Topic: Why Newbie Traders Lose money? | Risk Management Basics (Read 594 times)

This is a good article and of course every trader that wants to be good in trading crypto assets or any kind of trading has to know about risk management. But, that still doesn’t mean you wouldn’t be losing. Even those you called the trade gurus still lose money when they are trading.

Nobody is hundred percent perfect, there will be times that you will lose. This trading is like a competition and you can’t be winning all the time, when you win there is someone who is losing and when you lose there is someone who is making profit, it’s just like that. But like I said, this is a good article because I’m very sure that if newbies should take their time and learn this it will help them to minimize their risk.

Most traders loos money because of their inexperience which make them to fomo for a a trade they are suppose to wait for a good entry point but the fear of missing out on the trade will prompt them to enter a trade of an already pumped token which is already retracing its price for a correction.  If newbies can control their emotions to a large extent then they can minimize loss also

I agree because of mistake why most of newbie traders lose a lot money. Also the other reason why they lose is because of haven't enough knowledge how the proper trade, but they can lessen their loses by knowing the good way in trading or have strategy. And the most strategy they should know is they should know how to monitor the movement of the market.

Most of the time where mistakes are the best teachers imho...I cant deny such mistake when i was still a newbie where rushing things up for you to jump in trading and hurrying to make profits but later on you would
realize that it wont really be that easy when you are already on the actual situation.There are lots of factors needed for you to remember and follow if you do like to survive into this market.
Mistakes are inevitable it would just depend if you o absorb and learn from it and be used on future trades to come.Dont mind on having no perfect trade as long the important thing is
to be profitable in the end of the day.

Newbie is unaware of how investment management and risk reduction are normal when basically, they just want to reach the world of trading as quickly as possible, the knowledge was too much and boring right at the beginning, it made them overwhelmed and did not want to absorb it, perhaps here a lot of our friends just ask us about which coin should invest, instead of asking us about knowledge and safety in trading. Losing money may be the best message and limit the arrogance of newbie, they will wake up and realize risk management is very important.

In theory I like and very informative, but I often hear that if we really do it in the market then everything will be different. in addition to the theory of risk management it might be possible to add actual trading knowledge. to be honest on the second point is very basic and I'm sure many people know about this, but from my experience sometimes in one day we can not make a daily profit (2%). so the main solution is trading knowledge, so I think it's better to provide trading knowledge first there and I'm also waiting for part 2.

It is great to share some information so that some traders would learn something new.
I think risk management is one of the most common problem of the new traders,
Most of them doesn't know how to manage their funds they just want the profit they doesn't think about the negative things that could happen while trading or they doesn't have any back up plans.

Thank you for sharing your knowledge here in forum, and it is a right time for the newbie, because many newbie once they enter in the field of trading they don't know how to manage their assets they just trade and trade without making strategies or planning. So that many newbie are give up their dream to earned when their money is depleted. It is important to know that before we start trading it is necessary to know those guidelines that you've shared. 

Those really are important 3 steps of risk management. What most of the newbie traders would do is that they would forget about pen and paper and move onto manual trades without managing risk. Your first point seemed quite interesting for me. Keeping a risk to reward ratio is always good to minimize our loss.

Moreover, a normal day trader would approximately execute 10 trades in a day of which 4 might fail but 6 might make him hit the targets which would indeed give him some benefits even if he keeps risk to reward ratio to 1:2. This thread should be bookmarked by newbies who want to start learning trading. This would really be useful for those.

Newbie traders lose their capital due to the obvious reason of lack of experience in both technical analysis and fund management capabilities. I believe risk management is just a part of fund managements as when you are able to protect your capital from unexpected losses then you may get chances to minimize your risks in greater levels.

Learning and continuous learning will be the possible way for newbie traders to turn as a profitable traders and then professional traders. It will not be possible in months but it will take up to year of time. Until seeing consistent profits, traders must use least capital. That capital is not for generating profits but for the purpose of learning the basics of trading.

First two important keys looks the same. Knowledge is most important factor here which would make us earn a decent earning but acquiring that knowledge is not at all an easy task. You need to go through a number of books, online websites teaching the importance of technical analysis, previous year graphs, learn how to imply various strategies to the charts, etc which would make you gain some knowledge about trading.

