Why risk management is so important for Every Trader.

[BTC_Mouse]

Today Market Suddenly dump, so I explain why need risk management is so important for Every Trader.

📌 If you enter a $100 trade and lose 15%, you’re down to $85.

📌 If you make 15% profit on your next trade, now you have $97.75

📌 It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.

🎯 Also win % does not make a successful trader, but strategy and risk management do.

For example:

✖️ One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.

✔️ Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.

Expect to lose short term. Plan to win long term.

📌 So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.

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[airdata]

Cryotp Trading is not a Hassle free business, this is very risky business for new people, and nobody can make good amount from crypto currency without any Risk. On the First time i invest a little amount on a Coin now i already make 10x from my investment.               

[Mpamaegbu]

Besides, beyond all that the OP has stated in respect to risk control and money management is the issue of "Patience" and "Emotional control". I will go with the trader with a 1/5 risk to reward ratio even though the win rate is small. What that means is the trader will tend to be more selective of trades to execute and not just be in every trade. The problem with most traders is they want to be seen trading at all times even when there isn't any trade set up ready. That isn't how trading works. One has to choose one's trades and pick those with high winning rate.

Cryotp Trading is not a Hassle free business, this is very risky business for new people, and nobody can make good amount from crypto currency without any Risk.

This is why there's always a caveat to every form of trading on the trading/exchange sites that one could lose one's capital. Again, crypto trading is highly volatile and shouldn't be indulged by anyone who doesn't have the set skills for it.

[Theb]

Actually risk management is more easy to understand if you just explained it in a way about risk management being more into implementing stop/cut-losses and profit taking into every ones plan. Setting up cut-loss points and profit taking points or what others know about entry and exit points is how a normal trader earns money and also reduce/minimize the losses a trader will have if a trade goes wrong. A traders must also know how to be satisfied with their earnings and they need not to be looking back if ever they hold for it for a couple of days. A lot of traders experience this after taking profit yet the value of their crypto keeps going up they need to lose this kind of mindset as they already have a trading plan in action.

[Peanutswar]

Risk is part of the trading environment if you want to try trading it's better if you already made yourself ready for the possible outcome to win or to lose. In trading, this requires strong mental stability not every time a market collapse you are going to sell your assets that are not like that it's consists of analysis and experience to identify the outcome and makes a move towards your decision to put a buy and sell position. Losing in trading is normal but of course, you need to set a limitation to the number of losses and amount of money. The same thing in winning easy set a goal and not expect too much and becomes greedy. When making a trade always set a goal.

[michellee]

It is not easy to manage the risk on trading because no matter how much profit you made, you will still face that risk in the next trade. The only thing you can do is manage your money to trade, and if somehow you lose on trading, you need to be careful in the next trade and always analyze more to find the way to limit the risk. If you can not see the profit in the short term, maybe you can change your term into a long term because sometimes, you will make a profit in the long term.

The other suggestion will not use all-in of the money because that will make your risk bigger. You can split your funds into several parts and try to trade using that amount. If you lose, you can recover from a small amount and always pay attention to the market moves to not get in the trap by buying the coin at a high price.

[SquallLeonhart]

Also win % does not make a successful trader, but strategy and risk management do.

Strategies and money management are important but % calculation is also more important. In your example, if your doing your winning trades of multiple times then definitely you will get back to the original capital along with some profits.

I am saying these because we need to minimize the number of losing trades and maximize the number of winning trades. So, if you lose one time then you need to win at least 3 to 5 times. Because only winning more will get you consistent profits and if you are making profits and losing at same number of trades then there will be no point of staying in trading. Just quit.

[2double0]

Also win % does not make a successful trader, but strategy and risk management do.

Strategies and money management are important but % calculation is also more important.

That is right because without calculating the %s of the wins or losses, a trader will not have a clear insight of his ongoing trading journey and he will not know where to take maximum profits to beat the losses and where to take the least loss if profit is not being seen in that trade. A good trader must diversify his capital in different trades and can also use his full capital but with proper risk management, so if there are 10 open trades of equal amounts and 7 of them are in profits, that trader should take those profits at times when it is needed. If 3 of those trades are in losses, trader should have set a good SL to let him save himself from losing big from those trades.

[cheezcarls]

This is what I have been telling of the newbies who are trying to get started with cryptocurrency trading. I told them that no matter if they are newbies or pros, risks are still there. There's no such thing as risk-free trading. All they need to do was to learn how to set the stop loss and never become greedy by just simply take profit when the amount is already good enough. Risk management is necessary, and we have to accept or acknowledge if we ever lose that trade. And by the way, always put in your mind that we experience more losses than wins.

[jossiel]

The long term is always the best choice to go along with the market.

It's important to know your plans and how long you should be staying in the market. There will be disappointments that you'll have because the shorter term has always the action and will give you little losses up to half of your capital's percentage loss.

Risk management shall be learned while you're trading for you to adopt the market's volatility and change from time to time.

[justdimin]

The long term is always the best choice to go along with the market.

It's important to know your plans and how long you should be staying in the market. There will be disappointments that you'll have because the shorter term has always the action and will give you little losses up to half of your capital's percentage loss.

Risk management shall be learned while you're trading for you to adopt the market's volatility and change from time to time.

By opting for long term, we can easily tackle the risks in crypto trading. Yeah, dealing with long duration of holding plans, we can easily adopt what risk management suggests. But, most people are not ready to accept long term holding as a type of trading as they need quicker profits and making entry and exit out of technical analysis and not just by profit levels.

Risk management will become possible for people when we experience the real heat market fluctuations; how you manage your unrealized losing trades is the basics of risk managements.

