Risk Management in trading cryptocurrencies ...??

[fahmimajannat]

Actually if you are new in trading its better not to invest with your whole capital.
Because everyday will not be yours.
So its better to invest wisely and set a stop limit order in order to save yoyr capital from reducing ridiculously.
So set a stop limit order in 2-5% loss
So that if Your assumption goes wrong you Won't lose your whole capital

[Fatunad]

Actually if you are new in trading its better not to invest with your whole capital.
Because everyday will not be yours.
So its better to invest wisely and set a stop limit order in order to save yoyr capital from reducing ridiculously.
So set a stop limit order in 2-5% loss
So that if Your assumption goes wrong you Won't lose your whole capital

2-5% is really shallow if you do deal with cryptocurrencies because we know on what extent could price volatility can affect your trades.Setting it up on that percentage
would just really end up for you to chase up your losses because it would really be that fast manner since hitting those SL's would be damn easy.Its not ideal imho
based off on experience thats why i did get rid of that kind of strategy when it comes to risk or bankroll management unless if you can spot out or in front of
your pc all the time where you can changed off decisions on point.

[DarkDays]

-snip-
Of course not everyone has a goal but everyone who starts trading should have at least a goal to make this much or that much in order to keep following that strategy otherwise they are just winging it and that is not a good way to trade.

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.

I agree, risk management is always there but there are ways to manage and/or minimise it. Having what I call 'an exit strategy' is crucial to avoiding pitfall which often happen as a result of market volatility.

Even if you don't have these exit strategies in place yet you will soon come to realise how much loss you can avoid by having them. Ultimately, I find that you need to experience it for yourself before you become serious about implementing the exit strategies talked about by @taufik123.

[AakZaki]

learning to do risk management will be very good for the integrity of your capital. Trading is not just buying and selling, but how we can maintain our capital, be able to predict the risks that will occur and get a definite profit and in accordance with the strategy. Besides doing risk management, good capital management and psychology will also affect your losses and profits. Especially good psychology will have a good impact on your trading. Technical analysis is also important and must be studied in depth to be able to read where the market is going.

[gabbie2010]

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.     

I agreed with your idea of investing with $300 $200, $100 out of $1000 this is very achievable if the investor or trader make a proper research of the coin with a good potential and risk to reward ratio or trade with the said amount which I believed the risk is worth taking  e.g some coins has the tendency to pump 5X or more however trading with a 2% to 3% of $1000 the profits earned doesn't worth all the efforts and time i.e using a mere $10 to trade is just a waste of time.

[wxa7115]

Actually if you are new in trading its better not to invest with your whole capital.
Because everyday will not be yours.
So its better to invest wisely and set a stop limit order in order to save yoyr capital from reducing ridiculously.
So set a stop limit order in 2-5% loss
So that if Your assumption goes wrong you Won't lose your whole capital

2-5% is really shallow if you do deal with cryptocurrencies because we know on what extent could price volatility can affect your trades.Setting it up on that percentage
would just really end up for you to chase up your losses because it would really be that fast manner since hitting those SL's would be damn easy.Its not ideal imho
based off on experience thats why i did get rid of that kind of strategy when it comes to risk or bankroll management unless if you can spot out or in front of
your pc all the time where you can changed off decisions on point.

In fact there are many ways to manipulate your capital so you have more room and your stop loss is not so tight, if you invest all your capital in a single coin then it is true your stop loss will have to be 2% to 5% from your original entry point.

But if you invest half of your capital suddenly your stop loss can be anywhere from 4% to 10% your entry point and still lose only 2% to 5% of your capital, did you see what happened there? The smaller the amount of capital you invest in a coin the bigger your stop loss can be, so supposing you are willing for the price of a coin to go down 20% before you sell and you do not want to lose more than 5% on the trade the maximum capital you can invest in that coin is 25%.

[Fatunad]

learning to do risk management will be very good for the integrity of your capital. Trading is not just buying and selling, but how we can maintain our capital, be able to predict the risks that will occur and get a definite profit and in accordance with the strategy. Besides doing risk management, good capital management and psychology will also affect your losses and profits. Especially good psychology will have a good impact on your trading. Technical analysis is also important and must be studied in depth to be able to read where the market is going.

Talking about predictions of cryptocurrency price movements I don't think always what is predicted to go well, sometimes it is not according to the analysis we are doing, it's just that to keep assets from losing a very large amount, maybe you can apply short-term trading.

Yes, its unpredictable but somehow having our own analysis will really be helping us out on making out predictions basing off with those analysis that had been made.
Risk management is a thing that you would able to mold up when you do deal with this market.We do really need that for us to sustain or survive this market.
If you wont do nothing then there's no where you would able to survive this fierce market.You should really be prepared for that since from the time you
had decided to deal with this market.

[TheUltraElite]

Especially good psychology will have a good impact on your trading.