Risk management comes after this. Once you have gained basic information and are ready to move over real trading than at that time you could start learning about risk management before you could perform your first trade. This would make you a professional traders in few months.

This is important Newbie does not consider these issues when trading. That's why they do loss. Another big mistake of newbies is to open a trade if it loses, and then jump to another. It turns out that the next one also goes to loss. They do not think realistically when they make trade. They follow different people and buy that coin with their full fund of what they say to buy. This is a major mistake of them. Hope the op information helps them.

What OP saying can be a guideline, but we can modify what say so we can adjust with the money that we use in trading. Many of us don't have big money to trade so we cannot buy a whole of 1 bitcoin directly, but we can buy bitcoin in small money depends on the money that we have. No matter how much money you use, you don't have to use all of the money to buy bitcoin, but you should have some money just in case to back up if the price is down for more after you purchased.

If you have $100, you can use $50 to buy bitcoin, and repeat the process if you can see the chance to buy and sell the bitcoin. But if you see that the bitcoin price is down deeper than the price you purchased, you can buy more bitcoin because you still have money to buy more. But if the price increase after your buy, you can decide to sell at a price you want, but don't chase too big profit because that can make you lose the time to sell at the right time.

Well, I am absolutely agree with you OP, thanks for sharing this useful information.
In addition to that, most of newbie traders are taking the risk and without a strategy because they simply have a lack of knowledge in this domain that's why they always fail in order to achieve their goals. Trading is not an easy field for making a lot of profit  and in a short period, the makret is  volatile in most of times.
In my opinion, there are four important keys of success in trading and for any newbie
-Learning the basics of trading " Knowledge is power ".
- Read some useful books especially for beginners.
- Be patient and control yourself especially in the bad situation
- Make some different strategies.
- Be yourself and don't follow the social media tips.

they lost because they are not reviewing anything before starting to trade. Everything need to be learn before using your money as capital to invest if they think its easy to earn well thats wrong idea newbie knows . They will only learn once they lost thier money and doing it morecareful next time.

We all know that today there is a coin conquering into the world of cryptocurrency, and we are using those coins to make investment and trading. After the cryptocurrency trading becomes more popular, there are a lot of people who want to make more money, too, with the use of crypto trading. Still, some of them losing their profit, and one of the problems is lacking information and trading techniques. Today with the use of the internet, we can now get a lot of information about how we can win our trade. Here are some tips so as a beginner can get a profit on there trade, first is always seek for the information you needed when you make some trading because this is important to be more aware what is happening into the world of crypto world, next is find a suitable platform because most of the time this useful like every time you have a transactions, market price increasing and more features that always keeps updated you about happening into the price.

Setting up goal may work in other way like you may stress yourself on the urge of having it and moving toward it. Self-motivation is possible by setting up a goal but in trading setting up goal most of the times back-fires. It is like making yourself adding up into another criteria you need to consider as trading is already having many criteria to be satsfied.

There are many methods to relax ourselves. All traders must trade with peace of mind which means strong technical analysis alone will get confident which will lead to peach of mind and stress-free trading.

Newbies should not only get some ideas or advice, they should also practice how trading works. They also need to understand that the market's movement is also need to observe in order to have a safer and larger profits. Market will be your guide so that you'll know your plans, when to trade, strategies to apply, and etc. Setting your goals is necessary for you to focus on your target. Trading is risky and most of the people who engage in cryptocurrency knows that. So all you need to do is to manage your risk in order to minimize your losses from time to time. To reduce stress, try to have a break or rest so that you can start again with a peaceful and relax mind in trading crypto.

Lessons we may learn from trading is unlimited and due to this reason, people are failing to make use of the lesson that they had learned out of their failures in trading. I mean if there are few chances of missing something and correcting them in future will be possible. But, in actual there are 1000s of things, we may miss out and remembering or ensuring that we are doing/following all the 1000s of factors perfectly for our trading, is the stage where most traders are failing and the lesson is not remember-able hence they may repeat that mistake again and again.

