Topic: Cleo.finance: How to avoid crippling losses when trading? (Read 830 times)

The article is from a trading platform's blog and the post is a summary of an article about position sizing.

Precisely and also not all losses are equal.
There are losses taken in accordance with your trading plan by setting stop losses and protecting your funds from further, larger losses.
And then there are losses that are taken out of panic, fear, and a result of deviating from the trading plan.

every trader must have a strategy to minimize the risk of loss. if you are day trading, of course, it requires better skills in trading. but it also does not reduce the risk of loss that we can get.
some traders if they experience loss problems due to market fluctuations, make short-term hold plans while waiting for the market to fix prices. or instead buy the asset when it declines and hold it long term to cover losses from the trade.
everyone has a different way. but I usually choose to hold the asset and wait for a better market moment.

There will definitely be losses in trading, but using the basics of risk management correctly, you can reduce the size of the loss. In this case, in order for our trade to bring us profit, it is necessary to compensate these unprofitable deals with profit from successful trading deals.

To have good pose on trading we must have proper knowledge about fundamentals as well as with the news happening because from this for sure we can set our plans and stick with it. Because if we just trade around without having good plans set for the day for sure we lose because we want more profits together the probability to get hype by situation like thinking about getting more if the price will pump or even to recover if market dumps.

to be honest it is very difficult to avoid losses in trading, because the crypto market is very volatile,
even using technical analysis also often experiences stop losses, this is why trading in cryptocurrencies is much more risky than forex,
if you still don't understand it then stay away crypto currency trading.

after planning or analyzing and placing targets and stop losses, then we must have good psychology to launch the framework that we have created, because we know psychology has the biggest role in determining trading success. Without a good mentality, it is impossible for us to carry out the plans that have been made. Therefore, many people who are good at analyzing but lose because they do not have a good mental attitude, so there is greed and haste to respond to the market, due to psychology that has been disturbed so that they cannot think clearly.
after we place a transaction, there are only 2 market reactions up or down, and the final result we leave to God, our job is only to manage risk in trading, sometimes loss is unavoidable, but we have to get a bigger profit, because as far as I know there is no traders who always profit, especially with the smaller time frame used

I guess, purchase when the price is low in the market will really help you to avoid losses in the crypto market, because it's the best time many professional investors used to purchase some potential coins and hold for the bull season to come before they can sell to make a good suitable profits from the market. And sell when the price is high is another way people used to avoid losses in the market, because when you release your coins in the bull market, it will really help you not to involve in losses in the market.

Making loses is inevitable in trading so we should to plan not to lose but for or loses to be lesser than our profits which is the reason why making traders are still trading till today while many had left trading because of continuous loses that had crumble there financial status.
Every traders always chose to make continuous winning but the market can be so tedious that we don't even know what to do or how to set our trade in a way that we will make better profit from what we do. Let's plan to always make sure that our profits is greater than the loses.

When you do set out too shallow SL's then it would really be easily triggered out considering volatility level of certain coins then it would really be just too easy for it to be triggered.
I do agree on what you are saying specially people who do make out short trades who do really set out these limits but honestly, it isnt really that too necessary
if you are really that active on checking out price from time to time.

There are several indicators or tools which you could really make use and just what most people been saying on here that this is really just a matter of
mixing up various indicators and find for yourself on what do really suits you up.

Precisely, every trade needs a bit of “wiggle” room. Tight stop loss means you will drain your account faster and too loose stop loss will make it impossible to succeed.
There is no one size fits all. I usually try:
- S/R line
- My favorite MA
- ATR indicator

The cryptocurrency market always goes up and down. But sometimes there is a situation in the market that the price is very decreasing more than the price at which we bought the token. And just then we eat los. And if you want to avoid this loss, you must use stop loss. The reason to use a stop loss is if you are worried about the token you bought and think it will go down further.One advantage of using a stop loss is that using it will reduce the loss rate, but by changing the stop loss repeatedly, you can increase the profit rate.

They do not really need to know that exactly, all they need to know is they need some sort of reward at the end, yes risk to reward ratio is important but if there is a small reward then it doesn't matter even if the risk is little, hence it makes the rrr a mute point.