Understanding the market psychology is important and this comes in a few years after having watched the market or traded actively. Theoretical understanding has little effect here, it is a more practical thing. You sell when the market pumps and you buy when the market crashes. That is how you take advantage of the situation. But most traders do it wrongly without even knowing.

Technical analysis is also important and must be studied in depth to be able to read where the market is going.

Both fundamental and technical is important but even then TA will not be a 100% predictor of anything. It can give you an idea of which side the price might move but you have to decide the next step. You cant blame TA for ending up in a loss. This develops with reading of charts and learning how quickly the market normally reacts to changes in news and politics.

[MCobian]

Many traders do not learn risk management when trading, so finally suffered a loss until the capital ran out. We must realize the importance of
risk management in crypto trading, therefore learning knowledge about risk management is a must. The difference after mastering risk management
with before mastering risk management for me is clearly different.

Partition of capital is the first step in carrying out Risk Management, usually my capital is divided into 5 parts. I will use the first part to buy coins
that I think are profitable, but if the price goes down, I can use the second part to buy again coins at a lower price. The third to the fifth part is used
to buy more coins if the price decreases. By trading like that I feel much calmer. The second step to implementing risk management is by setting
stop-losses and take profits, which traders have to do. In order to be useful for reducing risks due to volatile crypto price movements. By carrying out
the two steps I have mentioned, risk management should be carried out properly. And we can become successful traders.

[conected]

Many traders do not learn risk management when trading, so finally suffered a loss until the capital ran out. We must realize the importance of
risk management in crypto trading, therefore learning knowledge about risk management is a must. The difference after mastering risk management
with before mastering risk management for me is clearly different.

Partition of capital is the first step in carrying out Risk Management, usually my capital is divided into 5 parts. I will use the first part to buy coins
that I think are profitable, but if the price goes down, I can use the second part to buy again coins at a lower price. The third to the fifth part is used
to buy more coins if the price decreases. By trading like that I feel much calmer. The second step to implementing risk management is by setting
stop-losses and take profits, which traders have to do. In order to be useful for reducing risks due to volatile crypto price movements. By carrying out
the two steps I have mentioned, risk management should be carried out properly. And we can become successful traders.

- A small percentage of people in trading really do not learn how to manage risk and by the time they realize this mission, their accounts are running out of money and except for those who don't love knowledge, I still see a lot of traders who know how to manage risk but still try to fight their ideals, fight the market full of these nightmares. The methods and principles for dividing capital and managing similar risks as you have been mentioned a lot but overall, people are still the most important factor here, no one can force others when they don't like these principles.

[el kaka22]

Many traders do not learn risk management when trading, so finally suffered a loss until the capital ran out. We must realize the importance of risk management in crypto trading, therefore learning knowledge about risk management is a must. The difference after mastering risk management with before mastering risk management for me is clearly different.

Partition of capital is the first step in carrying out Risk Management, usually my capital is divided into 5 parts. I will use the first part to buy coins that I think are profitable, but if the price goes down, I can use the second part to buy again coins at a lower price. The third to the fifth part is used to buy more coins if the price decreases. By trading like that I feel much calmer. The second step to implementing risk management is by setting stop-losses and take profits, which traders have to do. In order to be useful for reducing risks due to volatile crypto price movements. By carrying out the two steps I have mentioned, risk management should be carried out properly. And we can become successful traders.

That risk management usually comes from dividing your money into pieces and many people end up failing to do that. I normally put only 5% of my whole portfolio into just one thing, I never go all in with just one coin, and when I am buying that coin with only 5% of my money, I also place that apart 10 times as well.

If you want to know an example that means if I have 10k dollars, 5% of that is 500 dollars, that means I invest 500 dollars into something and I split it 10 times for each week, meaning I buy 50 bucks worth of that coin for 10 weeks to get to that 500 dollars. If you keep doing this for 20 different coins that you really trust, not centralized stuff like ripple or bch or bsv, stuff like that, but more serious coins like btc, eth, so forth that would mean that you would end up with a great portfolio and that is how proper risk management can be done.

[imstillthebest]

how can you protect your capital when you already risk it in trade but for you to protect it you will not risk it in any risky activities and you need to convert or pull it out if its in crypto form but i agree on what you read ,
 thats true that we need to risk small in trading because trading is verry risky and 3 to to 5 % isnt considerably big  .
alts do dump when btc dump but when btc pump alts dont dump  .
your not always in a loosing situation if you trade with alts

[k@suy]

learning to do risk management will be very good for the integrity of your capital. Trading is not just buying and selling, but how we can maintain our capital, be able to predict the risks that will occur and get a definite profit and in accordance with the strategy. Besides doing risk management, good capital management and psychology will also affect your losses and profits. Especially good psychology will have a good impact on your trading. Technical analysis is also important and must be studied in depth to be able to read where the market is going.

