How do you manage risk in crypto currency

[Rengga Jati]

Please I want to know the risk management in cryptocurrency an how to calculate them for both investor and trader.

Managing risk must include a number of things that underlie it. Maybe we have learned how to manage risk well, however, one of the things that underlies it is knowledge and also our ability to control emotions. because, no matter how good our risk management is, when we have not been able to manage or control our emotions, sometimes we go beyond the risks we have managed because of our greedy nature and our curiosity, and in the end sometimes we panic ourselves because of our worries.

Knowledge is also very mandatory so that we are able to sort out information and various things that need to be learned. This knowledge will later also support our risk management to be better and wiser. At the very least, risk management is also related to money management, where the thing that we have to do is to manage money so that it is according to our ability to invest or trade, not according to our wishes, but abilities that we can control and afford to loose.

After at least the things above can be done, then we can start managing risks, which can include which coins we should choose for trading or investing, because maybe we will need different coins for both, depending on the type of coin and the target achievement. Apart from that, our ability to analyze the market is also one of the things to manage risk, at least we know at what price we can at least buy and sell it. We can know this if we understand enough about some analysis both fundamentally and technically.

Yes, it is not easy to have proper and good and wise risk management, but as long as we are willing to learn from anywhere, then we might be able to do it. especially if we are able to take various lessons from our own experiences and those of others.

[Mate2237]

Please I want to know the risk management in cryptocurrency an how to calculate them for both investor and trader.

Op it is just a simple arithmetic, the risk management in any business is paramount. There are some homework you have to do before investing. You have to know the risk ahead and also the profit which is out come at the end of the investment. Those are some the calculated risk an entrepreneurs are saying. Now investment you to monitor the market and invest in it when the market is on bear. Purchase your crypto when the market is low so that when the market goes up you can sell it and wait for a bear market again or after selling them in the bull market, you can switch over to trading to avoid spending of the Capital while waiting for another bear market.
While for trading, the risk management is just like the investment but there is slide different. In trading you can buy at anytime buy you ability to monitor the movement of the market to make profit is the major issue. You can set a time frame for the trading, daily, weekly, or monthly. Most of the time I use weekly. All depends on your schedule.

[pixie85]

It's impossible to calculate because the price is heavily manipulated. You'd also have to take into account the possibility of a black swan event like covid or FTX.

I don't manage risk because I don't trade and I advise you to do the same. I invest and acknowledge that it can take another 5 years before there's any profit. I'm ready to wait up to 10 years, but I'm sure bitcoin will get me in a much better financial situation than holding my money in the bank with 10% inflation would. 

[erep]

It's impossible to calculate because the price is heavily manipulated. You'd also have to take into account the possibility of a black swan event like covid or FTX.

I don't manage risk because I don't trade and I advise you to do the same. I invest and acknowledge that it can take another 5 years before there's any profit. I'm ready to wait up to 10 years, but I'm sure bitcoin will get me in a much better financial situation than holding my money in the bank with 10% inflation would.  

We are not able to calculate the risk because we are not involved in trading altcoins, maybe a lot of investors' losses are affected by the previous investments of FTX and Luna.

But I commend your investment strategy for long-term gain, I think there is no need to hesitate for the price of bitcoin in the next 5 years, you must have diamond hands to hold assets unaffected by any news, make sure you allocate investment funds that are capable of long-term investment..

[Rockson1]

Risk management in crypto currency, position size calculator for crypto currency,the most important part of trading strategy. Without it you risk losing all your equity. This calculator is a great tools for any new or expert crypto trader for example formula 1 crypto account size-this is the total USDT, bitcoin,erhereum or any other coins you use for trading.
2 Entry price-this is the limit price at which your trading tell you to go either long or short team.
3 stoploss price-this is the  price of your first stop loss to get hit of the position if it goes against you if you don't know where stop loss should be it will show us how to determine your crypto stop loss.
4 maximum risk-this is the maximum risk in percentage that you are willing for each trade example risk between 0•5% and 1•5%.strategy, 0•5%-1•5% will keep your equity safe from the high volatility of the crypto market. Let's see example below for long position for BTC/USDT.
Account size,1000 USDT
Entry price, 30,000 USDT
Stop loss price, 28,000 USDT
Max risk %,1•5%
(1000×(1•5×0•1))/(30,000-28,000)×30,000=225 USDT
Let's take it apart,
Account size(max risk %×0•1))(1000×(1•5×0•1))=15 USDT, this is the maximum amount that we are willing to risk on the trade.
(Entry price-stop loss price) (30,000-28,000)=2000 USDT,2000 USDT is -this is the amount we would loss if our stoploss was hit and we had bought a full BTC.
(Account size(max risk %×0•01))/(entry price-stoploss price)
15/2000=0•0075 this is the only amount of BTC that you should buy in order to only lose 15 USDT (1•5%of your account size) if your trade hits the stoploss.
Account size (max risk %×0•01))/(entry price -stoploss price)×entry price 0•0075×30,000=225 USD multiplied by the amount of BTC you want to buy.
Here is the source here