Risk management is very important asset to us traders. Because you can't earn your profit if you don't try and you're afraid to loose. Always remember that risk only what you can afford to loose,. We must need to learn how to handle your emotions dont be so excited much when trading, think first before letting your asset.
I always think three times before deciding to invest, and this has helped me greatly reduce the risk of buying. In fact, any investment can put you at risk, and this is inevitable. However, if you have the right strategy and investment, you will get out of this situation because the crypto market is always volatile, and you need to change every day to become better. 
Topic: Why risk management is so important ? (Read 1441 times)
Risk management is very important asset to us traders. Because you can't earn your profit if you don't try and you're afraid to loose. Always remember that risk only what you can afford to loose,. We must need to learn how to handle your emotions dont be so excited much when trading, think first before letting your asset.
Risk management is an essential part of trading. Without considering risk management, It is very difficult to earn a profit. If you do not learn about risk management, then you will lose your asset. No one can trade accurately and every trade will not go for profit. So when anyone opens a trade they should calculate the risk and take proper steps to reduce loss. An investor can not become successful without he invests his assets under considering risk management. So everyone should learn some basics about risk management.
^ All in form of business will have this risk management, this is very important to all who invest and putting money into the business. So, in order to execute stop losses activity, this risk managing tactic is very useful though. Pro traders said that do not risk more than you can afford to lose, you should spare your daily need and do not risk more than 15% of your monthly income. Moreover, this risk management will give clarity on the mind not to be the focus on trading, as they said. Do not put all your eggs in one basket. Nevertheless, there are three components of risk, the position sizing, reward ratio, and the Stop-Loss and Take Profit.This doesnt only apply on trading but in all of investment means.It is important because if you dont take this one seriously then it will surely give an impact on investment that you've into.
It is not that people do not know how to do risk management because there is tons of places that teaches you how to do it these days, but more about how people are not really caring about it when they get super hyped and suddenly make a trade that they didn't intended on doing and suddenly they did it. That is how some people trade, they see something, they get excited, they think it is AMAZIIIING and suddenly they end up buying it, mostly during pumps these things come out because people see something going up and they want to be part of it as well.
There is no risk management for a person who is so caught up in the moment that he literally decides to buy right there on the spot something that he barely has researched before and just saw it increasing and jumped in the pump.
There is no risk management for a person who is so caught up in the moment that he literally decides to buy right there on the spot something that he barely has researched before and just saw it increasing and jumped in the pump.
Risk management is very important for anyone to make a consistent reliable income in crypto space. Someone needs to calculate the risk before venturing into it and use all necessary tools like stop-loss to prevent a sudden crash
Agree, in the same way, fund management is one of the factors we need to consider in order to control risk management. Based on the fund management, we might control the looses by holding safe fund, by place stop-loss, etc. Trading itself, we should manage all these categories, otherwise, we will end in up in looses.
Risk management is an essential part of trading. Without considering risk management, It is very difficult to earn a profit. If you do not learn about risk management, then you will lose your asset. No one can trade accurately and every trade will not go for profit. So when anyone opens a trade they should calculate the risk and take proper steps to reduce loss. An investor can not become successful without he invests his assets under considering risk management. So everyone should learn some basics about risk management.
^ All in form of business will have this risk management, this is very important to all who invest and putting money into the business. So, in order to execute stop losses activity, this risk managing tactic is very useful though. Pro traders said that do not risk more than you can afford to lose, you should spare your daily need and do not risk more than 15% of your monthly income. Moreover, this risk management will give clarity on the mind not to be the focus on trading, as they said. Do not put all your eggs in one basket. Nevertheless, there are three components of risk, the position sizing, reward ratio, and the Stop-Loss and Take Profit. 
Risk management is very important for anyone to make a consistent reliable income in crypto space. Someone needs to calculate the risk before venturing into it and use all necessary tools like stop-loss to prevent a sudden crash
Agree, in the same way, fund management is one of the factors we need to consider in order to control risk management. Based on the fund management, we might control the looses by holding safe fund, by place stop-loss, etc. Trading itself, we should manage all these categories, otherwise, we will end in up in looses.
Let's dive in n take a look Why risk management is so important ?
If you enter a $100 trade and lose 15%, you’re down to $85.
