Why risk management is so important for Every Trader.

[adzino]

It is very important. Without risk management you will be "careless". And being careless never ends up being good. Trading is very risky. You can't always expect to make profit. And when you trade, you may make profit or a loss. Risk management won't increase your profit, but it will in most of the cases help you to reduce your loss. Without risk management you might lose everything you have. Risk management helps you to think about the future and what you wish to achieve. So if you don't have any risk management, it's like you don't even know what your end goal is.

[1714481477]

1714481477

[Stedsm]

@OP, risk management is definitely a term a trader must keep in his mind in order to get more gains over losses as if the risk:reward ratio is not understood before entering a trade, then that trade may end up sucking out everything from his balance if he goes all in without any stop loss. Also, it's better to trail your stop loss and keep it very near to the ongoing price (if your position is in profit), so that even if the market tries to move against you, you won't suffer losses but will end up in profits.

[carlfebz2]

@OP, risk management is definitely a term a trader must keep in his mind in order to get more gains over losses as if the risk:reward ratio is not understood before entering a trade, then that trade may end up sucking out everything from his balance if he goes all in without any stop loss. Also, it's better to trail your stop loss and keep it very near to the ongoing price (if your position is in profit), so that even if the market tries to move against you, you won't suffer losses but will end up in profits.

Those are already on the technical side of things which you would sooner or later to be discovered on when you do gain gradually some knowledge on your trading career.

You would really be needing that risk management because you can able to balance out on what should be the actions that you should make for you to make that efficient way of trading.

This would involved really lots of trials and errors because these kind of state cant really be achieved if you dont have able to experience it and risk management thing is
something the most major factor for you to sustain yourself into this very unpredictable market.

[dezoel]

That aside, I think anyone that wants to be a trader needs to be sure that they learn the trading and be good at it before they go for it. Imagine knowing risk management and your trading skills are still zero and whack, and you’re still losing most of the times , even though you’re preserving it and not losing much, it still doesn’t make any sense because you’re still losing.

So, it is good to put yourself in check and be sure that trading is meant for you and you’re good at it, then also learn risk management and you’re good to go. When you stop a loss you are able to make back whatever you have lost within a short time.

[SacriFries11]

It is very important. Without risk management you will be "careless". And being careless never ends up being good. Trading is very risky. You can't always expect to make profit. And when you trade, you may make profit or a loss. Risk management won't increase your profit, but it will in most of the cases help you to reduce your loss. Without risk management you might lose everything you have. Risk management helps you to think about the future and what you wish to achieve. So if you don't have any risk management, it's like you don't even know what your end goal is.

Without risk management is not trading it's already gambling. I remember in early days in trading, I disregard the proper way and not even use risk management, with just 2-days, I already lose 30% of my capital and exit the trade. Being greedy also is one thing that you must not apply in trading, 10-30% is already good profit and not aim for the one time shot that make you rich. I always trust the process and proceed to other trade after I won the trade. Consistence is also the key, always happy with you're wins.

[RondoAnyar]

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.               

but sometimes new people think of crypto as a good business. but believe me they don't have good management to be in crypto, they just rely on speculation and end up losing. There are so many incidents of loss from new people and they end up regretting it

[RealMalatesta]

sometimes new people think of crypto as a good business. but believe me they don't have good management to be in crypto, they just rely on speculation and end up losing. There are so many incidents of loss from new people and they end up regretting it

New people are obviously lagging in experiences hence there will be no wonder on their view on crypto trading. The real wonder is even experienced traders are looking into crypto trading in similar manner and then losing all their capital unconsciously.

Risk management is vital in trading for profitable trading and whenever we fail with it, we will lose the trades. Losing trades and then regretting will not change the things, naive traders must work on fulfilling where they are actually lagging. Instead of regretting, I must say to accept the losses but learn something out of every trading and try to not repeating the same mistake which eventually lead to good risk management over the time.

[MIner1448]

Very competent words, I will take note of:) risk management is of course important in our difficult business, where it is necessary to assess our risks constantly and make the right decisions, this will lead to an increase in our assets in the world of cryptocurrency. I do not always assess the risks in a particular transaction, sometimes emotions take their toll ... Of course, I try to fight against this.

[iv4n]

Very competent words, I will take note of:) risk management is of course important in our difficult business, where it is necessary to assess our risks constantly and make the right decisions, this will lead to an increase in our assets in the world of cryptocurrency. I do not always assess the risks in a particular transaction, sometimes emotions take their toll ... Of course, I try to fight against this.

Risk management is very important whenever we deal with money! This thread is a nice example of how risk management is applied to trading! And people should be aware of this if they plan to trade and make some profit!
You are more than right when you say how emotions take their toll in specific moments! I think that happens to most of us, just rare people are capable of completely removing emotions even when things get hot, and in trading "hot moments" happen often!

[Sled]

Very competent words, I will take note of:) risk management is of course important in our difficult business, where it is necessary to assess our risks constantly and make the right decisions, this will lead to an increase in our assets in the world of cryptocurrency. I do not always assess the risks in a particular transaction, sometimes emotions take their toll ... Of course, I try to fight against this.