Failure is good as long as we find the lesson from it, we can not improve out self if we will not learn frok out past mistakes. Newbies are vulnerable to losses, we became newbie too so we should be aware of that. When I was newbie, I have doubts and uncertainties because I'm not yet familiar to market. The first lesson that I learned is J should not gey hyped, I lose in a trade because I follow the opinion of other people. It is my first loss and I told myself that I will only follow myself in terms of making decision. Learning from the failures that we experience is the best way to become successful.

Quite strange I didn't come across this reply with my previous review of this board. Don't get why people relate trade or success in general to the two parties involves to receive different result, where one wins while the other losses. Success isn't gambling, trading, Investing aren't gambling. For you to profit in trading, someone else doesn't have to loss. Let me explain with an example.

Trader A comes into the market at price xyz and leaves the market at price xyz² thereby selling to trader B that's just coming into the market. That doesn't mean trader B is at loss instead both traders predicted the market at different moment and can make profit from the different price movement of the market. Trader B can cashout at price xyz⁴ or even higher so tell me, what was the trader's lost if you have the mentality of one losing for another to profit when it come to trading?.

Can you please clarify the definition of long term trading and what are the parameters you use to monitor and choose the coins for long term trade. I am fundamental analyst in stock market but I find it almost impossible to do any fundamental analysis of Cryptocurrencies because most of them are just useless. If you really do so what are the tools you use and what signals you rely on?

I also prefer to be a long term trader too because it is still the easiest way to invest in cryptocurrency and the only risk that I see in a long term trade is the risk of investing in a wrong coin, but if our investment choice is right, even though we may not see the benefit immediately, but we will see it in the long run, unlike short term trade that you have to deal with so many coin before you can be getting profit on a daily basis since it is not all coins that have the same time that they usually witness a surge, so a trader has to be watching out for trades from time to time and it also involves monitoring the market often while in a long term trade, it is not every time that you monitor the market and deciding the right time to pull out of your investment us very easy as it could be read on news alone.

We've all gone through newbie phase and made mistakes. Important thing is to learn from that and not repeat it. But losses are inevitable and sooner or later we all face it, even in experienced phase.
However, it's important to know how to deal with that and to know where are your limits.
Combined with lack of experience and knowledge plus strong desire to get rich over night makes newbie traders vulnerable. So, important lesson to learn is how to deal with risk and to be aware of it all the time.

That is the trait of a newbie trader , I think we all know that attitude since we started like that, we become aggressive in everything that we want, we rush things, our patience level is too low and that is the reasons why we lose money, even professional traders have a history of it too, but then experiences will help us to overcome this attitude it will help us to risk and to not gain too much in every trade that we are doing.

Whatever you said looks good to read and will surely inspire new readers but I must say that earning 2% daily profit consistently is next to impossible and at some point the consistency will break and you will end up eating losses. Obviously it's not a big deal if you miss the 2% daily profit on some days but what if the number of days increases then it will eat a significant amount of your profit.

Sometimes it really needs a good timing and experience. Newbie traders maybe are very aggressive and motivated that sometimes they might be overwhelmed based on my first experience. I was really so excited to it and I'm so optimistic. Doing some research and thorough review will also help. Most likely its really about luck or good timing. That's why we must invest or trade amounts we can afford to loose the basic risk management in trading.

Yeah but it's better to us to know the basic of trading first before we started to trade. Even someone with a great knowledge of trading could experienced a big loss in trading. We know experienced is needed before we could trade with stable earning. But beside the experienced we have to integrate our experienced and knowledge together to reach the best practice of trading methods

It's okay to lose when they are just starting, its part of the trading. When I was just beginning to trade, I lose a lot of time, but I don't really think of it as of now, because of those loses I make more money now. I learned a lot of things about those loses. For me, to be a great trader, you need to experience it because the experience is the best teacher (for me). And besides, when you are losing just think of it as a payment for the lesson 

Indeed, because it depends on the person itself if he/she wanted to be successful in trading. It shouldn't be a hindrance because if you truly wanted to earn hug profit from trading then you will make some effort and give some of your time, maybe for some of you it is a bit laborious but it will help you along the way particularly when you are having some problems. It can help you how to cope up with any challenges and as long as you wanted to learn then there will always be a room for learning. Don't let yourself lose some of your funds and assets by doing stupid actions because if you have enough understanding, you will analyze every single thing before making some decisions and you will also think about the possible result of it.

