that you should only be willing to lose that amount of capital on each trade.

This is in fact very easy, lets suppose that you have 100 dollars so a loss of one dollar should make you sell whatever coin in which you invest, if you invest in a coin 10 dollars and each coin was worth one dollar then that means that as soon as that coin is worth 0.9 dollars you must sell as you will have a loss of one dollar or 1% of your capital.

[airdata]

You asked a very good question, as my opinion don’t invest your all Fund at once and Don't invest your all fund on One coin. If you have 1000 usd then you can invest 300 usd, and if you see that your invested coin again has dump, then you can again buy. This will very profitable for Trading. I use this formula.     

[marilynmanson21]

The risk you can accept depends on the type of trading you use, If you are a short-term trader then 2% -3% is enough, but if you are a long-term trader the risk of 30% -40% in my opinion is still small, because the long-term trader's profit target is above 200% to 500%.
Other considerations are sometimes needed, such as the funds you have, the more funds you have then you can accept a greater risk, but also with a potential profit of more than 500%.

[rhomelmabini]

Always be friendly with the stop-loss feature that's for sure the best and always the common duo to risking what capital you're trading. Well, I think 2% is manageable but on my end I always go with the 1:2 or 1:3 risk reward ratio, risking my 1% to gain 2-3%. For a beginner I think it's always advisable to stick with 1% and consider it as a learning approach and when you get used to it then go with much larger percentage.

If you want to trade always remember this cycle Bitcoin > Major Cap > Mid cap > Low cap this is the cycle of the smart and dumb money in the cryptocurrency sphere.

[tygeade]

clear objectives and how the trading strategy to be carried out must be thought of first. Many people start trading without any preparation, they enter with their fillings without doing market analysis and what strategies will be used. This kind of trade carries a lot of risk. Risk management, financial management, psychology management need attention, because it will determine the success or failure of trading. It is better to earn little by little than to force it to get a bigger profit.

You are right and setting goals is as important as making strategies, having unclear plans or having unrealistic plans are not healthy for a trader specially in crypto market where profits are unstable and so are the losses and having balance between expectations and reality is a must. One cannot expect to double their bankroll overnight and if they are trying to do so, better option is gambling for them.

I agree with OP that we shouldn't trade too big or buy too much of any coins and 3-5% is a good amount to invest and I might lower it even further if you ask me because our capital should never drop below 50% and the remaining 50% shouldn't be allocated to 10-15 coins instead a lot more and diversifying your portfolio is one of the secret to success. Don't accumulate garbage but don't let one coin convince you to buy all of it.

[goldade]

Risk management is very pivotal to the process of being a successful trader. A lot of good traders have blown their capital just because they became overconfident and ignored risk management in their trades.
There is actually no exact percentage of capital to place a trade in the process of risk management. What I tell people is that they should only trade what they can afford to lose. Don't trade 3 percent of your capital if you can't afford to lose it.
The whole essence of this is avoid blowing up the capital equity in a few losing trades

[Vaskiy]

Hey man! When it comes to making an investment/earning out of cryptocurrencies you need good capital or the patience. Rather than requesting people to help with risk management, just try to explore and learn more about the market. Start investing/spending a small amount from your regular earning. This will give your family a big reward in the long term. Atleast you need to hold cryptocurrencies for four to five years. In between if you find the rise to be worth enough for the investment, then make use of it.

[semobo]

Trading made so easy with the help of all those stable coins, if a trader feels that dump is coming they can simply trade their coin with USDT like coin and protect the capital from huge loss and also they can have stop loss at 10% to execute your order in case of sudden dump.

But the real fact is, it is impossible to find when the bump and sump coming so you are making every decision based on your assumptions.

[ice098]

I read from a twitter thread and from some blog that we should took trade by risking 3-5 % of our capital per trade. So you can protect your ccapital.

But in Cryptocurrency Market i realized that when btc pump or dump 95% alts gona dump, So i can maintain this Risk mananegemnt to protect my capital.