If you make 15% profit on your next trade, now you have $97.75
It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.
Also win % does not make a successful trader, but strategy and risk management do.
For example:
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Risk management helps cut down losses. It can also help protect a trader's account from losing all of his or her money. The risk occurs when the trader suffers a loss. If it can be managed it, the trader can open him or herself up to making money in the market If you enter a $100 trade and lose 15%, you’re down to $85.
If you make 15% profit on your next trade, now you have $97.75
It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.
Also win % does not make a successful trader, but strategy and risk management do.
For example:
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Risk management is very important for anyone to make a consistent reliable income in crypto space. Someone needs to calculate the risk before venturing into it and use all necessary tools like stop-loss to prevent a sudden crash
Of course risk management is the first thing that makes a trader perfect. Without having it, a trader can loss all his fund in treading. So Its impossible being a perfect trader without having this skill. But without risk, it's not possible to become successful in life
In every aspect of the business, there is risk involved in it, even though we lost money in trading, but based on the experience we have we should recover those funds. Experiences will help us to find a way how to overcome previous looses, in trading it is impossible to make profits, so based on the situation we should apply our ethics in trading.
Risk management is an essential part of trading. Without considering risk management, It is very difficult to earn a profit. If you do not learn about risk management, then you will lose your asset. No one can trade accurately and every trade will not go for profit. So when anyone opens a trade they should calculate the risk and take proper steps to reduce loss. An investor can not become successful without he invests his assets under considering risk management. So everyone should learn some basics about risk management.
All the money making one will have some risk with itself.Trading is also a one among them,you need to make some risk to earn more money from it.Patience is also a needed with a risk making,this two will get huge and unbelievable profit for sure.If you inverse money for long term ,it will away you from risk.
Risk management is an essential part of trading. Without considering risk management, It is very difficult to earn a profit. If you do not learn about risk management, then you will lose your asset. No one can trade accurately and every trade will not go for profit. So when anyone opens a trade they should calculate the risk and take proper steps to reduce loss. An investor can not become successful without he invests his assets under considering risk management. So everyone should learn some basics about risk management.
If you were the standard trader of you'd create a risk management plan for yourself. Risk management is how we can manage the money that we will use in trading, and how we deal with the risk, so our loss will not be bigger. I admitted that it is difficult, but if we don't try, we will never learn how to prevent the risk. Traders are usually focusing on the money that they may earn and not the money that they may lose and that is why when they all in their money in just one trade, they suffer huge losses that takes time in order for them to recover it. So no matter how broad your knowledge is without your capital management skills, you'll soon be out of this game. The market fluctuates unpredictably so capital management is very important. We need to measure our steps and ensure that we can mitigate risk as much as possible and take the corrective step in order to gain.
I always create a suitable plan to reduce the risk of choosing to invest in this market, but sometimes those plans are often not the same as my initial thought. The crypto market is very volatile, and even a small mistake can cost you everything, so I am always very careful when buying or selling. Of course, I always recommend three ways to manage risk for myself and always reserve more ways to prevent when the market suddenly collapses. 
I believe only the money I withdraw from the exchange is what I win. Then ones in exchange are all my loss.
It is very strict, I know. While, it is the first we need to think before we invest, identify the risks. What if you lose all your coins? Nothing will worse than lose all, right? We can still support our live even we lose all. Then, do analyze, treat, monitor and review the risks.
Risk management is important. We need to know what we can lose before every start.
They say traders should know how to handle the risk they put in trading but i believe it's different already when you are in the real field of trading. You still need to control the risk but traders are more into making profits especially if we see good opportunities around. So we stick with our own plans and do the risks whatever it takes. It is very strict, I know. While, it is the first we need to think before we invest, identify the risks. What if you lose all your coins? Nothing will worse than lose all, right? We can still support our live even we lose all. Then, do analyze, treat, monitor and review the risks.
Risk management is important. We need to know what we can lose before every start.
I believe only the money I withdraw from the exchange is what I win. Then ones in exchange are all my loss.
It is very strict, I know. While, it is the first we need to think before we invest, identify the risks. What if you lose all your coins? Nothing will worse than lose all, right? We can still support our live even we lose all. Then, do analyze, treat, monitor and review the risks.
Risk management is important. We need to know what we can lose before every start.
