Risk management depends upon when will you expect to exit. If you have risk management, you will look for risk of ruin over than taking of profits. If you can see that your risk is greater than your profit then do not buy the specific coin unless you will see a momentum trade.
2% rule is somehow a guidance for us that our biased did not materialize. Therefore, if we are lose at 2% in our portfolio then we cut it fastly.
Topic: 2% trading strategy, can this be applied for crypto trading? (Read 563 times)
I think 2% limit is safe to cut losses in investment, but you can not always wait to see 2% and cut losses. This will make you tired when you have to sit on the computer 24/24 and can not place orders correctly.
For the cutloss target it is very efficient but the profit target for 2% is very small. And it's 20%-30% is very efficient for profit. The target is very must for trading that is just so not get loss very deeply
i think that if 2% is a daily target, that is big enough. but if the trader is enough with 2% profit for 1 month, of course it is a safe trade. where it is not hard to reach target 
yeah, this Cryptocurrency trading strategy is very feasible to try, the 2% profit per day is already normal rather than having to wait 20% to get an uncertain profit, but depending on whether the trader wants to use this strategy or not,
OP doesn't mean 2% profit but 2% of his total capital that he would be trading at a time. It is a good strategy because your emotions would not be that compromise if you see that the trade doesn't go your way. Besides that, you can buy more because you are left with 98% of your capital so you can buy on the way down and then be able to profit when the price goes up.
However, this strategy is only ideal if you have big capital because if you have a small one then 2% might be too small that it is even lesser than the withdrawal fee. You should find your own strategy then which would be fitting to your capital.
yeah, this Cryptocurrency trading strategy is very feasible to try, the 2% profit per day is already normal rather than having to wait 20% to get an uncertain profit, but depending on whether the trader wants to use this strategy or not,
OP doesn't mean 2% profit but 2% of his total capital that he would be trading at a time. It is a good strategy because your emotions would not be that compromise if you see that the trade doesn't go your way. Besides that, you can buy more because you are left with 98% of your capital so you can buy on the way down and then be able to profit when the price goes up.
However, this strategy is only ideal if you have big capital because if you have a small one then 2% might be too small that it is even lesser than the withdrawal fee. You should find your own strategy then which would be fitting to your capital.
For the cutloss target it is very efficient but the profit target for 2% is very small. And it's 20%-30% is very efficient for profit. The target is very must for trading that is just so not get loss very deeply
While browsing investopedia, I read about 2% rule where you will limit your loss to only 2% of your total capital.
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
It is a method I previously used for my foreign exchange investments, but I cannot say that I use too much in the cryptocurrency sector. As there is more volatility in the cryptocurrency sector compared to other investment instruments, the rate of 2% will be quite low, which may be true investments. However, as I have stated, I think that this ratio should be used more in this sector since this ratio is quite insufficient both in terms of profit margin and loss. This ratio should be determined by the investor completely and should not be too high due to the high risk of the sector.
While browsing investopedia, I read about 2% rule where you will limit your loss to only 2% of your total capital.
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
I think " hold " and gain 20% is for people who use investment strategy not trading, specially day trading. Wrong rules can make you loss so please think again to set your stop loss and take profit point. You can use any gain ( % ) in your setting but I afraid must fit with your strategy. I believe 2% is possible for daily trading but in down trend investment strategy is more helpful.
September 30, 2018, 08:40:20 PM
yeah, this Cryptocurrency trading strategy is very feasible to try, the 2% profit per day is already normal rather than having to wait 20% to get an uncertain profit, but depending on whether the trader wants to use this strategy or not,
OP doesn't mean 2% profit but 2% of his total capital that he would be trading at a time. It is a good strategy because your emotions would not be that compromise if you see that the trade doesn't go your way. Besides that, you can buy more because you are left with 98% of your capital so you can buy on the way down and then be able to profit when the price goes up.
However, this strategy is only ideal if you have big capital because if you have a small one then 2% might be too small that it is even lesser than the withdrawal fee. You should find your own strategy then which would be fitting to your capital.
September 30, 2018, 08:32:28 PM
yeah, this Cryptocurrency trading strategy is very feasible to try, the 2% profit per day is already normal rather than having to wait 20% to get an uncertain profit, but depending on whether the trader wants to use this strategy or not,
September 30, 2018, 07:41:41 PM
While browsing investopedia, I read about 2% rule where you will limit your loss to only 2% of your total capital.
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
limit losses to only 2% I think it's very difficult, it's done only for professional traders. for beginner traders it might be possible to be at a price at the top point, so I think losses can be determined if you look at real market conditions.Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
September 30, 2018, 02:32:59 PM
While browsing investopedia, I read about 2% rule where you will limit your loss to only 2% of your total capital.