It's true that lack of knowledge is not a problem when you are a newbie in trading. The reason why newbie traders are experiencing losses because they are lack of experiences and they are taking too much risk that they don't know how to make a right decision, that is why if newbie traders can't make their decision they should ask for help to their friends who also trades or you can ask questions in online like in this forum.

Lack of knowledge should not be the reason at all, as we do have the option and a lot of opportunity to learn, so there should be no excuse that they cannot learn even starting from basic trading, they should not risk their money for having no knowledge at all, it's okay and it is given that once you are just starting you will lose some but on your part you should make sure that at least your fund will not lose. Learning while earning should be work in progress all the time.

I appreciate that Triffin and you are absolutely right. I never posted this to look a hero or arrogant but I think batting an eye in other people's activity and guiding someone is absolutely two different things just like you said. I think if everyone would have such a thinking of minding their own business then there would be no business left at all. All those noobs who try to call them traders merely by watching two or more videos or reading one or two articles should understand that even these videos and articles were from people who didn't mind their own business. Nevertheless I think there are more admirers and people who need this than people who would say to mind my own business.

So sticking just to your own business is the key to succeed earlier than others. I am also not in favor of keeping an eye at other people’s activity but if someone comes to you looking for guidance and help, then turning your back wont be very gentle. There is nothing great about living for just yourself, you become hero by helping others only. Be helpful to society as much as you can.

I would say everyone to stay away from any trading scripts, bots or signal groups. These are nothing just waste of money. Even if you don't get scammed u definitely won't get any profit.Actually R/R is set from situation to situation market looks pretty strong sometimes while it looks miserable the others. You would want to take profit quick if market is miserable or you would try to stay in a trade if market is strong. But yes what shield said is completely weird I repeat no one has a magic ball to tell them how far is market going.

I think the main reason why so many newbie are losing their money is they are not knowledgable to what they are doing or investing. Then they are rushing to become rich and have a very good income here in crypto industry. So they are not thinking well and decide to action that they are doing because they are rushing. So thank you for this post and advice it may help lot to all newbie.

Probably the main reason - beginners want to get everything at once.
Even when I had good deals, I did not close them in the hope of getting even more, and in the end I lost my money.

basically if we set 1;3 rr ,we can set limit for losses but , but we cant expect 3 times target every time , price may reverse or never reach targets this means in simple we can only manage loss and reward is left to market

Actually daytrading is applicable but we have to spend our time to analyze the whole market and see the chart of each coin and which coin that potential to rise today. Because each day must be there are several coins that experienced a rise. We just have to aim for less than 3% target to do daily earning for daytrading. And make sure we are selling and buying with limit order because it won't have fee for the trades.

Yes exactly, most important thing too is learning to control the emotion, not just taking risk every day as you wanted to earn everyday as not every time the market condition is good, not everyday is perfect to trade at, so let's not be too greedy for that, that we are aiming for everyday income as it might lead to us to higher loss for being too aggressive in trading.

I surely get your point about one losing for another to profit 
But on the issue of setting a 3% profit target and either you take it out and the market rolled out a 10% profit eventually on that same instance after you had gone out, if this thought of had I known or feeling of sadness keep going on, then you now see a trader over staying in a particular market and might be punished with losses.

Veterans may end up not looking or caring about these things because they already know them and they sometimes get too confident.

Not because they don't know them or they don't understand them, they do know all of these if they spent a bit of time but unfortunately sometimes they get too snob and confident about how they trade and forget to check these things which ends up with them not caring about it.

Yes, that is still a mistake and they should be checking every single risk management but it is not the same as newbies not even knowing what these are and that is why losing money, both end up with the same result but they go there from the different routes. I don't know if it should matter if their routes are different when their results are the same but there is that difference for sure.

•Risk Reward Ratio
•Compounding
•Dont go all in on a certain day.

3 important factors that should be considered first but these things can be acquired through experience.
Trial and error for short.These things might be very basic but these are the crucial ones that needed to be learned.

Thanks a lot for your appreciation. I think growth is always better when it happens together. I have learnt these things because someone was kind enough to teach me this so It is my duty to spread the word even more. But really truth is newbie are still pretty reluctant to apply this information in their trading simply because following these rules takes effort and everyone wants to get rich quick. When it comes to trading people really think that it's magic Wand but I would really like to tell you that there is no IqOption or Olymptrade in reality. Making Money overnight is either sheer luck or a complete scam.