It is very strict, I know. While, it is the first we need to think before we invest, identify the risks. What if you lose all your coins? Nothing will worse than lose all, right? We can still support our live even we lose all. Then, do analyze, treat, monitor and review the risks.
Risk management is important. We need to know what we can lose before every start.
Everything should really be done before throwing up some money into various investments that you had considered because if not then you will surely got stressed nor even rage out when you do lose money.
You should accept from the start that theres always a chance on losing on what you had invested thats why its always ideal to calculate on the risk you are tending to give out for a specific return that you are expecting.
This one might vary on each individual though but in overall sense, its just really the same.
Okay you're right, but saying win percentage doesn't make a successful trade, to me that's wrong lol. What else are we doing this for, if not to make enough win and earn money? Yes in a way you're right, it's good to learn how to manage our loss properly. That's very important.
But, the main purpose of everything still lands at making more win percentage. You're doing that because you don't want your loss percentage to be more than your winning percentage. That's why it's important to know everything there is to know about risk management and preserve our capital. I heard that professional traders are making less number of losing trades compared to winning trades. But, that does not make sense after coming across the example you have mentioned
.
But, the main purpose of everything still lands at making more win percentage. You're doing that because you don't want your loss percentage to be more than your winning percentage. That's why it's important to know everything there is to know about risk management and preserve our capital. I heard that professional traders are making less number of losing trades compared to winning trades. But, that does not make sense after coming across the example you have mentioned
.
I believe only the money I withdraw from the exchange is what I win. Then ones in exchange are all my loss.
It is very strict, I know. While, it is the first we need to think before we invest, identify the risks. What if you lose all your coins? Nothing will worse than lose all, right? We can still support our live even we lose all. Then, do analyze, treat, monitor and review the risks.
Risk management is important. We need to know what we can lose before every start.
It is very strict, I know. While, it is the first we need to think before we invest, identify the risks. What if you lose all your coins? Nothing will worse than lose all, right? We can still support our live even we lose all. Then, do analyze, treat, monitor and review the risks.
Risk management is important. We need to know what we can lose before every start.
The important idea given to risk management by the veterans all was because you could lose all of your money very quickly if you start to do stuff that are very risky very quickly. Hence at the end of the day, there is no way you could start right away and go for x100 leverage suddenly, you have to make sure you do your risk management according to your talents. However risk management changes from person to person, trader to trader.
If you are a dentist that puts aside 1000 dollars to trade on bitcoin you are usually more careful, even though what you would lose is still 1000 dollars and not much of a deal globally, its still your money and you take care of it. However when you are a trader for a huge hedge fund that deals with bitcoin, you are usually less careful since you know what you are doing better and if you lose there is more to come.
If you are a dentist that puts aside 1000 dollars to trade on bitcoin you are usually more careful, even though what you would lose is still 1000 dollars and not much of a deal globally, its still your money and you take care of it. However when you are a trader for a huge hedge fund that deals with bitcoin, you are usually less careful since you know what you are doing better and if you lose there is more to come.
If you were the standard trader of you'd create a risk management plan for yourself. Risk management is how we can manage the money that we will use in trading, and how we deal with the risk, so our loss will not be bigger. I admitted that it is difficult, but if we don't try, we will never learn how to prevent the risk. Traders are usually focusing on the money that they may earn and not the money that they may lose and that is why when they all in their money in just one trade, they suffer huge losses that takes time in order for them to recover it. So no matter how broad your knowledge is without your capital management skills, you'll soon be out of this game. The market fluctuates unpredictably so capital management is very important. We need to measure our steps and ensure that we can mitigate risk as much as possible and take the corrective step in order to gain.
I agree that risk management is very important, but it is not as easy as one might imagine doing risk management. Logic is needed
in thinking when doing risk management and not everyone likes to think with logic. I after using risk management when trading,
i can get maximum results. Even when using risk management, when the market is bad, my capital can be saved. So risk management
is really important for trading.
in thinking when doing risk management and not everyone likes to think with logic. I after using risk management when trading,
i can get maximum results. Even when using risk management, when the market is bad, my capital can be saved. So risk management
is really important for trading.
Risk management is very important in trading and you need to have discipline to be able to follow the proper risk management, this is what most traders dont have. One of my best attribute as a trader is being disciplined because i never over leverage.