Please any suggestions...😊

Thank You So Much...🙂♥️

Risk management is one of the main thing we should learn and we should understand aside from trading and reading charts, because there's no assurance in the market, cryptocurrency is very volatile, sometimes our TA may be shorted may be not hit by our entries at some point there's no way aside from cut loss so risk management is hard but very essential to know in this world of trading.

[darewaller]

You asked a very good question, as my opinion don’t invest your all Fund at once and Don't invest your all fund on One coin. If you have 1000 usd then you can invest 300 usd, and if you see that your invested coin again has dump, then you can again buy. This will very profitable for Trading. I use this formula.     

You invest 30% of your bankroll within a single token? That's really risky I feel and I am surprised its working for you. Maybe you are investing in very good tokens like polkadot or recently BNB and that is why you are making profit otherwise 30% means if you make 3 bad decisions, you are out of the game.

I think 2% is manageable but on my end I always go with the 1:2 or 1:3 risk reward ratio, risking my 1% to gain 2-3%.

Does this mean if I have 10k USD bankroll then I should buy tokens with 100 USD (1% of 10k) and sell them for 102-103 USD since you said 2-3% profits? I actually like this idea but 2-3% gain is really low considering the risk with altcoin market and if you somehow made the right investment why just content with 2% of profits.

[boyptc]

But the real fact is, it is impossible to find when the bump and sump coming so you are making every decision based on your assumptions.

There is a way and that is through chart analysis.

And that's not that just based on assumptions but basing it off through what the chart tells. It may not be accurate sometimes but most of the time, with traders that uses charts analysis, it's helping them.

[Quidat]

But the real fact is, it is impossible to find when the bump and sump coming so you are making every decision based on your assumptions.

There is a way and that is through chart analysis.

And that's not that just based on assumptions but basing it off through what the chart tells. It may not be accurate sometimes but most of the time, with traders that uses charts analysis, it's helping them.

If technical analysis were irrelevant then we wont really be seeing tons of them that do floats in the market.Every now and then we do saw chart analysis which it might
not really be that accurate but still better rather than on making trades blindly or without any basis.You can really see the difference when it comes to profitability
into those who do just put trades without basis and with those have corresponding analysis towards into their next action to make.
It doesnt matter on what kind of analysis you are into neither fundamentals or technicals, as long it do benefit you out then that what counts.

[boyptc]

But the real fact is, it is impossible to find when the bump and sump coming so you are making every decision based on your assumptions.

There is a way and that is through chart analysis.

And that's not that just based on assumptions but basing it off through what the chart tells. It may not be accurate sometimes but most of the time, with traders that uses charts analysis, it's helping them.

If technical analysis were irrelevant then we wont really be seeing tons of them that do floats in the market.Every now and then we do saw chart analysis which it might
not really be that accurate but still better rather than on making trades blindly or without any basis.You can really see the difference when it comes to profitability
into those who do just put trades without basis and with those have corresponding analysis towards into their next action to make.
It doesnt matter on what kind of analysis you are into neither fundamentals or technicals, as long it do benefit you out then that what counts.

I've said that sometimes it's not. Just as this bull run, nobody have thought of it from the end of 2020.

Right, it's better to have those analysis and they are directing traders to what it should be the next scene of the chart. Those experts on this have been benefiting on it.

Unlike those traders that just put their trust without analysis.

[nelson4lov]

Hey man! When it comes to making an investment/earning out of cryptocurrencies you need good capital or the patience. Rather than requesting people to help with risk management, just try to explore and learn more about the market. Start investing/spending a small amount from your regular earning. This will give your family a big reward in the long term. Atleast you need to hold cryptocurrencies for four to five years. In between if you find the rise to be worth enough for the investment, then make use of it.

Seconded. Although it's a bit different for those trading as you need to be careful about how much you could lose if the trade goes sideways.  Since there would always be winning and losing trades, it's important to know that a good risk management strategy will help any trader stay profitable regardless of the amount of times he losses. The best traders I've seen are the best not because they win all the time, but because they remain profitable even when trades don't go their way.

