Different level of risk in crypto currency trading

FanEagle

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Quote from: BuNga_cute on November 06, 2020, 05:13:58 PM

I have to go through a difficult way to understand the different levels of risk in crypto trading. I lost quite a bit when I tried margin trading,
It is best to avoid using margin trading for traders who do not have good trading skills and experience. If you won't suffer the loss that
I've experienced, only focused on spot trading, which has a lower risk than margin trading.

If you consider bitcoin only trading along with long-term holding possibilities then there will be no risk at all compared to margin trading. I agree there cannot be any trading with no risk, but bitcoin trading with long-term plans might be eliminating all your risks as bitcoin market is always heading toward big prices in long-term which makes it possible. When traders are risking within calculated risk limit then the chances for enjoying successful run will be higher even in this crypto space regardless of its high volatile nature.

Accept the losses and look for new opportunities but you must take your more time on finding new opportunities then there will be a lot of chances for you to get back your lost capital. Definitely it will take more time but there are lot of chances for it. Never give up and always look for new opportunities

.

BuNga_cute

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I have to go through a difficult way to understand the different levels of risk in crypto trading. I lost quite a bit when I tried margin trading,
It is best to avoid using margin trading for traders who do not have good trading skills and experience. If you won't suffer the loss that
I've experienced, only focused on spot trading, which has a lower risk than margin trading.

bitgolden

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Quote from: yohananaomi on November 06, 2020, 01:12:16 AM

I think we have to admit that crypto is full of very high risks but the experience of doing and taking further actions will certainly also affect, even though the level of luck is also very decisive and quite high.
So sometimes it is true that the colleague said above that beginners or those who have been for a long time can experience mistakes and sometimes those who are doing business for the first time make a good contribution to themselves

but to be honest, experience is the most usable price because you can do it with predictions that you have experienced at least be able to do something that can be profitable even though it is not absolute.

I suppose the biggest difference could be the reaction time and method between newbies and veterans.
Anything could happen in crypto world and doesn't matter if you are a newbie or veteran you could be in a big loss if you just happen to be at the wrong place at the wrong time and sometimes there is no way to avoid that.

However if you are a newbie you could react to that very badly and make something bad even worse, whereas if you are a veteran you know these things happen and it is not really surprising so you could react to it a lot more calm and just try to get out with little loss without making a big deal.

Even something as simple as having a stop-loss could be a veteran move, not all newbies know how to use it so they end up with making a loss while veteran gets out way before them.

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Quote from: bitgolden on October 29, 2020, 11:58:41 AM

The biggest risk is doing something you are not ready at all. If you are not sure about what you are doing, you are taking a risk that is beyond any logic, you have to know what you are doing for the exact reasons and data points before you do it, if you are going into bitcoin with mindset of "I think bitcoin will be $20k, so I am going to buy now" without any other information in your brain, that is going to cost you a lot of money.

However if you end up with "I believe bitcoin will be $20k, because this will happen and trigger that which causes these which should have consequences of price increase" that would allow you to be a lot more ready for trading. So, in order to remove risk (or at least make it minimal) you have to make sure that you check under every single rock before you make a move.

In your second paragraph, I understand what you are talking about is proper planning and research into project in a project to invest on. This is correct because someone who does not plan, will hardly get to success. We need better research and analysis of a coin before we do the investment.

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Quote from: jrrsparkles on October 29, 2020, 12:44:43 PM

Quote from: cheezcarls on October 29, 2020, 07:02:41 AM

Quote from: Finn-in-web on October 19, 2020, 06:32:50 AM

Hi,

I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.

But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)

I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...

If anyone could shed some light on this that would be appreciated.

I have to be completely honest with you. There are no different risk levels in crypto trading. No matter if you are a newbie, average Joe or experienced freak, the level of risk is the same, which is very high. Even experienced traders are making mistakes in their trading decisions, because nothing is guaranteed. The only stuff that mattered the most is how we manage our risks financially and how strong our emotions are in case it goes the other way around. Invest what you can afford to lose.