This is really a very big secret that you have exposed to people and I must commend you for being a selfless person because we have so many traders that would not want the newbies to know this and they enjoy when they see them make some mistake or want a situation where they would want them to consult them to trade on their behalf so they can get some money from them, some rather than showing them the secret would even tell them to come and pay for a signal that will eventually not work at the end of the trade.

But, I strongly believe that if there is any newbie that will pay attention to this strategies and advises of yours, the sky would be their limit and even me that feel I am good at trading, I have been able to pick one or two things from these points that you have here which I will apply also form now.

And if you think only long term trading is profitable then maybe you haven't seen the scalpers trading. They trade like each minute for them is equivalent to an hour. I think long term trading is nothing but a self fulfilling prophecy. People would just buy or sell with the flow of market and would earn profit if they are right and if they are wrong they will blame the whole market to have been gone on the opposite side. Complications would be solved only if you practice the same thing multiple times.

The safest way to trade is doing the long-term trading and by doing this you can easily spot the movement of the market in a wide view unlike those who do short-term trading which has a very limited view of the movement of the market specially the day traders. That's why it is recommended for newbies to start the basic first before jumping to the complicated strategy.

But it's better atleast to learn from someone's else mistake than to do same mistakes again and lose money.
The best thing is to go with a pretty less capital. Like $100 which won't hurt when you lose it. It still is enough but you have to stick by the rules and create discipline. This way you can save your capital from brutal market unless you familiarise yourself with the rules. If you stick by the rules it would take around 40-50 losing trades to lose entire capital of $100

Lol, I think he's really confused.. The only thing that matters to me is myself when it comes to trading. Whether someone is losing or not is none of my business. I don't see why I should be worrying about what others are making and what they are losing, when my main concern should be on my own trade and whether I'm earning or not. If someone is losing then it's best for them to quit.

I appreciate that you took time out to write and teach all these because it's not everyone that has this kind of time, I can't even write this much. And to be honest, this is the first time I'm seeing anyone break down risk management to this level where it's easy to understand. There are many people who don't know this, and they will find this helpful. There are lots of things to learn in trading and here is one of them.

Yeah some newbie are not bother about the basics and they're just jumped to the market and they will find the knowledge like this when they're experienced a big loss. This is an usual thing happens in crypto and even the experts who alraedy mastered the knowledge of trading is also experienced a big loss due to the crypto agility and unpredictablity in terms of price

I think it will be too hard for newbies to understand and apply this strategy. However, it will be helpful as well. Every beginner could make their own strategy by simply applying the basics. Dealing with the market's vootality is another advantage. Trading is like a trial and error thing so we have to keep on learning.

Amongst that, of course they keep learning from experience, maybe only those who are looking for money will never learn. But for those who want to explore and research this brutal market will surely find the answer behind it, I'm sure there is a secret behind this market that we might not know about.

When the whale is able to make the price go up and down then why can't we, we just have to play like the whale is playing.

This post should not be applicable for all the newbie traders, There are a lot of newbie traders who've managed a good amount of money by this system, whatever the issue is, Your risk management factors are really appreciable. in addition to this post, I also think that sometimes newbie people could have a huge expectation from the trading platform so they often with huge money, That's way too much trading bring back to a massive loss. another mentionable is that newbie sometimes often makes a decision based on their emotion rather than experience. so a bit careful could prevent themselves from their loss by the trading platform.

Honestly i am not read every post yet, so i will ask question that still on my mind. When market like in a dump trend, and we set stop loss in that percent from our capital, what can we do if we keep losing. I mean, not all people know in what price they can buy a coin and maybe this need people's own analysis. So, in a dump trend when we cut lose every price reach our limit of loss, is that means we have possibility to get more lose than a win? or maybe there is a way for people to know where good price to buy a coin.

I don't think many people reach that point. If we look at how people keep losing with stocks, a more calculated market that has been trading for decades, they will never learn anything in the crypto space.

Crypto comes with even more risk, plus when you trade on platforms as BitMEX the whales there just wick the price up and down to get your position to liquidate. It's a very brutal market people will not get comfortable with.