The general rule in trading is never risk more than 1-3% of your trading account which is the best thing.
If i have an 100$ account that means i am just risking 3$ to make about 6$ depending on how many pips i am willing to take from the market
The general rule in trading is never risk more than 1-3% of your trading account which is the best thing.
If i have an 100$ account that means i am just risking 3$ to make about 6$ depending on how many pips i am willing to take from the market
why is important for me because it will prevent me from big loss , i just thinking about it again before making some decisions and count how much risk that i put on something
Risk management is most important thing in trading because every trader only keep on their mind about how much profit will got and not care about chance to lost with their trading, we must ready with risk management like cut lost when getting assets trading is little chance to get profit and we must take other chance with other coin have bigger chance for profitable.
In trading, I always set a stop loss after buying and certainly will never be greedy when that coin goes up. I have a clear original strategy and will sell when I have made enough profit according to my strategy. Of course, sometimes these coins usually go up higher, but I do not regret, because investment opportunities are always available to me in this market. hero member
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I once had a friend who lost over $20,000 back when Crypto money was too much for him to even understand what he was doing. Risk management is the number step one has to make before investing so Much in a business.
If your friend knows what he needs to do before he invests in crypto, I am sure he will make a lot of profit because he uses big money to invest. Risk management will be there, but we can minimize the risk by analyzing before we invest, so we know what step we need to do. Besides that, we need to know the amount of money that we should use to invest so if something wrong happens, we can use the other strategy to prevent another loss.
Risk management is most important thing in trading because every trader only keep on their mind about how much profit will got and not care about chance to lost with their trading, we must ready with risk management like cut lost when getting assets trading is little chance to get profit and we must take other chance with other coin have bigger chance for profitable.
I once had a friend who lost over $20,000 back when Crypto money was too much for him to even understand what he was doing. Risk management is the number step one has to make before investing so Much in a business.
Managing risk is not always easy because you must always be careful before any investment. In investing, this step is very important, and even professional investors can lose money when participating. Before investing, you need to have a specific plan and always think many times before buying because if not careful, you will be the next victim of the crypto market.
I once had a friend who lost over $20,000 back when Crypto money was too much for him to even understand what he was doing. Risk management is the number step one has to make before investing so Much in a business.
It is very important to be disciplined,to master self-control,and to avoid being greedy...Risk managment is not easy to master,you have to be patient and wait for the best time to enter a trade
Risk management is really important as it helps cut down losses. It can also help protect a trader's account from losing all of his or her money. The risk occurs when the trader suffers a loss. After all, a trader who has generated substantial profits can lose it all in just one or two bad trades without a proper risk management strategy.
Of course risk management is the first thing that makes a trader perfect. Without having it, a trader can loss all his fund in treading. So Its impossible being a perfect trader without having this skill. But without risk, it's not possible to become successful in life
Right, we need both skill/knowledge and risk management in order to be a successful trader, also for staying/surviving in the field of any assets trading whatever it's cryptocurrency or forex or stock tradings. Especially, risk management is the key factor of trading like FA and TA. Frome my experience, I lost some funds in margin trading because of not using the stop-loss tool or risk management at the beginnings. But I fully aware of this and recover my previous losses by using the risk management and also making profit by taking risks. Trading on the live exchange is actually harder than how written contents usually convey it but you are right about one thing though, taking calculated risk is the key to success in any volatile market because the wave and charts can go against you any moment no matter how pro of a trader you seems to be.
Because crypto trading in real life is somewhat different. It was very hard to manage ourselves when we have a little patient and knowledge in trading and quite to see that some traders are quitting and leave because they don't really understand the situation.It is just unfortunate that most trader don't yield to the warning of trading what you can afford to lose or a spare cash
And then, it was an unfortunate thing that they couldn't even manage to take the risk and handle the stress they actually live. That even you are an expert and pro traders, you can't simply think that trading we work so easily, yet it was a stressful job especially when the market turns into bearish.