There's a lot risk management does for a trader. You don't have to turn winning trades to losing ones.

[Ryker1]

^[snip]
There's a lot risk management does for a trader. You don't have to turn winning trades to losing ones.

Well, the risk perhaps we considered and understood as the level of possible financial loss. It should all those values are measured in percentages so that you will determine the possible loss. Risk management is a very important task in trading, this is also will help you to minimize your possible loss and must prepare for the possible outcomes. It seems like you have a trading plan, --your action should be detailed and you can have possible correction once you have seen there is a mistake. Indeed, there is a lot of risk that you may consider.

[nelson4lov]

^[snip]
There's a lot risk management does for a trader. You don't have to turn winning trades to losing ones.

Well, the risk perhaps we considered and understood as the level of possible financial loss. It should all those values are measured in percentages so that you will determine the possible loss. Risk management is a very important task in trading, this is also will help you to minimize your possible loss and must prepare for the possible outcomes. It seems like you have a trading plan, --your action should be detailed and you can have possible correction once you have seen there is a mistake. Indeed, there is a lot of risk that you may consider.

You're on point. Coming from someone who has been trying to get more trading experience, I'd say that trading involves a significant amount of risks, one if not thoroughly managed could be a problem especially in the long run when a trader have several badly managed trades. I  didn't know how important it was until just a couple of months back. Didn't take it seriously in the past and I lost majority of my trading capital. There won't be a repeat this time.

[Shasha80]

Risk management is very important in crypto trading, therefore it is important to learn. Because usually when we trade too relying on emotions,
this will cause panic that makes us experience losses. Therefore risk management is needed to help traders avoid large losses, so one of the benefits of
risk management can minimize losses when trading. Then with risk management, we also dare to take risks to get a higher return than risk.
Actually, in my opinion, risk management is easy to do, but the problem is we are not disciplined in the strategy we made at the beginning.
This is what ultimately makes risk management not going well.

[fullhdpixel]

Always be friendly with the stop-loss feature that's for sure the best and always the common duo to risking what capital you're trading. Well, I think 2% is manageable but on my end I always go with the 1:2 or 1:3 risk reward ratio, risking my 1% to gain 2-3%. For a beginner I think it's always advisable to stick with 1% and consider it as a learning approach and when you get used to it then go with much larger percentage.

If you want to trade always remember this cycle Bitcoin > Major Cap > Mid cap > Low cap this is the cycle of the smart and dumb money in the cryptocurrency sphere.

In crypto world that is as dangerous as it gets, there is really no way you could profit with that type of strategy that easily, it is really unlikely. Why? Because crypto moves 10% easily, it is really basically nothing at all and you would end up with 1% daily, the spread is that much, it would definitely change the price super fast and you will lose money quickly multiple times a day which would mean that strategy fails you that much.

Of course if you are doing it right now and happy with it there is nothing I can tell you, but I have worked with 5% stop loss before and even that was too quick for my test and I ended up switching to 10% first and then 15% and with 15% I am doing fine, I do not lose much that way and it rarely hits that level, at least not on a daily move but a whole correction or crash would be required for that to happen.

[wxa7115]

The risk you can accept depends on the type of trading you use, If you are a short-term trader then 2% -3% is enough, but if you are a long-term trader the risk of 30% -40% in my opinion is still small, because the long-term trader's profit target is above 200% to 500%.
Other considerations are sometimes needed, such as the funds you have, the more funds you have then you can accept a greater risk, but also with a potential profit of more than 500%.

If you are a long term trader willing to hold your positions for a long time then I would say that a loss of 30% or 40% is still too high, you must protect your capital at all costs as earning money in the markets is so difficult.

So I would say that a loss of 10% of your capital in a trade that last a few months is reasonable, anything more than that and you are going to regret it, as coming back from such losses becomes exponentially difficult especially if you lose several trades in a row.