Actually it's easier said than done.  I have nowhere said that it's something anyone can achieve because you might get 2% one day but when you will face a loss the next day you will try & earn the 2% you lost previous day too and would go for 4% and things could become worse after that. So it's better to forget the previous day and focus on getting 2% today.I agree that varies from situation from situation but what newbie traders do is that they keep a low R/R and satisfy themselves with some prophecy to convince them what they are doing right but instead all what they are doing is holding a trade which is going on the opposite side and not selling it in time.

The instant answer could be because newbie traders don't know the details of trading as much as a veteran one?
I mean simply when you first start the only thing you can think of is "buying cheap and selling high" and that's it, you have no clue how that is not, you have no idea about indicators, trends, big whales, the manipulators, the resistance/support levels and many other stuff, all those things with ways to buy and sell like stop loss, buy order and many others all still unknown to you when you first start.

It means there are still a lot to learn but of course would end up with losing a bit of money while people are still newbies, with time they will learn all of it and every single detail and become a veteran themselves as well, nobody born veteran, they become one.

Many newbies are lazy to analyze the market, moreover regulate the capital that will be used for trading. So there are many
newbie traders lose money. Thank you for sharing about risk management basics, thereby minimizing newbies experience
running out of capital when trading. I pay more attention to step 3: don't risk everything in one day, this is the most point
influential for the newbie in my opinion. Because most newbies when trading directly all in with their capital, because believe
in the trading signal pump and dump that he gets. But if it happens it is very risky, especially following trading signals that
are not yet clear its accuracy.

Many successful traders always advise beginners to cultivate discipline and risk management. The most important thing is to develop your own system and not deviate from it, otherwise you will incur losses.

If you're especially new to trading, you don't necessarily need to set profit targets for yourself to reach at first either. I found that I got extremely stressed and performed worse when I started out trading and trying to hit my own personal targets, even when those targets were low, and most people extremely new to trading crash and burn a few times at first as well. You should still be adhering to your risk management plan whether or not you've got a profit target, though.

Also realize that you should not be basing your stops only with the R/R ratio. The market does not care about where your stops are, so use technical analysis whenever possible first before worrying about whatever R/R target you want. You'll be stopped out less this way. I also don't believe in having a certain minimum R/R per trade; this varies from situation to situation and there's times when the R/R of one trade's lower than another, and that's just fine.

*Don't risk Everything in one day

I agree with this. Decision making and self-control are very important in trading and pretty obvious that noobs will always mismanage themselves and even caught into overspending. It for sure, they know that risk but is something there is a need to further enhance their understanding of the risk that they are facing today for them not to lose everything they had in just one day.

I think your second point about the power of compounding is something a lot of ppl forget, thanks for the well-written post. 2% a day would be a great target, and isn't too far off. Especially if you do some arbitrage trading as well.

The hype around BTC and cryptocurrencies is rapidly growing, so many people are encouraged to enter the market with their assets, because all of their surrounding medias are telling them stories. In 2019, if you are a person who just found out that cryptocurrencies exists - first informations you'll receive is not a basic knowledge how the cryptocurrencies (or any other) market works, but you'll find a flood of empty words like 'earn money' 'earn money quickly' etc. pumping those newcomers with stories how somebody bought BTC for X$ couple years ago and now he is millionaire, billionaire or whatever. My point is - mainstream medias aren't talking about the background, knowledge you need to have to invest and they won't do it, it's not their job/role in the modern society. It's a throwing people in at the deep end. If you ask those people whether they would invest in stocks, almost certainly they would say no. Why? "Because I have no idea about stock market". Neither they don't need to have an idea what the hell cryptocurrencies are, but who cares - the communiques intercepted by them are clear - you don't need anything to make money. And guess what - it's not all about the money.

You don't need to be an educated economist or professional trader to trade crypto - but it's better for you if you are one.

people working in the industry might be effect by knowing everything and losing their fun but we can see the people still introducing a new business to start trading with their hard earned money.
We as a people we need to to explain the newbies how to deal the cryptocurrencies usage in the marketplace as well in the trading site before they getting into it.