Trading on the live exchange is actually harder than how written contents usually convey it but you are right about one thing though, taking calculated risk is the key to success in any volatile market because the wave and charts can go against you any moment no matter how pro of a trader you seems to be. It is just unfortunate that most trader don't yield to the warning of trading what you can afford to lose or a spare cash
Risk management is very important. An investor cannot become successful unless he or she uses risk management properly. From my own experience, I have not seen the face of profit until I have followed risk management, but since I have been following it, Since then I have been able to calculate the profit and loss of monthly trading and bring out the monthly profit.
It's right. Risk management is critical for trading. Besides the knowledge about the market, you also have to learn how to manage the risk. Sometime you'll need to accept the risk if the chance of creating profit is large enough. The more profits, the more risks that you have to face. In a new-born market such as cryptocurrency market, there are a lot of risks. Therefore, without doing risk management, traders have a great risk of losing their money for nothing. Risk management is critically needed not only on crypto but in any investment because this would be your weapon to be profitable no matter what kind of investment you are into.You should know on what you gonna do in terms of risk:reward thing because if not then you would just basically doing gambling at all.Some investors do choose to play much safer or less risk and just accept a few amount of profits and some do really choose up to have bigger risk to gain more.Its just a matter of choice and this will vary out also on how knowledgeable you are into this field.
Could it be because if you do not manage the risk you will end up in bigger trouble than you anticipated in a move that you didn't suspected? You could do a trade or anything that could potentially be riskier than you know and because you didn't do your risk management you end up losing a lot more than you imagined for it. People who make sudden trades that pops up in their heads are the biggest examples of it.
There are tons of people who see a coin going up, they jump the bandwagon but while they are doing it, all those withdraws/deposits trades and so forth takes half an hour or even over an hour and by the time the money is there, the move stops and they end up with nothing in their hands, even lose money when it starts to go down and they didn't sell it before the drop starts.
There are tons of people who see a coin going up, they jump the bandwagon but while they are doing it, all those withdraws/deposits trades and so forth takes half an hour or even over an hour and by the time the money is there, the move stops and they end up with nothing in their hands, even lose money when it starts to go down and they didn't sell it before the drop starts.
Risk management is very important. An investor cannot become successful unless he or she uses risk management properly. From my own experience, I have not seen the face of profit until I have followed risk management, but since I have been following it, Since then I have been able to calculate the profit and loss of monthly trading and bring out the monthly profit.
It's right. Risk management is critical for trading. Besides the knowledge about the market, you also have to learn how to manage the risk. Sometime you'll need to accept the risk if the chance of creating profit is large enough. The more profits, the more risks that you have to face. In a new-born market such as cryptocurrency market, there are a lot of risks. Therefore, without doing risk management, traders have a great risk of losing their money for nothing.
Of course risk management is the first thing that makes a trader perfect. Without having it, a trader can loss all his fund in treading. So Its impossible being a perfect trader without having this skill. But without risk, it's not possible to become successful in life
I agree with you...
Aside the fact that every trader should trade with what he/she can afford to lose, proper risk management is very paramount to having a profitable trading. Reducing mistakes to the bearest minimum should be the utmost priority of every trader as a single lose can cause a huge loss that might results in portfolio burn. Every trader ought to get acquainted with various risk management strategies and to be help them avoid minor or unnecessary risk mistakes
Aside the fact that every trader should trade with what he/she can afford to lose, proper risk management is very paramount to having a profitable trading. Reducing mistakes to the bearest minimum should be the utmost priority of every trader as a single lose can cause a huge loss that might results in portfolio burn. Every trader ought to get acquainted with various risk management strategies and to be help them avoid minor or unnecessary risk mistakes
Risk management is very important. An investor cannot become successful unless he or she uses risk management properly. From my own experience, I have not seen the face of profit until I have followed risk management, but since I have been following it, Since then I have been able to calculate the profit and loss of monthly trading and bring out the monthly profit.
That's right, not only capital management, but also trading strategy. Two people open the same order with the same capital ratio but the result will be completely different from each other. because each person has their own trading strategy and has its own RR ratio. It's best to use the best 1: 3 RR ratio, which is that when you lose, you lose only 1, but when you win, you will have 3. That's quite a great strategy that I'm using, It applies quite well to the forex.
Risk management is what we should focus especially if we want to be consistently earning in the market. Risk management consists of different areas that we should master: first is planning, second is identifying the risk and reward ratio, third is position sizing which is the very important in order to manage the risks very well. Traders are usually focusing on the money that they may earn and not the money that they may lose and that is why when they all in their money in just one trade, they suffer huge losses that takes time in order for them to recover it.