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
limit losses to only 2% I think it's very difficult, it's done only for professional traders. for beginner traders it might be possible to be at a price at the top point, so I think losses can be determined if you look at real market conditions. Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
September 30, 2018, 11:26:37 AM
Do you mean 2% for stop loss ? With high volatilitas of crypto, i think that too small percentace in crypto trading, for the better use minimum 3% to 5% for stop loss and take profit minimum 10%. Stop loss 2% can be better to use in stocks trading that has lower volatility than crypto.
2% trading strategy is not about stop loss, but a way to manage your funds when trading.As long as you are trading a market and you want to enter a position, it is a normal way of saying you should not use more than 2% of the total amount you have to go in on that trade. That is one thing a lot of people always fail to do anyway and they either go all in, or just do whatever they please when going in on the trade which makes the outcome horrific at times, when things should not go in their favor.
With respect to stop loss, as long as you are not having a higher loss to lower profit ratio, then you are good, so in that case, you always set your own risk when it comes to stopping loss.
September 28, 2018, 03:33:54 AM
Consistently making 1% daily, that is impossible, like I said, on some days you are better off just holding. But the next week when one of your coins get a 10-20% bump up, you'd have made up for the "boring" days.
September 28, 2018, 03:31:33 AM
Little pig eats a lot, big pig gets eaten. This statement tells you the story of profits from our perspective. To be a profitable trader, you never fall for the hype or try to hit a homerun with one trade. You look for the small profits that will compound as you reinvest them.Even small profit like 1% daily (I get it, this is unreasonably high, but for crypto - 1% daily is very much achievable if your portfolio is diversified within the top few coins) can help you accumulate significant profits over months.
September 27, 2018, 04:40:59 PM
Yes, this can be applied for crypto trading. There is some misunderstanding of the rule, usually. If you buy a coin without a stop loss (which is OK), then you risk 2%. If you open a position for 20% of your deposit and put a stop loss order on 10% this is the same rule. This doesn't mean that you use 2% of your capital, this means that you don't lose more than 2% on a trade
September 27, 2018, 04:32:54 PM
They may have written as a recommendation, not as a rule. This rule should belong to the cryptocurrency. People who have no knowledge begin to trade without calculating the volatility and have no good results.
September 27, 2018, 03:19:17 PM
While browsing investopedia, I read about 2% rule where you will limit your loss to only 2% of your total capital.
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
Will this be applicable to crypto market? I always believe that you should wait for stock/crypto to gain atleast 20% to lock the profit but the 2% rule seems interesting.
Any insight? Anyone using this strategy?
the 2% rule means you don't risk more than 2% of your account on any one trade. if you have $100k, you don't risk more than $2k at a time. it's definitely applicable to crypto. it's a basic risk management strategy that hedges against variance.
even if your trading system is profitable, you could have a run of bad trades. if you trade 20% of your account at a time, you could blow up your account and lose your shirt after only a handful of trades. the 2% rule allows you to survive an unlucky run, and live to trade another day.
the opposite approach is the "all in on every trade" method that's so popular with crypto traders.
September 27, 2018, 03:09:51 PM
Well it depends on yourself, it can be a good strategy to put a 2% stop lost, for me it's not too suitable,the reason is because crypto got a high volatility the 2% of lost can be easily happen and the bounce back again,it maybe a good strategy for stock but for crypto maybe the stop lost is too near
Same with my understanding and personal experience, 2% can be happen in a blink of an eye inside crypto market, you loses right away and bouncing back much stronger won't let you recover but gained regrets, I guess there's a strict needs of practices before we can stick with any strategy that we haveread, experience will allow us to be more flexible and always ready to change pace whenever things is not working according to our plans.
September 27, 2018, 02:57:51 PM
Well it depends on yourself, it can be a good strategy to put a 2% stop lost, for me it's not too suitable,the reason is because crypto got a high volatility the 2% of lost can be easily happen and the bounce back again,it maybe a good strategy for stock but for crypto maybe the stop lost is too near
It does depend on the type of coin you plan to trade as well, but why not just have a more flexible range that you adjust based on the coin and the market situation? It grants you way more freedom to ride out waves.Crypto forces you to be flexible, otherwise you'll be working against the market, and believe me, people burn themselves doing that. That being said, pot stocks are just as volatile in the more recent months.
It's insane how even the security triggers halting trading can't prevent the market to adjust itself to the craze happening there, which clearly points out that there is a lot hype related retail money involved there.
Imagine how many shorters have rekt themselves by shorting pot stocks during their prime days.
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