However, if there is a good reward then you can take a look at the risk, because even for something with a huge reward potential, you could literally end up with a too big of a risk so it would start mattering there. I personally believe that understanding the fundamentals of a project, and then making decisions based on that would be much better for the long term, but that is of course my idea of how to make an investment.

That RRR is not known by most people and to be fair in crypto world it is not clearly indicated neither, you do not really know it. Like when you are stock trading you could look at how much cash they have, what's their revenue to profit ratio, look at the ownership and how much institutional ownership they have, you could look at the debt, and the personal number and many other things.

These data will show you if it is worthy of investment or not and it would show you what would be the risk of something like that. But in reality, crypto doesn't have these and we could have a great news today and end the day with 30k or have a terrible news and end it at 10k, it is wild and volatile.

But surprisingly there are people whom do really believe that there are people who could make up some trades without any losses which is really something a bullshit belief of someone which they could possibly able to attain it but once reality would slap into their faces then this is where realizations do happen.
Money management and risk handling would be the main things that you should need to get serious on because these are things which would really help you out on at least lessening
the possible losses if you do know on what you should gonna do with these times.
Be prepared and always set plan B's whenever your plan A had failed.

I like the way OP titled it, "crippling losses" indicating that they're in the know that one can't completely escape losses in trading. It can only be mitigated but not completely ruled out. In fact, loss is a major part that makes trading what it's; an excitement. Otherwise, it would be an all comers' affair. Every trader should know the relevance and place of Stoploss (SL) and Money Management (MM) in trading. Those two are unarguably account savers. The real trading begins with them.

To avoid losses during trading it is important that you know about cryptocurrencies. To avoid losses it is important to choose coins that have a strong project and an experienced team.Coins should always be bought at low prices. The support and resistance points of the coins should be known. Stop loss should be used to minimize the loss. You should keep an eye on the news of the tokens you are investing in. Always buy the top ranked coins.Coins with high volatility, low circulating supply and high market volume should be bought while trading.In case of falling market should be patient and hold the coins because after the bear market there is always a bull market. But the condition is that your choice of coins is right.

And also it is better to ask yourself “Is the profit worth the risk? What’s my RRR?”

The majority of traders tend to focus mainly on timing the trade's entry perfectly, while proper risk management and position sizing is an afterthought.

For me to operate without having many losses, what must be followed is the basics, put the Stop Loss first, because we have to protect our money, if it is done that way I think we are telling us, that if the price comes in We are against, it does not matter, that the stop loss is jumped and we assume the loss, otherwise if the price goes up, what we have to do is keep moving the stop loss and keep winning, I think that is a very simple way to win, but you have to have a lot of experience not to lose.

If you are really that dedicative on pursuing your goals then losses and failures wouldnt really be a hindrance for you to stop just because you had experienced unfortunate events but for those who are dedicative

or trying out to pursue their goals then they are the ones who do able to sustain for too long.Im not saying that they arent making themselves get affected yet we are just humans and seeing our investments
failed or have losses then its normal to have these kind of reactions which not all would really be that having that kind of mindset or behavior.

Some do sustain and some do fail and eventually quit which it does really depend on personal goals and mindset and handling out on particular conditions whether you do
survive or completely stop.

True, however there are three conditions necessary for us to learn from our mistakes, the first one is that the mistake needs to be small, as even one big mistake is enough to destroy your account, and if that happens regardless of what you learned most likely you will never become a successful trader.

The second condition is that we need to keep detailed records about our trades, after all it is very easy to repeat the same mistake if you cannot identify that you have found yourself in the same position already in the past and that you already made a mistake when dealing with it.

And the third and final condition is to be humble enough to accept there is still something we can learn, this is important as there are many traders that feel they know it all, and if that is the case then there is nothing left for them to learn, so only those which admit their own shortcomings have any ability to learn from their mistakes.

Making losses is fine, not letting them get to us is the real treasure in the trash. If we could keep our heads high and keep on doing something that is profitable for the future, then we will be fine. Those losses should become our school books, we should be able to learn from them so well that in the future when we are about to make a mistake, we should remember the mistakes we did in the past and avoid doing them again.

This isn't hard, sometimes you make the same mistake two or three times or even maybe more before you learn to avoid them. But as long as you learn, and you do not make it again, they are still our lessons and they are valuable.