Same level of risks but experience may guide people to tackling the risks we are facing. We shouldn't set to any coins when we are a trader because crypto is unpredictable and volatile so we need to keep ourselves busy with picking up the right coins, after every profitable trades.

I think we have to admit that crypto is full of very high risks but the experience of doing and taking further actions will certainly also affect, even though the level of luck is also very decisive and quite high.
So sometimes it is true that the colleague said above that beginners or those who have been for a long time can experience mistakes and sometimes those who are doing business for the first time make a good contribution to themselves

but to be honest, experience is the most usable price because you can do it with predictions that you have experienced at least be able to do something that can be profitable even though it is not absolute.

TheUltraElite

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Quote from: onecall123 on October 23, 2020, 11:34:46 PM

Everything has risk can go to zero, you have to deal with risk until you're going with crypto currency trading. I've been in the crypto exchanging business for some time now and I attempted many security estimation to limit the danger but nothing make me happy. I recommend you join a decent trading signal group those are providing good calls for both beginners and experienced crypto traders.

I appreciate that you did security estimation but you are unfortunately quite correct that the risk can not be removed and it is present in every aspect of life. What can be done is that traders undertake less risky investments and then modify them with time.

However you are wrong about signal groups. They are scam groups because they pump some shitcoin that the owners of the group baghold and then sell it off when asking the members to buy. None of them are honest and you will be stuck with some random shitcoins if you follow them.

Silberman

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Quote from: samcrypto on October 27, 2020, 06:09:30 PM

There’s a risk everywhere the only difference is the level of risk and if we are talking about trading cryptocurrency here, expect a high level of risk because you can lose money here in just a day if you make a bad decisions.

The volatility is normal in cryptocurrency, traders love that risk so they can pump and dump their token as easy as they could. There’s a big risk on a new project, and that’s your decision whether to buy or not, as long as you are willing to lose money then you’re already a risk taker.

The biggest difference between a losing trader and a successful one is how they manage risk, the losing trader has no idea about what risks he is taking, sometimes he will take very little risk and sometimes he will take a huge risk, sometimes the huge risk can payoff and this makes those traders even more greedy but sooner or later they will lose and the losses will be so massive that for the most part that is enough to make them get away from this market, in comparison the successful trader knows when there is a huge possibility of getting profits with a low risk and avoids to put himself in situation in which he will lose a great deal of his capital, so even if he losses from time to time he keeps most of his capital and then when the market begins to go up very rapidly he is not afraid to take advantage of the opportunity that has presented itself.

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Quote from: Johnyz on October 27, 2020, 05:44:25 PM

Quote from: Yaunfitda on October 26, 2020, 07:38:32 PM

There is always risk involved in crypto, that's why you are seeing that kind of warnings. And there's risk aversion as well, so it's really up to us on how to manage it. So personally, I don't see that there are different though, risk is a risk. The big question is how you are going to mitigate the risk? Do you have plans?

Knowing how to deal with risk is one of the skills that you need in order for you to become a successful trader, and yes all the risk are the same but it increases the moment you decided to take more risk. Making plans and strategies can lessen that risk especially in trading cryptocurrency where volatility is very high. Don’t expect not to lose money instead prepare for it and have a back up plan always.

I agree with you Cool

Successful traders understand the importance of risk management. Trading is inherently risky because it is a zero sum game. Every dollar you gain through trading represents a loss on someone else’s balance sheet. A losing trader has no trading plan. This is the most common mistake, you should not make it))

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Quote from: TitanGEL on October 29, 2020, 01:41:44 AM

Quote from: pankowri on October 28, 2020, 09:28:20 AM

Risk is a component of the characteristics of the crypto world. There are several categories of risk pertained to in cryptocurrency. In this virtual world, the risk is spread at every stride. Risk of buying and selling. Risk on the scam in the market, risk in long term investment, and many more here. When you buy BTC that can be happened after buy, the price can befall. And the scammers are aware of stolen money from people.