Well i guess learning on how to manage the risk that is inevitable and always present whenever there is a trading or investment presented is a must. Even in gambling, we are dealing with the risk, or should i say whenever there is a capital or principak or anything that was relevant to us that might be used in unsure return was considered already as a risk. It's inevitable to get lose sonetimes but with proper risk management it could minimize how much we can lose.

[william_mathews]

Risk management helps cut down losses and protect money against potential losses in crypto trading. When the risks are managed effectively, the traders can make more money in the crypto market and avert losses.

Risk management is the ultimate key to successful trading. Of course, losing money is a part of trading, and everyone does that. But good traders respect and manage their risks.

You must be able to manage your risks and cut losses so you can continue to trade. Managing risk also means protecting your capital.

Risk-Reward ratio - It is the standard measure used to compare the potential returns to the possible loss. A trader should risk only the amount he/she is ready to lose. E.g., If you have a risk-reward ratio of 1:3, it means you’re risking $1 to make $3.

Stop-loss - By far, this is the most effective risk management strategy a trader can make use of. Stop loss is the ultimate key and the most effective way to mitigate your risks (and cut down your losses). A stop-loss percentage is the amount a trader can afford to lose when the market doesn’t move as expected. Stop losses help prevent larger losses from occurring in the volatile crypto market. It is an excellent tool for risk management. Most trading platforms and crypto bots offer this tool.

Leverage trading - Using borrowed money to trade cryptos is also one of the best ways to manage risks. When you trade using leverage, you can invest a small amount and trade with a bigger value. Then, when the market moves in your favor, your profit potential increases simultaneously.

Spread monitoring - You should understand how the ‘spread’ works in trading to track the risk potential. The spread effectively shows the difference between the buying and selling prices, and also, you can predict the direction in which the market is moving.

[Ararbermas]

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...🙂♥️

actually there are some occasions that when bitcoin goes up in the market some of the alts goes down and making an opposite direction, but usually they're doing the same way wherein what's the reactions of bitcoin,. like if it goes up alts will goes up as well when it goes down definitely they will going down, and on this current situation of the market is the enough proof how alts are affected and seems connected with bitcoin.

[Btcvilla]

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...🙂♥️

Yes, you are absolutely right, if I myself it is better to divide our capital into 3 parts. The first 30 percent is for trading, another 30 percent is preparing to buy coins while it is being corrected, and another 40 percent is for coins that can be invested in 1 or 2 years such as ETH. So it's not all-in. So I can backup my finances. When I fail in trading I still have other investments and buy coins when correction.

[unusualfacts30]

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...🙂♥️

This is how it works.

BTC goes up..alts go sligtly lower.
BTC goes down.. alts go much lower.
BTC stabilize... alts goes up.

3-5% can be large or small depending on how much you are investing. I find that 10%-20% is a good amount with good risk management strategy that includes using sl and tp.

[dotcoin.info]

Everything is correct. Better to divide your deposit into 100 parts and use 1% on every trade. Anyway, as long as you are a beginner.
The next thread discusses how not to do it, namely, take the x100 leverage and go all-in for all the money. Hopefully newbies will learn a good lesson from other people's experience.

[CryptopreneurBrainboss]

thats true that we need to risk small in trading because trading is verry risky and 3 to to 5 % isnt considerably big  .
alts do dump when btc dump but when btc pump alts dont dump  .
your not always in a loosing situation if you trade with alts

There are different phases of the market, we have a time when both coins pump and dump together like what we're experiencing now, that's the market dumps affect both industry. Then we have a situation when Bitcoin pumped but the altcoins don't follow instead they dumped and that's when Bitcoin is on the run, we're best advice to trade Alts against USDT then and not Bitcoin if not you'll be rekted.

We also have scenario when it's time for alts to partake in the bullish market, this phase sees Alts producing more 24hrs gains than Bitcoin, usually Bitcoin is static at this point or her gains are in the one digit rages.

You best have to understand which phase the market is in before you start trading that way you won't be in the dark and can speculate correctly on the direction of the market. When you understand what you're doing and have perfect the skills of trading then it'll become less risky.

[jaberwock]

You best have to understand which phase the market is in before you start trading that way you won't be in the dark and can speculate correctly on the direction of the market.

Yeah, this way trading bitcoin in long is easier and effectively profitable; for example, if you have bought bitcoins at whatever prices then when bitcoin will be trading around $70k levels then you will be in definite profits, lol  . The catch here is, your patience and you are trading bitcoin and in spot market. What I mean here is, if we focus on few things out side of analytics then we will get few advantages to manage the risks within our control.

Better to divide your deposit into 100 parts and use 1% on every trade.

Not trading with all 100% of capital must be a basic rule of risk management but these days people are going for 1000% or even 10,000% of their capital by availing leverage. I do trade up to 10% of capital for one trade and at a time I never cross 60% of my capital across my all trades.