I agree with this one, definitely you have a point there. Overall long-term investing or any frequency of trading regardless of having stop loss, risk management matters I think. How you diversify your investment, what chart you are monitoring, fundamentals and technical analysis, your size, capital and money management are all related to risk management.

“When you combine ignorance and leverage, you get some pretty interesting results.” - Warren Buffett
To avoid the "interesting" result when trading with leverage;
-Always use stop loss
-Use take profit, don't be greedy
-Spot and stop overtrading
-Start Small and grow

This is how I try to minimize my high risk and capitalize on gains when using leverage.

mistakes in the past being the best teacher, an experience that should really make us able to avoid the same problem. It takes several tries to avoid the same problem, every trader has their own strategy, but what is certain is that avoiding losses is something that must be done. We also have to have control over the trades that are being made, lest the traders only get losses.

When would be best suitable to carry out this tips,in other to avoid big losses, perhaps, losses are also signs and symptoms of trading.
Large amounts of cash will be spent of such tips and techniques as much I know do one can successfully get enough profits from it.
Best market for this would be in. ? Bear market! And also what worked for for might not work for another trader. Good article OP.

That type of struck and "do not get out of your way for no reason" mindset is not an easy one, of course it is not impossible but it is not an easy one neither, that takes a while for most people and we should not be hoping for something like that anytime soon neither.

I believe that the best thing we could do is learning how to make mistakes, and learning why we made those mistakes and then trying to make those mistakes again. I know that it is not going to be a simple thing to just go out and make mistakes because it is our money we are talking about if we lose, but without that, we are going to just try to profit and involuntarily make mistakes which will be much worse.

All of these are basic knowledge a trader must know and must apply,
the real challenge is to keep the discipline attach and not greed to take over.

Position size is incredibly important in order to determine if a trader will become successful or not, after all even if you had a strategy which could give you profits and you were completely sure about it as you backtested your strategy, all of that will be for nothing if your position size is too high.

This is because regardless of how good your system really is there is no system that wins all the time, so you also need to prepare yourself to endure several losses in a row, but if your position size is too high then you will lose a lot of money to the point it will be impossible to ever recover it no matter how long you trade.

People especially newbie ignore this stuff. Their goal is to have huge profit so they often tend to risk a huge percentage of their portfolio. They don't think about any risk and just think of the outcome if the market favors their side. They will just realize their mistake when their portfolio is more than 50% down.

Learning those strategies requires strong discipline to control their emotion which is the most important for me to avoid huge loss in trading. Even experts sometimes forget their trading strategy because of greed.

A few days ago the price correction has weakened my mindset about how it should stay in a bearish prone area. So far trading is not one of my favorite activities, it may be profitable but I prefer investing to trading. It's just that my psychology was disturbed because the price fell to the point of $17.7K which is the lowest price at the moment and recover to $20K - $21K within days.

I learned a few things, and I've noticed them during the quick corrections. No need to worry too much about how bitcoin has a new pattern for its price, the low point is a guarantee that it might happen sooner or later, but the most important thing is to never think that it is the end of everything. So do you think an experience like this can't be a good mentor to anyone?

Mentor and influencers are different things. If you know a person that helps you personally, and either do not help anyone else, or maybe a few other people with you and you chat with them and you ask questions and they answer and basically it is a friendly environment then it's fine and they are mentors.

But, if we are talking about some twitter influencers that talks about crypto, shows charts, indicators, whatever, and tells you what to buy, when to buy it, at what price, and when you should get out etc etc, then it is an influencer and it is not a person that should be trusted with it. Know the difference between a mentor and an influencer then you could find someone easier.

It is true that mentors are needed to guide us so we don't make wrong decisions, because usually mentors are more experienced and can direct us
when trading. Most importantly we need to find a trusted mentor, because nowadays there are so many frauds, so we really have to be careful
in choosing a mentor. I suggest looking for a mentor from a trading course on a popular and trusted platform. Although the cost is quite high,
most importantly the mentor can be trusted and can make us understand how to trade properly.

After all, we will not always be guided by a mentor, if we already understand how to trade well, we will trade relying on our own trading skills.
Then because of the high trading risk we must really prepare a backup plan if the market does not move according to our expectations.
The conclusion is that it is not easy to be a successful trader, careful preparation is needed. So besides we must be serious in making preparations
before trading, we also sometimes have to sacrifice money and time to become a successful trader.