The risks are forming in the area outside of your expertise which means that if you do not have foundation or basic knowledge on the type of investment that you're currently doing then the risks are high. The risks can become high or low depend on your skill and intellectual level. In cryptocurrency trading, at first yes it is risky especially if you are new in the mrket but that risks can be lessen through proper experience and learning. A lot of people are buying or putting money on a type of investment that they not fully aware or what we can a risky investments then they will blame whenever they lose the money that they put.

I do not promote or suggest to newbies to do leverage trading because of the risks and I think they should first gain a lot of knowledge and experience in spot trading first before they go in futures. As long as we have proper risk management, we can handle huge risks and maximize the potential upside.

Your viewpoint is straight forward and very clear to me that you are not encouraging the newbies in trading. I am also support this and the same thing I usually do. I see many of us can not make successful trading even once in a month. So it is not an easy task. Risk is everywhere. We need to adapt to it.

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There are things to consider before you get to trading. Below are the most important parts.

Know your risk - how much capital are you going to invest. Never invest rent money etc.
Know your Market - is its derivatives? Is it a spot market? Futures? Etc. Then learn what you can do with it.
Form a trading plan - never head on to battle without a strategy. The same goes for trading.
Be emotionally ready - losses are inevitable, never hold on too much and have risk management

I think you need to be aware of what market you are playing to determine if you will take the extra precautions or not. It depends on you. There is a lot of resources that you could read so you could improve. Take charge of your knowledge.

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Quote from: cheezcarls on October 29, 2020, 07:02:41 AM

I have to be completely honest with you. There are no different risk levels in crypto trading. No matter if you are a newbie, average Joe or experienced freak, the level of risk is the same, which is very high. Even experienced traders are making mistakes in their trading decisions, because nothing is guaranteed. The only stuff that mattered the most is how we manage our risks financially and how strong our emotions are in case it goes the other way around. Invest what you can afford to lose.

With such high volatilities this market have, each time you enter your position considered as risk. You are correct with levels of risk as there's none in terms of positioning as it's every traders knowledge that matters.

Whatever you directions you take you always needs to consider how you'll be able to take the piece of profits, your capabilities to anticipate the movements will be your advantage you have to keep enhancing it.

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Quote from: cheezcarls on October 29, 2020, 07:02:41 AM

Quote from: Finn-in-web on October 19, 2020, 06:32:50 AM

Hi,

I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.

But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)

I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...

If anyone could shed some light on this that would be appreciated.

I have to be completely honest with you. There are no different risk levels in crypto trading. No matter if you are a newbie, average Joe or experienced freak, the level of risk is the same, which is very high. Even experienced traders are making mistakes in their trading decisions, because nothing is guaranteed. The only stuff that mattered the most is how we manage our risks financially and how strong our emotions are in case it goes the other way around. Invest what you can afford to lose.

Same level of risks but experience may guide people to tackling the risks we are facing. We shouldn't set to any coins when we are a trader because crypto is unpredictable and volatile so we need to keep ourselves busy with picking up the right coins, after every profitable trades.

bitgolden

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The biggest risk is doing something you are not ready at all. If you are not sure about what you are doing, you are taking a risk that is beyond any logic, you have to know what you are doing for the exact reasons and data points before you do it, if you are going into bitcoin with mindset of "I think bitcoin will be $20k, so I am going to buy now" without any other information in your brain, that is going to cost you a lot of money.

However if you end up with "I believe bitcoin will be $20k, because this will happen and trigger that which causes these which should have consequences of price increase" that would allow you to be a lot more ready for trading. So, in order to remove risk (or at least make it minimal) you have to make sure that you check under every single rock before you make a move.

santiPOGI

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I don't know what level of risk in cryptocurrency you are talking about dude, just all I know is that once you decide to invest into
any of the cryptocurrency that means you already entered into a risk portion of trading as a trader here in this field of business.
Without any involve money it can't be called risk, in my assessment to this matter.

cheezcarls

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Quote from: Finn-in-web on October 19, 2020, 06:32:50 AM

Hi,

I have some experience in crypto trading (far from being a master though).
One question I came across is if there are different level of risks for different cryptos? I know that generally cryptos are like stocks, ie you only can lose what you invest; but obviously there are financial products to deal with leverage etc.