Risk management is very important whenever we deal with money! This thread is a nice example of how risk management is applied to trading! And people should be aware of this if they plan to trade and make some profit!
You are more than right when you say how emotions take their toll in specific moments! I think that happens to most of us, just rare people are capable of completely removing emotions even when things get hot, and in trading "hot moments" happen often!

That is why we never say that all people had come into trading will succeed for the reason that not all of them are willing to control themselves but rather be controlled by their emotions. Yes, it is likely we fully manage to control our emotions but in a certain thing, we should have to do.
We definitely don't understand how Risk Management is important in trading if we aren't able to put it as a serious deal. We can appreciate it much once we applied it IRL which is the thing we supposed to do otherwise, we will no longer reach our goal but just a failure.

[justdimin]

We definitely don't understand how Risk Management is important in trading if we aren't able to put it as a serious deal. We can appreciate it much once we applied it IRL which is the thing we supposed to do otherwise, we will no longer reach our goal but just a failure.

Risk management itself is a serious one but we traders are treating it in other way.
The importance of risk management is being learned by most traders only by experience after lots of losses but the actual thing should be they must learn from books and videos so that they never need to face any losses to learn the importance of risk management. I mean we are learning it by costing something big and by wasting time.

Without risk management, we cannot find profits at the same time if your making profits without realizing the importance of risk management then you cannot sustain at same level of profits as one day or another you will start realizing along with losses -- that is from my own experiences.

[taufik123]

Risk management is one of the important things that the trader should do as a habit, Doing risk management needs good control of emotion, especially in critical times like having a losing streak. Risk management could help you recover the losses but when emotion got messed up, The process that you executed will do nothing.

Risk management and emotional control are two things that are interrelated and cannot be separated.
Trading success depends on how to manage risk properly and how to control emotions that must be done. We have to stay calm to think of a strategy to do next.

Emotional control will usually be trained when experiencing continuous losses. We have to stay calm no matter what. don't do anything stupid.

[GeorgeJohn]

Risk management is a very important aspect of trading that most traders could easily ignore cause of the urge to make fast money. Like we all know that slow and steady wins the race but human greed is a very big factor one has to fight and overcome cause every individual has little or much of it beneath us especially, with strategy that is giving high returns. One can always be tempted to use high risk to reward ratio.

We all want to make money but the pace is always different from one trader to another. So the need for risk management analysis is very important in trading to safe one from unecessary risk that can affects our trading psychology. It also help one to be discipline and conscious on how to use leaverage to trade successfully without over trading.

[milewilda]

Here are some good links to read up about risk management and im sure this one would be helpful.
Risk Management Techniques for Active Traders
https://tradeciety.com/why-most-traders-lose-money-risk-management/
https://www.xtb.com/en/learn-to-trade/introduction-to-risk-management

Spending some time to read up wont really require much hard work and time spent.

[BitTraderCute]

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.               

but sometimes new people think of crypto as a good business. but believe me they don't have good management to be in crypto, they just rely on speculation and end up losing. There are so many incidents of loss from new people and they end up regretting it

they just thinking about profit and never about loss. i see there are alot beginner in market, they were attracted while they see their friend get alot money and thinking this is be fastest way to earn huge money. hype and fomo be reason when they come here.

[enawati]

When I decide to holding coin for long term, I prefer to learn more about the fundamental and the trend of the market without stop loss. Actually knowledge how to predict the trend of market is more important because that will trigger all crypto turn to bullish. Stop loss and trailling stop is necesary to use it only for day or swing trading. And for holding, the risk management and strategy that i use is Dolar Cost Averaging.

[feelideb]

When the going is good in cryptocurrency market, you rarely think of huge risk you are taking when you enter a postion base on sentimental reasons and market situation! It is important to make sure that your risk / reward ratio is moderate! It hard to recover losses than preserving capital!

[Yamifoud]

It was very important because that will helps to save your money and to avoid losses. It a big asset in handling your investment, without having any single knowledge on how to manage risk, the closer you will end up losing. Learning about his matter is an investment, yeah, many people had spent their time studying and learning about this and you know what? They will succeed.

I think you need to read this...
https://searchcompliance.techtarget.com/definition/risk-management

[andriarto]

When the going is good in cryptocurrency market, you rarely think of huge risk you are taking when you enter a postion base on sentimental reasons and market situation! It is important to make sure that your risk / reward ratio is moderate! It hard to recover losses than preserving capital!

taking into account the risks and rewards in trading is needed every time we transact. By knowing that, we don't just focus on profits which can sometimes be depressing because we are too sure of the analysis. with the calculation of risk, then we can think logically, that in trading we must dare to accept losses if our analysis is not appropriate.

[Maslate]

It was very important because that will helps to save your money and to avoid losses. It a big asset in handling your investment, without having any single knowledge on how to manage risk, the closer you will end up losing. Learning about his matter is an investment, yeah, many people had spent their time studying and learning about this and you know what? They will succeed.

I think you need to read this...
https://searchcompliance.techtarget.com/definition/risk-management

We can't simply ignore the use benefits of risk management in trading. Some just don't mind it while many were busy learning about this. Well, of course, it can't be really appreciated at first but in the long run, we discover its importance especially when the crisis has come. So, it is much better to spend time learning with this while trading and to see what it could help to improve our trades.