Using volatility to recover losses is a way that traders do, Beginners also do this but I'm sure most of them fails because of market traps that wants unexperienced traders to be liquidated. It would be wise for new traders especially those who just entered crypto on bull market to study and familiarize the market cycle first. I do have a friend that earned big time on trading during the bull market but now he is on loss about 50- 60% of his portfolio. I told him not to be over confident in the market just because he gained so much profit during the bull run. Stop loss is a great way to prevent continued losses but over confident trader don't use it. Crypto market is just so unforgiving especially on those inexperienced once.

We are not in the sideways, its almost getting down further after a little green that is why its not really a good time for day trading but still someone can make profits but being consistent of doing it in the bad time is almost impossible in my personal experience so taking a break at this time and wait for the actual recovery to happen.

Stop loss is indeed important in trading but not in the case this time, we'd rather use the volatility of the market to buy and sell, and make a profit from it, not losses. Experienced traders might not seem to have a problem in bear season, it was those starters or beginners as I know the current situation is too risky. That is why I don't push people (beginners) to do trading but instead spend this time familiarizing the market behavior and making ready for the upcoming days when this is over.

What happens is that when to comes to taking profits there are two different philosophies, there are those which determined beforehand how much profits they want to obtain out of each trade and there are those that will let their winners run.

Both strategies have merits, however the biggest risk comes from those which like to let their winners run, and this is because if a strong drop in the price happens then many traders will not be able to accept the smaller profits they are getting now and they will keep holding their coins with the hope there is a reversal in the market, and when that does not happen and the price keeps going down then that is when they can accumulate huge losses as they refuse to sell.

When someone wants to be a trader and exist here for long term then its important to know their limits which is based on their financial level, financial goal and time availability for all these stuffs. Better avoid doing the day trading or even looking at the price chart for too long because it will create panic situation which can even leads to wrong decision. Better to use the stop loss all the time so it can save from the sudden dumps which happens on the market.

Only experience and choosing the right strategy. Otherwise, the results will be exactly those for which the trader works.

In order to be a trader, he must have a tendency to accept both profit and loss.If you want to trade, you must lose the profit. You just have to be more discriminating with the help you render toward other people.I have seen people lose more than the money they gain by trading.

Investing knowledge and understanding not just about the basics of trading but also about its risk is the first thing that we need to do. We should know how trading works so we could create our own target goal. Trading has lots of risks but if we're filled with knowledge about it, we can deal with all those risks and do trading effectively and successfully.

I think that the most effective way to avoid very large losses is to follow our own plan, when we have a trading strategy and the market goes against us, sometimes we tend to get desperate, it is for this reason that it is very important to place the Stop Loss, the Stop Loss for me is a unique savior, also another thing is to get carried away by emotions, when a person gets carried away by their emotions they can lose, sometimes another thing that has harmed me is to follow advice from the news, to Sometimes the news is a double-edged sword, and according to some books they talk a lot about it.

Of course not all of them because there are still traders that can get distracted easily and they then do the wrong moves but only those who are serious enough are going to apply the advice that is being talked about here. The market is becoming unpredictable the longer we go and that can be the cause of the confusion of traders. There's also a news that I read last time which states how traders are struggling now.

It sounds unbelievable at first because traders are usually the ones that can profit on this volatile market. That only shows that this bear is lethal that even the pro traders cant do anything to help themselves. Traders should calm down a bit and don't be desperate enough doing risky things as it only worsens the situation.

It can be riskier if we don't have knowledge and skill about this and I suggest those who come and try trading must invest their time knowing the market first and have some mentor to assist. I'm not going to say we should have to keep this person forever, it is just the days when we are in the learning process. In this way, we are able to understand how that trading works and simply guide us to a better choice of coins to trade and the basis of it. It can't be simply ( a different view to others) and that is why we need to take this seriously otherwise.

That is why crypto trading is a high-risk activity, because highly volatile price movements are difficult to predict. So make sure before deciding
to trade crypto we already have sufficient knowledge and can analyze market movements well. In order to avoid trading in the wrong coins,
and also be able to use effective strategies to generate profits. Hopefully we can learn from what happened to LUNA, to always be careful when
choosing altcoins for trading. Make sure we always use the stop-loss feature when trading, to avoid big losses. Then control our greed by taking profit
if there is an opportunity and don't be too greedy by being obsessed with big profits. Because we can get big profits by accumulating the small profits
we make from trading.