But if we take a simple example: If I just would like to buy some (simple) CEL shares for 1000 $, this would be the maximum I could lose right?
The reason I am asking is that for some COINS, on coingecko there is a disclamer saying 'Highly volatile investment product. Your capital is at risk.' (which is a banner sponsored by etoro, but it doesnt appear at all cryptos...)

I understand that with speculative cryptos you can lose part of or all of your investment, but is the risk limited to the amount i laid out? When I was trying to buy a similar crpto on binance they displayed some warning as well which confused me quite a lot...

If anyone could shed some light on this that would be appreciated.

I have to be completely honest with you. There are no different risk levels in crypto trading. No matter if you are a newbie, average Joe or experienced freak, the level of risk is the same, which is very high. Even experienced traders are making mistakes in their trading decisions, because nothing is guaranteed. The only stuff that mattered the most is how we manage our risks financially and how strong our emotions are in case it goes the other way around. Invest what you can afford to lose.

davinchi

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Each person has their own goals as well in the end, which means their actions are usually based on their own ideas of what is going on too. I believe if one person is trying to make a quick money and get rich right away he will not be acting similar to someone who is here who wants to just retire at age of 50 without working after that. These are all different things and that is why I believe they will also do different things as well.

Personally I believe there is a huge potential they could get together on the same middle ground and just focus on how to make most out of what they have instead of trying to overachieve best traders of the world but not just buy/hold/forget system neither. You could have like a savings account interest at banks for example, similar mindset for bitcoin could be found.

TitanGEL

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Quote from: pankowri on October 28, 2020, 09:28:20 AM

Risk is a component of the characteristics of the crypto world. There are several categories of risk pertained to in cryptocurrency. In this virtual world, the risk is spread at every stride. Risk of buying and selling. Risk on the scam in the market, risk in long term investment, and many more here. When you buy BTC that can be happened after buy, the price can befall. And the scammers are aware of stolen money from people.

The risks are forming in the area outside of your expertise which means that if you do not have foundation or basic knowledge on the type of investment that you're currently doing then the risks are high. The risks can become high or low depend on your skill and intellectual level. In cryptocurrency trading, at first yes it is risky especially if you are new in the mrket but that risks can be lessen through proper experience and learning. A lot of people are buying or putting money on a type of investment that they not fully aware or what we can a risky investments then they will blame whenever they lose the money that they put.

I do not promote or suggest to newbies to do leverage trading because of the risks and I think they should first gain a lot of knowledge and experience in spot trading first before they go in futures. As long as we have proper risk management, we can handle huge risks and maximize the potential upside.

xSkylarx

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Quote from: Finn-in-web on October 19, 2020, 06:32:50 AM

One question I came across is if there are different level of risks for different cryptos?

Yes there is, some crypto are only driven by their hype and trend. A coin can be popular and good to trade today but after a week if it dumps hard then whales are gonna leave it then they find a different coin again then the cycle repeats. Some are loyal to their projects that even if it dumps, they are still ongoing for some years then make an update. That will become a trend to traders and their price will go up again. It's always up to you to DYOR before buying any crypto. There is always a risk to any crypto you buy.

Tigerheart3026

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yes ur capital is risky for all of cryptocurrency. i don't agree it's an equal risk in all cases of alt coins. there are different risks in the different coins. btc,eth,xrp,tron and top few coins buy and sell risks aren’t similar in any shit coins. haven’t found this features in coingecko it’s very recent implementation?

Vispilio

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If you trade unleveraged, then the risk of ruin is only when the crypto currencies you are holding go to 0 or very close to 0, which is admittedly a considerable risk for many crypto assets.

The level of risk increases exponentially if you like to trade on margin, however, then you have to factor in both borrowing costs (usually taken out daily or 3x daily from your equity) and the liquidation price, which is calculated by both the leverage you employ + the exchange cushion (usually 2-10%), meaning the exchange lending you the margin will always liquidate you earlier than the risk of ruin price because they don't want to be stuck with the risk themselves...

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