I don't think newbies are losing money because they simply cannot calculate the risk to reward ratio everytime they trade they just simply don't know how to trade at all. They enter the market thinking that the only thing they need to do is to buy cryptocurrencies and if it starts to go down they would panic without any kind of exit strategy or alternative plans ones that happens. They simply trade without any kind of plan or without any kind of knowledge backing their trades making them lose more money in the process. Still what they need to learn first is of course how to trade with technical analysis because this is their shield and sword in the market without it they are still newbies guessing where to buy and sell.

Very well said. I tried to concise the information so it doesn't becomes boring. There are books written on merely risk Management. If anyone wants to read those books here are name of some
1. A Trader's Money Management System - by Bennett A. McDowell
2. Market Wizards- By Jack D. Schwager
3. How to Day Trade for a Living - Andrew Aziz
This can be a good idea to test your strategies. Some people say that they should do paper trading but even trading with a very small capital gives you touch of real money and something which won't burn if you lose it completely.

Newbie traders losing when they try too many things which still they are not familiar yet,which could be related to don't risk everything in one day.We have to learn the things and find which will suit for us,until that keep the trade capital as negligible value from the total capital even $100 can teach lot things than learning from other.

Well, this is a good explaination OP and I like this number 1 risk management.
Risking money is hard to speculate but at least you know that anytime what will happen you are risking that you can afford.
Actually, In essence, in order to calculate the risk-reward ratio you only need three components:

1] Entry Price
2] Stop Loss
3] Take Profit

Try to refer to my source for further knowledge and I think the 3 basics are quite a lack of information.
Source: https://tradingstrategyguides.com/trading-risk-management-strategy/

Your opinion is correct, but managing risks and disciplining in trading is extremely difficult for beginners. When I first trade I was affected by many things like news, other traders, Fears, ... All of which made me unable to keep discipline in all transactions.

Thank you for sharing your thoughts, I am trading since 2016 but I have not equipped my self that too much TA.
I am eager to learn but I am not really good with numbers and formula sometimes I feel really down bcoz of understanding things slowly.
I dream to be a good trader someday.

Pretty well said but even step 1 & 2 are essential for everyone. Because instead of expecting odds to be in your favour you should keep the whole game in your favour.
You know everything in this world is theory and you have to learn to do practical your self. Even if I show mu trading history that would just be like appealing people towards me they won't learn anything from it. Everyone has it's own style of trading which requires persistent hard work. Even when it comes to trading there is no overnight money. If you are thinking trading is some get rich quick scheme then you must leave trading ASAP it would only lose you money. Even the trading calls are scam and nothing else.

Every trades can be a confidential matters, that's why I was not giving much attention on trading guides. Realtime trading is a good idea for taking quicker decisions, despite of the difficulties encountered. Crypto exchanges will always rely on traders, so it's very important to make sure to it that we're trading our promising asset beyond berish times.

Such matters have often been discussed, in theory it might be easy, but the facts are difficult to apply, if you really have the secret in mastering trading, try to show your trading history, unfortunately in the crypto exchange there are no facilities to follow one's trading, so we can monitor other people's trades in real time.

That's alot thing to do. Well I might go for DON'T LOSE EVERYTHING AT ONE DAY it will surely lessen the probability of losing alot of money. Anyway step 1 and step 2 is for critical analysis of an exact computation of your decreasing your potential loss, and step 3 is for basic handling your potential loss which I recommend for everyone.

Yes. This is really one of the very important knowledge. Many newbies really don't know how important capital management is. They are only interested in their indicators and profit after each position is opened.
That's why more than 95% of the original traders often got burned out.
They really need to read this article to better understand how much speculation is sufficient and reasonable.

Thanks for calling me a trade Guru By the way. And yes atleast read the whole post before writing anything merely for money, don't take it wrongly yes I can answer your questions if they really are questions.

This is the most lame excuse I am listening from someone who doesn't wants to learn something. You know only 2% traders in this market are profitable. And if you really want to be in these 2% then this might be a secret you want to hear. But trust me even out of 200 who learn this secret only 4-5 people would be able to implement it because it requires strict discipline. So if you want to think that someone will lose if I make profit better try to retire and go for the path of enlightenment.
It's called creating a discipline best way is to put a trailing stop loss once target is hit because no one has a magic ball to predict how far price is going to go. Moreover limiting your losses comes with a practice of limiting your profits too and this is called intelligence in long term.
The only line which i feel is pretty relevant in your post. This exactly is a very good point. I will surely bring this up in part-II. you don't have to be emotional regarding your loss and will have to focus on next day. But here in this post all I told about was Risk Limiting and not emotional profit taking.

