Why risk management is so important for Every Trader.

[nightxglow]

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.

True, i guess most people understand about it already, that in trading you need to understand the risk and need to know how to manage it, when you need to stop before you lose even more, or when you can continue and gain profit. However, it's not as easy as it seems, even if you're good theoretically, it doesn't mean you can implement it just like that. I think experience is really needed in trading, since experience will be the best teacher to teach the lesson. However still, it's truly important to know and implement risk management so you won't regret trading.

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1714469663

[kopijos]

risk management for a trader may be difficult and needs to be looked at. but believe in trading to be able to get a profit we don't always have to get 100% but it's better to get less but regularly. So I think your risk management needs to be applied and try to expand your thinking if in trading there must be a minimum percentage of profit, not just a maximum profit as you are worried.

[Questat]

risk management for a trader may be difficult and needs to be looked at. but believe in trading to be able to get a profit we don't always have to get 100% but it's better to get less but regularly. So I think your risk management needs to be applied and try to expand your thinking if in trading there must be a minimum percentage of profit, not just a maximum profit as you are worried.

Risk management never gives you a hundred percent assurance that you are in profit all the time, this toll just helps us to guide what could be the best thing to do especially when making decisions. But of course, can't be all in perfection, we can't avoid lapses as we are a human being, it sometimes we have been badly affected by our emotions causes to failure.
Whether we like it or not, we can't avoid such a thing and that is more challenging to our part on how to minimize.

[awik p]

risk management for a trader may be difficult and needs to be looked at. but believe in trading to be able to get a profit we don't always have to get 100% but it's better to get less but regularly. So I think your risk management needs to be applied and try to expand your thinking if in trading there must be a minimum percentage of profit, not just a maximum profit as you are worried.

Risk management never gives you a hundred percent assurance that you are in profit all the time, this toll just helps us to guide what could be the best thing to do especially when making decisions. But of course, can't be all in perfection, we can't avoid lapses as we are a human being, it sometimes we have been badly affected by our emotions causes to failure.
Whether we like it or not, we can't avoid such a thing and that is more challenging to our part on how to minimize.

like we play horse racing, I don't think all bets can be won. therefore, in my opinion, management is very important to anticipate losses so that they do not get deeper. what we need to remember is that trading is a probability, so we also have to take into account the risk

[MonaLeeTracy]

Risk management. Financial management. Technical analysis. Experience. from this we will be able to get the maximum benefit from the trades that we do. Of course, having experience in emotional control and also believing in the analysis that we have made will make us less likely to get carried away by Fomo or Fud. This seldom can be owned by many traders because now many see it only from a technical point of view

[darewaller]

Risk management. Financial management. Technical analysis. Experience. from this we will be able to get the maximum benefit from the trades that we do.

The above list is honestly endless; you may add up emotion management, learning from mistake and not repeating same mistake, etc. These things are important as these will help traders for maximizing the profits and at the same time minimizing losing trades. Overall, we can summarize all the required things into two category: good management and good analytical.

having experience in emotional control and also believing in the analysis that we have made will make us less likely to get carried away by Fomo or Fud.

Yeah you are right, when you are good at technical analysis then on the event of FUD, you could exit at stop-loss levels instead of waiting for reversal of market direction.

[rosebrand]

Risk management is key, no matter how good a traders is at  technical analysis if he doesn't apply risk management it's certain he will be in great lose someday, some times analysis might go wrong but with the help of risk management the lose won't cause much damage or having great effect in the portfolio of the trader. Risk management is key without it many people trading with leaverage will liquidate so quickly, in margin trade risk Management helps alot to sustain one's account even when there is a crash in the Market, with risk management your account will still be breathing real good.

[rhodelmabanal]

Risk management is key, no matter how good a traders is at  technical analysis if he doesn't apply risk management it's certain he will be in great lose someday, some times analysis might go wrong but with the help of risk management the lose won't cause much damage or having great effect in the portfolio of the trader. Risk management is key without it many people trading with leaverage will liquidate so quickly, in margin trade risk Management helps alot to sustain one's account even when there is a crash in the Market, with risk management your account will still be breathing real good.

Yeah i believe that risk management is important to every trader across the globe, because trading is a risky type of occupation, crypto is risky it is high on volatility so if we can't manage risk we maybe loss a huge amount of profit or maybe capital so as a trader risk management is important.

[ice098]

Risk management is key, no matter how good a traders is at  technical analysis if he doesn't apply risk management it's certain he will be in great lose someday, some times analysis might go wrong but with the help of risk management the lose won't cause much damage or having great effect in the portfolio of the trader. Risk management is key without it many people trading with leaverage will liquidate so quickly, in margin trade risk Management helps alot to sustain one's account even when there is a crash in the Market, with risk management your account will still be breathing real good.

Yes it is and always because risk management was the one who can save you from huge loss ahead. Even how good a person is in predictions, in trading, gambling, or in investing as long as he doesn't know how to manage the risk he was willing to take experiencing a losses may always be happen. It is also a must that we know how to do our own technical analysis, to have our own research and study the crypto that you are willing to trade or invest because from here you can measure what kind of risk management you must take.

[Kelvinid]

This signifies how crucial it is to save your capital. Trader must always choose a lost opportunity over lost capital because growing back capital is certainly impossible because it not only breaks your finance but also breaks you emotionally. You get self doubts and start to get tons of second thought about trading which eventually hurt your trading even more.

If that you can never think about good and being proactive with your losses, it surely gives you no hope to recover your losses and expect more to come. if that only we can see despite everything and hard works, it is better not to trade anymore or look for another opportunity. Because the biggest challenge in crypto is how to control our emotions and it is a part of risk management. If we are not capable to change that then there is no reason we should have to continue this thing because we are just going to nowhere.