[Issa56]

With the little experience am having before you start trading the first thing you should learn about is risk management. When it comes to cryptocurrency you definitely lose you don't expect to be in profit always there will definitely be lose but one of the most important thing is to learn how to reduce your lost, if you are trading any coin always make sure you make use of stop lose I believe stop lose is very important in trading because I believe is better to lose 20% of your fund than to lose 80% of your fund and when it comes to cryptocurrency you don't have to invest all your capital and you don't have to borrow money to invest in Cryptocurrency. Whenever you are trading always make sure you use stop lose it is very important in trading.

[tvplus006]

...So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.

The most important thing in any strategy is not to lose your money. If you learn not to lose your money, you will definitely become a successful trader. Together with your experience and knowledge, you will develop a strategy for yourself that will allow you to achieve a positive balance when the profit will exceed the losses received.

[Distinctin]

Risk management is at the top of trading. It includes decision-making, market analysis, technical analysis, and fund management. A failure to any one of them affects the result of our trades. That is how very important is that and mostly we can see traders especially newcomers suffer such losses and bad entry as they don't know what they are doing. They don't know what they should have to do.

That is why we can't just say that trading is easy, we can really say it has a process that we need to follow in order to succeed otherwise, failures come next to us.

[Oilacris]

Cryotp Trading is not a Hassle free business, this is very risky business for new people, and nobody can make good amount from crypto currency without any Risk. On the First time i invest a little amount on a Coin now i already make 10x from my investment.               

Yes, its risky but if you do know on what youre doing then you can really make out big returns out of your investment and its a bit needing a mix of luck if i were to say.

Before you do make out investment then be sure that you are aware of the risk and only invest on the amount that you can afford to lose.Dont make your hopes that high because

this isnt something that talks about easy money but rather still needing proper analysis and good decision making for you to make out some profits.

[tranthidung]

📌 If you enter a $100 trade and lose 15%, you’re down to $85.

📌 If you make 15% profit on your next trade, now you have $97.75

It is classic. Not only about this, but also about your capital. Traders or investors will be killed if they don't have any capital left in hands.

• Protect your capital must be your priority. You can close your position with a draw and a small deduction from trading fee. Sometimes, it is your success, not failure.
• If you win big, you will have two components in your account balance: Initial capital + Big profit. Let's take do the followings
  
  • Take your initial capital out of your account
  • Protect it carefully and don't use it if you don't lose all the big profit in your account.
  • If you lose all your Big Profit, don't use your initial capital to trade or invest immediately. Spend few days or even weeks to think of your mistakes, learn from losses to improve yourself
• In crypto market, it is not hard to get big profit, the difficult part is how to keep your profit, then your capital

[Yatsan]

Risk management is really important for every trader since we are dealing and working into a market that is highly volatile and we do know that risks are associated upon working into it. Practicing how to manage certain risk will help you out as a trader to make your losses to be lessen and not to be dragged down even further. Being able to deal and work on managing risk will make things somewhat favorable to you because if you will keep on banging against risks and putting too much effort recovering your losses, you might just end up having nothing in the end. You can just be able to survive in trading if you do know how to properly manage your capital and deal with the risks to cut down possibility of greater losses so you can still have something to start with and will not end up empty handed.

[Sinjokubhi]

Today Market Suddenly dump, so I explain why need risk management is so important for Every Trader.

📌 If you enter a $100 trade and lose 15%, you’re down to $85.

📌 If you make 15% profit on your next trade, now you have $97.75

📌 It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.

🎯 Also win % does not make a successful trader, but strategy and risk management do.

For example:

✖️ One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.

✔️ Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.

Expect to lose short term. Plan to win long term.

📌 So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.

Risk management is very important, but what is more important is whether you can do it or not. Basic also needs to be emphasized to beginners in trading. Because there are still many who start trading without knowing how the risks they will face later, because for beginners who are still early trading, they usually only think about the benefits that will be obtained, without realizing the risk is much higher than that, if we don't know how how to manage it well.

In fact, this will traumatize beginners from the losses they will find when they jump right into the real trade and make them mentally exhausted. Their view of crypto trading will be bad, because all they get is a loss, unlike what they imagine, being a trader is difficult to do, if all we want and think about is profit. That is the wrong mindset, if from trading we will get profit continuously. Everything must have its own risks, it is not easy to be able to earn for beginners who are just getting into trading. It is necessary, prior understanding of the knowledge to trade and then you can try it.

You learn about risk management after you understand how to trade. That will really help you in trading later. Because from here almost everything will be taken into account and in the future what you have to do, what actions you have to take must all be determined before something like an increase or decrease in prices occurs. Risk management is also useful for you to anticipate large losses. For example, by placing a stop loss after you predict and consider how far the price will decline. Therefore, do not assume that the decline in prices is a natural thing, it could be that after the decline there will be no more increases. So you need to think carefully about this.

[jahepahit]

risk reward ratio is very important as a trader, this is one of the things that will you to have an hedge over the market for capital preservation. you dint need to work on how to always win but how win big whenever you win and minimize your loses. doing this will help you manage your risk, save your capital and make decent even if you lose some trades.

[Dannaey]

Cryotp Trading is not a Hassle free business, this is very risky business for new people, and nobody can make good amount from crypto currency without any Risk. On the First time i invest a little amount on a Coin now i already make 10x from my investment.               

That is right. Cryptocurrency is very volatile which is why this is a very risky investment. Risk Management is the key. In short-term trading, Please be mindful in putting stop loss to avoid getting wrecked. This practice was not followed by many, mostly newbies. Cut loss if necessary when things didn’t go as predicted, then find a good entry.