I think that here the key aspect is in the experience and knowledge of the trader. At the very least, I would try to devote as much time as possible to this.

I would guess that buying right now seems like the easiest way out of this market? This isn't an advice from someone with millions of dollars, I am not a great person to listen when it comes to investing, but that doesn't change the fact that you would end up with a loss just because you bought bitcoin and held for a long time.

Looking at the market we can see that it is not a good period to sell, because it is already such a low price, and we all know that bitcoin would definitely go up, it always has. All of these combined means that you are going to make a good profit when you invest into bitcoin and hold for a long time during a bear run and wait for a bull run.

Great advice.

But the question would be, is that, do all traders could do some discipline to themselves and apply great approaches in trading to avoid crippling losses? That's where the challenge would start.

In this time of bear market, where a lot of red candles (lower highs and lower lows) a lot of traders are confused on what to do to gain back profits. Traders in futures especially, are eating up liquidation messages from binance every single day. The one mistake I've noticed is that they are contradicting the trend, meaning they are entering a long trade even though the market is in short trade, add up the insane leverage just to cope up with their losses which for me is something very risky.

Using a high leverage doesn't mean you could gain back the losses you've suffered on your last trade, I mean you could if your TA is good enough to back you up, but if you're not sure and just randomly entering a trade, it's suicide.

First, sorry for your loss. I believe we have this term called diversification.  It isn't smart to put all our investment funds in one go.  We should always look for other options to invest our funds besides adding more investment won't hurt as long as we can manage them well.  With diversifying investments, if one investment doesn't do well at least we have other investments that may be doing well.


Luna is one big example of an incompetent developer. Who is in the right mind will exponentially increase the Luna supply to solve the UST problem.  Terra developers need to relearn the basics of supply and demand. And imagine if we go all-in in this Terra project, we will very be devastated.  But I think for those who are trading with a bot and have a stop loss trigger on, they saved themselves from this Luna devastation.

LUNA was one of the horrific incidents I've ever experienced, and indeed stop losing is very important,
but when we do it for real and sell at 10% or at -10% it will certainly be difficult to do,
because I believe 90% of traders are dissatisfied with that result and continue to hold until maybe 10x then they sell, and that's a fact that I see.

Crypto trading is a unique thing, the opportunity to rise by thousands of percent in a day can be obtained, instead we can lose 99% in a day or even less, as happened with Luna only takes a week to drop from $ 100 to $ 0,0001, and in my opinion things What we can do is determine the target profit and target loss, what I do is immediately sell when profit is 10% and immediately sell when a loss is 15%.

This information can be additional consideration and learning. thanks so much.

Actually, in my opinion, the basic thing when we are trading crypto is our readiness for all things. it includes the readiness of knowledge, management, and also emotion.
Management of risk and money is essential. this will lead us to decide what amount to put in every trading position or pair. of course, we will not use all-in because this is high-risk enough and probably will make us one loss at all.
that is why there is no need to put it all in.
Dividing the money into some trading position and also saving money is needed.

Correct, copying the strategy of someone else and then use it may seem to make sense, however things are never that simple, just because a strategy works and someone else can obtain profits with it this does not necessarily mean that we will obtain profits with it as well, after all the one which designed that strategy did so with themselves in mind, so they created a strategy that completely fits their personality and their knowledge, so someone that is just using it without understanding why the strategy is the way it is will never be able to use it to its full potential.

Copy trading it isnt bad but majority of people or noobs who do end up on relying on them on the end which they do believe that they could do this all day and on the time that
following is over then making your own decisions would really be the hardest part thats why its sensible that you should really be knowing to trade on your own and make out decisions on point
and not really relying on other people when it comes to various decisions.

You got it wrong. I liked the post so I shared it with you. And there is a lot of information about trade. Come on, you're wearing a post.



You are right. You don't just have to do videos and courses. You have to have your own skills You need to have a good knowledge of the market before you can trade. And you have to keep track of everything in the market. The bad news about the market is that the market is likely to go down. And when it comes to bad / good news, some Twitter accounts tell. If you want you can follow the following account.