[SquallLeonhart]

Even how good a person is in predictions, in trading, gambling, or in investing as long as he doesn't know how to manage the risk he was willing to take experiencing a losses may always be happen.

Yes agree. Accuracy on prediction may get voided if we are not good in risk management. It is kind of you may get good entry points but if you are not good in risk/reward managing then when you enter with lots of positions then you may get liquidated even for a small market correction. So, all your skill in analyzing market may end up in vain if you are not good in risk managements.

it is better not to trade anymore or look for another opportunity. Because the biggest challenge in crypto is how to control our emotions and it is a part of risk management.

I guess setting up daily limits may help in that scenarios. You may go for recovering only if you are left with your limit for that day; if not you must stop for the day and may continue on next day with all new mindset up. There are lots of aspects are being covered under risk management which includes emotion control and sticking with plan as well.

[Ararbermas]

Therefore, before we enter cryptocurrency trading, we must be able to understand what risks will be faced, not only understand but must be prepared to accept the reality, because trading will not be smooth forever, there will be profits and losses.  as Op says it is more difficult to recover from losses because we will indirectly trade emotionally because we are more concerned with the funds we spend to get them back.

of course definitely.. Actually at first if we will take this causes seriously. Probably we all can manage all the risk when it comes trading.. And for sure there are no complainant how risky this thing is. But unfortunately some ppl nowadays are relying only to some stuff around the internet and didn't even scared of what will happen afterwards despite of being careless on what they have.. "trade what amount you can afford to lose" this line seems a joke for everyone nowadays especially beginners..

[trigger1975]

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.

Amen!

[AicecreaME]

Risk management allows us to manage our losses, on how we are going to deal with it, without risk management, we will have a hard time on making decisions on how to deal with our losses. To make this simple, for example is you enter a trade with a $50 on it, but you lost it.

Now, most of the traders would do is to enter a trade with a $100 so when they win, they'll have profits instantly, a high risk, high reward move. However, the most safest way for it is to bet lower than $50 and slowly recover your losses, because losing the $100 will just make your loss even more big.

[Kittygalore]

Risk management allows us to manage our losses, on how we are going to deal with it, without risk management, we will have a hard time on making decisions on how to deal with our losses. To make this simple, for example is you enter a trade with a $50 on it, but you lost it.

Now, most of the traders would do is to enter a trade with a $100 so when they win, they'll have profits instantly, a high risk, high reward move. However, the most safest way for it is to bet lower than $50 and slowly recover your losses, because losing the $100 will just make your loss even more big.

That depends on the risk tolerance of a person, if they have a high risk tolerance then probably the risk management for them will be different. But if you are not one, I agree with what @AicecreaME says here, take it slow and you will arrive there eventually.

[Vaculin]

You can appreciate this thing when you are in the actual trading and when you are in the difficulties. Because this will simply help and guide you for a better and acceptable trading output.

yeah, never finds it so easy and it really needs the effort to do that. But I believe that everyone can do this if we are willing to help ourselves and free ourselves from suffering huge losses. We usually lose from trading it is because of having a lack of self-control, we make a decision without basis, that is not to wonder why we got this easily. 

[quins]

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.               

Wow is so great, actually it so risky to invest in newly people as a trader, but we can learn if lose.

[geegaw]

Risk management allows us to manage our losses, on how we are going to deal with it, without risk management, we will have a hard time on making decisions on how to deal with our losses. To make this simple, for example is you enter a trade with a $50 on it, but you lost it.

Now, most of the traders would do is to enter a trade with a $100 so when they win, they'll have profits instantly, a high risk, high reward move. However, the most safest way for it is to bet lower than $50 and slowly recover your losses, because losing the $100 will just make your loss even more big.

Indeed, risk management is a system built on the actual needs that we want, removing emotions to complete a certain action, what will be shown here will be the future moves, the strategies we must do to the success or failure of the market, the commands here are absolute and irreversible under any circumstances to maximize the meaning of this system. It sounds quite simple, but most of the time, the user mentality breaks the system's rules very often, they are not afraid of punishment, they accept a greater price to maintain their profitable opportunity

[michellee]

Risk management allows us to manage our losses, on how we are going to deal with it, without risk management, we will have a hard time on making decisions on how to deal with our losses. To make this simple, for example is you enter a trade with a $50 on it, but you lost it.

Now, most of the traders would do is to enter a trade with a $100 so when they win, they'll have profits instantly, a high risk, high reward move. However, the most safest way for it is to bet lower than $50 and slowly recover your losses, because losing the $100 will just make your loss even more big.

That depends on the risk tolerance of a person, if they have a high risk tolerance then probably the risk management for them will be different. But if you are not one, I agree with what @AicecreaME says here, take it slow and you will arrive there eventually.

Risk management is the important key to success in trading, but many do not know how to manage it. But I agree with @AicecreaME that if we use a bet lower than $50 and try to recover the losses while still having the rest amount, that will be a backup for us. We can only use small parts to trade and try to make a profit and if we can do that, we can only rinse and repeat the process to make a bigger profit. Do not chase bigger profit if the market is not moving good.

[kolbalish]

Risk management is really important for every trader since we are dealing and working in a highly volatile market and we do know that risks are associated with working into it. Practicing how to manage certain risks will help you out as a trader to make your losses lessen and not be dragged down even further. Being able to deal with 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 into 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 the possibility of greater losses so you can still have something to start with and will not end up empty-handed.

Wow, that's stunning. You have explained this matter in extremely fluent terminology, Risk Management. Trade is a place where no one can attain without risk. Trading means risk investment. So it is very important to have this risk management. Only with risk management can that circumstance be avoided. And if you grab a step in a rush, that is what provokes danger. So you constantly have to deal with the situation calmly, and the system to handle this is risk management.