I don't have a set formula, but I take some steps that help me to reduce my risks. It's important to keep an eye on the news and follow closely the development of the projects in which you invest, to know if there is progress or lack of it. And when you do your price analysis remember, fundamentals are what counts.
Your analysis must be your formula. We need not to be an expert to make trading analysis for using them while trading.
Trading strategy must be what we are doing to minimize the losses to have possible profits. My trading strategy is simple, I do follow candlestick patterns along with moving average, if it gives buy signal I will just follow that.
Well we are not the same strategy i have my own strategy that can makes me profit buying low is a simple strategy but for me i have buy and low strategy sets of margin and make profit to set different margin in any altcoin.. for bitcoins there is no assurance of price increase so you need different margin so that every time the price is increase and decrease you can be still make a profit.
Sample in bitcoin the present price is 700 value so i will set margin in 720 and decreases set of 680 margin buy low and sell high.. and i set again for sell to 750 and buy 650 if the price is decrease i buy so so if the price is increase to 720 it makes me profit of $20 and if the price will continue to price increase and it can hit 750 you can make profit again of $50 and after that if the price is reduce i will buy again in 680 or below or back to the price 700 that i already made a profit.. this margin should you have in order to make a possible profit..
Anyway it's not guaranteed. If you sell when it hits $720 and buys when it is on $680, there is a risk if you sell for $720 and the Bitcoin price doesn't decrease anymore. So, you will sell for $720 and the new margin will be another, like: min $730, max $750
To avoid that (and at the same time keep the advantages, obviously), you set your trading environment according to the following terms:
1. Never sell all your bitcoins at once. It is possible that the price might grow 200-300 dollars without a major correction, though it is a rare event. Personally, I remember only a few times when the price behaved like that
2. Secure a source of bitcoins beyond buying them on an exchange (signature campaigns come to mind right away). If you have such a source, you basically insure yourself from the events described above, that is, when the price grows without rebounds and you end up selling all your stash