 

For some reason, copy trading is helpful while we are still on the path of knowing trading but this can't be long-term. We indeed value those things that we had learn from others but it was also our responsibility to care for our future and that is not to only just rely on others. Instead, we have to push ourselves to the limit and improve our knowledge and skill in order to make better in this way we can prove that we can manage the stress and losses that we possibly face in trading. Yes, it is to understand that not all the time the market will give us a favor, sometimes we got wrong and lose.

While it is true that people have different strategies to profit from the markets using a stop loss is one of the concepts that I consider traders must use, and the reason was mentioned by you, we know the volatility of this market can be extreme so if you are not using a stop loss and the market crashes when you are not putting any attention to it the losses can be so huge that you may never recover that money even if you kept trading, so it is better to prevent those losses by the use of a stop loss.

A trader should always have it at the back of his mind that losses is possible in trading, a trader should use the amount of money he can be able to afford to lose is the first point. Experience helps better than anything else, the more the experience after appropriate learning, research and mistakes will help the trader to have a profiting strategy. Trading is more about experience and losses can not be avoided until more are experienced

A few days ago there was a platform called Luna. And their stables were pre-formed UST It was known as Star but its price was upside down. I did not know that the price of stable coin has gone down so much.

So thousands of investors in this organization invested heavily here on the Luna platform and on the UST platform. I ate massive losses from this Luna platform. Sitting on my street with a plate The situation is over.

Everyone keeps saying "stop loss" but if you are "trading" then stop loss is futile. Traders should not bel etting machinery takeover, they should be doing everything themselves. Meaning, if they are trading, then they should be right in front of the PC, and checking the trades they are doing. In this case, if they are trading, and in front of the PC, and there is an automatic selling set (stop loss) then whats the point of being in front of the PC? So, they should be checking it all by themselves, and they shouldn't really be doing anything that would be set to auto, and stop loss is something that you set when you are not in front of the PC. I would understand stop loss if you are an investor, but traders should be right there, and stop loss should be way too late, you should be able to intervene all by yourself.

If someone is new in trading, there's no hard to try to copy other people way of strategy, sooner or later he will have his own idea. But he needs to be sure that since he is new, he need to trade with small amounts first before going to trade huge numbers. And like what I always said, they need to know that it is not always winning in trading, so he needs to prepare for losses.

Thanks for this idea mate.
Well, trying to create your own strategy is way better to follow others. As we gain more experience in rea trading the close possible to having our idea of how to make one. Yet, we need to verify the effectiveness of this strategy to prove that it really works.

However, trading is not all about strategies, it certainly needs dedication and a sort of market goal/plan.

Do your own thorough research and never go all in. Different strategies exist that could work for some persons and won't work for others but the use of stop loss could go for everyone, for it may be a universal strategy

I think the use of high frequency trading can help also it's important to set benchmark while trading to avoid unnecessary loss...

Looks like you are studying the trading techniques since long. However, to apply your formula one must need to invest minimum thousand bucks so that they can earn decent profits. With the positioning we are already loosing around $100 no matter the stop-loss clocking as mentioned in the OP. Since we have to recover this loss, we need bigger invested amount so that it can happen quicker. In silent market this could work perfectly however in the market like bitcoin (/crypto as whole) this could be dangerous to leverage. The volatility can make higher losses and we might loose the position quickly but with experience this can be recovered too. At the end it's all about practical approach rather than theoretical basis like yours. But very interesting, this is new learning for me.

Diversification is one of them as well. If you know what you are doing then it shouldn't really be a problem but if you have no idea about crypto then you could diversify by buying silly coins and so forth. I highly suggest being very careful with it, you could buy like 10 different coins and if 7 of them fails within first 5 year, then you made absolutely nothing that worths diversification, just buy btc, eth, bnb and be done with it in that case.

However, if you know what you are doing then you should be doing a lot better and you could totally profit from it because you could buy 10 different ones, and even if 1 dropps, the other 9 would save you.

This is one of the things that is easier to be said than to actually do it! Especially if you are dealing with new projects on the market!

If you don't wish to have crippling losses simply stick with top coins! I mean we all saw Bitcoin, Ethereum, and some other coins crippled in some moments (with a drop of over 80%) but they managed to recover and break old records! What happened 2-3 times (and more) will happen again! Many projects (I guess the number is pretty high) were scams and pump and dump schemes! You can't hold to those projects and believe in a profitable future!