After read in Step 2 : Understanding power of compounding, the calculation are vey interesting and will definitely make traders interested in this, but remember that even trader do trade with large capital and make daily profit target small, this is still not easy to always get profits in trading. In my opinion the power of compounding only suitable in shares investment that will certainly provide devidens, long term investment or anykind of investment that give fixed profit.

Are you one of that "Trade Gurus" and decided to reveal the secret?
Well, I appreciate what you wrote, don't take it wrongly but please can you answer me on one question? When you profit, it means someone loses yeah? So in any way someone has to lose, doesn't matter how experienced these traders are, one can't profit without another ones' lose.
And what about to forget targets? I think you can't plan economy because your plan of daily 3% may ruin chance of getting 10% profit or you even won't reach your target so this means your plans failed? And some may start digging to get that planned profit next day combined with tomorrow's plan and it will ruin everything, especially when we talk about newbies.

Most of the people think that Trading is merely learning to read charts and then buying low and selling High. But that is absolutely wrong! This is the main reason why certain newbie Traders don't make money. I would tell you a secret which most of the Trade gurus don't tell you while they teach you trading. first of all to understand the Importance of Risk Management I would like you to go see this Post of Mine:

https://bitcointalksearch.org/topic/m.53013312

Now going through the basics. I would teach you how to learn basics of Risk Management and you will learn how to do a disciplined trading.

STEP 1: Understanding Risk to Reward Ratio
Risk to Reward Ratio is the most solid strategy provided by Risk Management Theory. It is called Risk to Reward but actually is Reward to Risk Ratio It basically is a ration which is developed by this formula

Profit you can earn per trade(Difference from Target to Entry)
_________________________________________________
Risk you take per trade (Difference from Stop Loss to Entry)

This means for example if you take a trade at $10000 and your pattern says a target of $10200 and stop loss at $9900. Now feeding in the values in formula:

$10200-$10000             $200         2
____________      =     __________   =   _ = 2:1
$10000-$9900               $100         1

This signifies that there is double the profit potential than the assessed Risk. Now Ideally people would say that 2:1 is the best ratio but I think it should be the minimum atleast until you become an intermediate trader who can have control on his emotions. How this is important? I would quote my own post:

STEP 2: Understanding Power of Compounding
What most traders forget is that aim is to be profitable in long term and earn money and not to just hit a good trade today. So bring the power of compounding in your play. Set small daily targets like 2%-3%. This might seem small but no matter what is your account size this is the only way to earn profits.

Have a look: If you have an account size of $1000 and earn just 2% daily. Trust me it might seem very easy but it isn't that easy to earn 2% consistently unless you keenly apply Risk management. Now,

Earning 2% for merely 100 days would make your capital like:    1000 x (1+0.02)¹⁰⁰ .
The answer would be $7376. This means you would make 7 times of your capital merely by earning 2% daily for 100 days. [People think that compounding is only a long term concept but truth is it can be applied to short term trading too.

STEP 3: Don't Risk everything in one day
You are fighting a war against the world and not merely a battle. A true warrior doesn't gets exhausted in one battle because he is here to fight a war. So never ever risk more than 3% of your capital in a day. Now you have to determine what is risking your capital. we have studies in step 1 that maintain a risk to reward ration so this risk ratio should be something in numeric terms say for example taking example taken in step 1 Risk was of $100. Now if your total capital was $20000. You are risking 0.5% in a trade which is way below the risk cap of 3%
$100
______  =  0.5%
$20000
So no matter how much capital you use in a trade but the risk per trade should never ever exceed what is the maximum risk cap.


These are basic 3 steps towards risk management. If you have any questions I would love to answer them. I would even have a FAQ below this thread about whatever major questions everyone is getting. Moreover I would love to come up with Part-2 of this thread where I would teach some intermediate principles. Stay tuned and I would love seek opinions of anyone who are not in agreement with these points.