People who are afraid to stick with Bitcoin even when it's hard should choose gold as pair in trading! Or some other asset that is less volatile than any cryptocurrency! For example, USD/Gold pair... chances to experience crippling loses with this pair is close to zero!

 

indeed, there are different traders and one will have their own strategy to get their profits. for those who are not using stop loss, they should know what they are doing, because they can easily get liquidated especially if the coin suddenly crashed.
using stop loss wouldn't hurt if you can't keep an eye on all of your trades. it may be your saviour one day.

Small position size is recommendable or something which you could really able to accept out whenever you do lost certain trades but we know that as long you wont really be able to panic sell then you could always be

having the chance on recovery thats why i isnt really that bothersome when you are really that tending out to make some trades.Losses are inevitable but making yourself doing the best on minimizing that risk
then its up to your choice or on how you would gonna make it.

Minimize mistakes as much as you could even though this sounds not simple but its not impossible for it to be done.

Good calculation though. But not sure if this will help in gaining more profits but yes obviously we can save from loosing much. I tried it often but at last I had to give up since I invested on a long term trade. After loosing much in last 5 years, decided to go with long term trades. Patience is indeed needed for it. Choosing the right coin and keep watching its growth would really satisfy you. Buts yes, need to keep watching the market. The market might fluctuate at any direction and we might have to adjust our trade accordingly.

Without a doubt the best way to reduce the chances of a massive loss is with the use of a small position size and a stop loss, however this is something which limits profits and since the main goal of traders is to obtain profits then a great deal of them do not like either of those two concepts, which means that even if they can obtain huge profits if they happen to be using leverage when the market crashes their losses can be monumental to the point they could even get a margin call simply because they made a mistake when reading the charts while they were not using any method to protect themselves from massive losses.

I think that in this case it is important to pay attention to experience. At least, I think this is a very important aspect.

I thought you are the same account that posted on the thread link you dropped but no , it is another account from that page name BIT-MASTER.

However I have to say from the footnotes that despite all the reading of document and videos about trading, if we don't practice to understand the market and the way TA works with indicators and master our own strategy then we keep losing. Trading is practical not theory.

If you want to trade, you have to follow some rules first. That is to use Stop loss
If you are a trader then you must use stop loss in all trades. Because the market is not always the same. And for a good trade you can go to the link below and wear it.


Link : Some essentials for a trade

We're all different traders and I think it will work for the others but if it doesn't work for someone, he has to find another strategy that will make it for him.

Not all strategy works perfectly to everyone.

But it has to work if you execute and properly done. Like the traders I know personally, they don't put stop loss and they're more than a risk taker than me.

In my opinion, Setting a Stop Loss is one of the important elements moreover done by daily traders. This is done to avoid more losses and move to another trading pair again to gain more profits. So, the recent profits can cover the loss that we have in advance. But, if this is for long-term investment, especially for top coins like Bitcoin, we may not need to set a stop loss because we are not in immediate trades.

Will this really work on every trading strategy?

When I see the trading leverage use, well, this may be interesting more, because we can gain much more profits on it, but also high risks to face. That is why more calculations, strategies, and smart decisions to take the position will be very crucial to combine.

Not all traders have this cut loss setting, some are just ok with the risk and whatever the result of their leverage, they are ready for that. For to some traders who are still not familiar how this market works, I think having a cut loss setting is not a bad thing, it can limit your losses and most probably save your capital. I do still have this cut loss level, and its working fine with me, having your own strategy is also a big thing here.

I started using low leverage because if the market is against me, I do close position opened because of fear of liquidation and later the price do correct back. I see the market moving in both side ways and low leverage can be good for bears and bulls if the market is studied very well with indicators and risk management.

I can use leverage if need be, I prefer to begin trading with 1x, if my analysis failed and the market go against me, I wait for a time for indicators to signal me to go 2x, I can do it up to 3x max. This helps the chance to gain back the money as fast as possible if the market later go in your direction taken. 3x for bitcoin, not altcoin. Using 1x is not that risky but it can result to panic too if the amount used is very high, so trade with the amount you can afford to lose.

That can work with low leverage and if you taking very small risk. You therefore probably making use of very minimal leverage like you mentioned otherwise you can't have that kind of peace. Some other times but not all the time, the market price and direction can change against you even at low leverage. You said it about experience, it is very important in trading.

Trading strategies is still working very well, even now is more favored as bitcoin is not going beyond $28000 and $32500. The use of leverage is the failure of many. Assuming I open a long position at $30000 with 1x and I have liquidation price of less than $1. If bitcoin get to $25000, I will increase my leverage to 2x, the liquidation will be around $12500 and I will still have rest of mind. The price to make profit will change from $30000 to around $27500.

What I just know is that trading is beyond what someone can write or post, experience matters too. It is in OP that stop loss is good, but I did not even make use of stop loss, I only make use of take profit.

I think your plan will be good in a bear market condition when you can anticipate price movements using points of support and resistance and then build a trading strategy on that basis.

In the current situation, uncertainty prevails, and therefore all the current support and resistance points are psychological and cannot be relied upon. For example, we have stayed for a period of time from $33,000 to $25,000, but they are only psychological levels.
If you put the stop loss strategy at 25k, breaking it does not mean that the price may collapse severely, and therefore the only point we have is the levels of 20k.

In short, the current situation is not suitable for short-term trading, but only for buying.

Being a trader and trying to avoid losses is a phenomenon that is more than understandable, but very rare and difficult. Do not expect such a solution to the problem.

Hello everybody, here is an article about position sizing, and here is its quick summary(Full Article on cleo.finance blog):

Position sizing is determining the correct size of the position based on the amount of money you risk on the particular trade.

Before you can do that, you need to figure out what is the maximum acceptable risk of the trade.

That risk is usually expressed as a % of your balance, that you are willing to lose.

To make sure you don’t lose more than this amount traders set a Stop Loss order which are the real maximum exposure of your position.

If you don’t use a stop loss, you are exposing your entire portfolio!


Where to put a stop loss?

• That’s where Technical Analysis can be handy. Majority of retail traders would look at the chart to find out – usually behind some support/resistance level or based on some volatility indicator, such as ATR

Rule of thumb:

Risk between 1-3% of your portfolio balance on each position. This way any single individual loss won’t wipe your account and break your spirit. And more importantly, even a string of losses will leave you with enough ammunition to recoup the losses.

Have a clear approach to risk:

• Set a risk limit for each trade, asset in general, day, week and month (you won’t risk more than X account)
• Determine the right position size and start small
• Increase the position size of trades slowly if your account grows
• Lower size or switch back to paper trading if your account doesn’t

Two types of position sizing methods: Fixed and flexible

Fixed position size

• Using the same position size for every trade
• Good for finding out if your strategy has an edge
• Make sure you come back and reevaluate position size periodically.

Flexible position size

• Using a percentage of current balance
• Cluster of wins makes every following win larger
• Cluster of losses makes every following loss smaller

How to calculate the correct position size:


You need to know

• Trading account size
• Acceptable risk (in % per each trade)
• Invalidation point (in form of a distance from the open price)

The formula:

Position size = Trading account size x Acceptable risk / Invalidation

Example:

• Trading account size = $10,000
• Acceptable risk = 1%
• Invalidation point = 4% drop in market price

Position size = $10,000 * 0,01 / 0,04 = $2,500

This way you will always risk losing $100 no matter where your Stop Loss goes! If Stop Loss must be wider, say 8%, the calculation is:

Position size = $10,000 * 0,01 / 0,08 = $1,250

Doubling the distance to our stop loss has us reducing our position size by half to maintain the same possible loss.

How to set position size in the trading platform

• Pick a leverage
• Add a Stop Loss
• Input the market price or the distance in % of the stop loss
  
  • Whichever value you enter first, that becomes the constant – element that won’t change when you edit other variables. You can select different constant by clicking the “target” icon
• Input the Position Size or Margin size while watching the PnL of the Stop Loss
  
  • Increase or decrease the size of the position, until the PnL of the Stop Loss is at the level you want it to be

This way you can control exactly what your exposure is, while understanding all the variables involved. You can even add multiple Stop Loss orders, which can help you limit the exposure in lower conviction plays, such as new set-ups.

The next article will be about Stop Losses.