Everyone who engage in cryptocurrency experiences risks and it never go away. We need to accept the fact that risks are always there if there's a money involved, especially in trading, no one is safe when we say there is a risk. It takes courage for you to become confident on what you are manipulating, risk management is the key for us to minimize the probability of losing money and the amount that we are losing.
It is essential for us to become prepared whenever we trade, it is important that we have strategies, we are ready, and we know what to do before we do some transactions. We all want to grow our money that's why as much as possible, always apply risk management in your trading so that you can win in the market consistently.
You should know how to plan, make strategies, become flexible and practice good decision making in order to become a better and effective trader. Don't be scared to fail because if there is failure, there is a lesson that you can obtain.
Look at how noobs suffered a big loss at their entry, that probably because they underestimate the risk in here. It was to accept that learning for mistakes is a thing that could help us to grow and to find which area we've been fails. If we are aware of what we do as a trader, we can find it that most mistakes are coming from the wrong decision. But if we know how to manage the risk in trading, it eventually enhances our decision making. This thing we need to master with.
Indeed risk management is important for every traders because thats how you can control yourself for further losses. Having a plan, strategy and patience are required in order to do it right because if you have no plan and unable to manage the risk of trading you might lose your capital or worse lose the chance to recover it. Its not easy to be a trader and to earn as well however we can maximize our chance to gain by following our plan and ot greedy to earn quick.
without that, I doubt they would trade without seeing the risk. honestly this is one of the factors that make many traders stop. however, risk management is very necessary. consideration of the risks that can be surmounted will make us better prepared, and confident with the decisions we can take.I usually divide the appropriate capital for each of my investments and never spend all my money on buying a coin because the risk is very high. Sometimes I still lose money because of the market volatility. However, after all, I still make a profit again because I always have a second plan when the market suddenly collapses.
It will be bad decision for anyone if they put all there money in the single assets especially if we talk about cryptocurrency since there are series of events where alts get dump by their own devs so if the the person put all his money in this kind of things then he will lose everything, but if they put on several altcoins exist they will have a high chance to recover back if they lose the other holdings.
Would depend on the financial capacity of a certain individual because not all would really have that kind of capability on doing multiple investments
since they do only have sufficient funds for only a few or even a single project that they do tend to invest on.So its really hard to make conclusions that
people do only have single investment doesn't consider out to have lots.Of course those things are in minds but they don't have any choice since they
don't already have money to spent.
There is a saying, "No risk, no gain". That means, where there has a gain, there has a risk of loss. So, risk management is very much important for any trade. But risk management is not so easy. A vast of knowledge is required for analyzing the different variables. Vary few traders engage in trade without knowing such risk management. To be a successful trader, beside risk management, a person should have the ability to analyze different trends of market, gather experience and study the past and present behaviour of market etc
Risk without nothing in this crypto world so it's doesn't matter to me because it's simply combination when i makes small profits. Afterall i hope one day i want take chance a smart trader then risk will less to me. Especially trading means not profits everyday so i will be happy for trading with loss/gain anyone.
Indeed risk management is important for every traders because thats how you can control yourself for further losses. Having a plan, strategy and patience are required in order to do it right because if you have no plan and unable to manage the risk of trading you might lose your capital or worse lose the chance to recover it. Its not easy to be a trader and to earn as well however we can maximize our chance to gain by following our plan and ot greedy to earn quick.
without that, I doubt they would trade without seeing the risk. honestly this is one of the factors that make many traders stop. however, risk management is very necessary. consideration of the risks that can be surmounted will make us better prepared, and confident with the decisions we can take.I usually divide the appropriate capital for each of my investments and never spend all my money on buying a coin because the risk is very high. Sometimes I still lose money because of the market volatility. However, after all, I still make a profit again because I always have a second plan when the market suddenly collapses.
It will be bad decision for anyone if they put all there money in the single assets especially if we talk about cryptocurrency since there are series of events where alts get dump by their own devs so if the the person put all his money in this kind of things then he will lose everything, but if they put on several altcoins exist they will have a high chance to recover back if they lose the other holdings.
Risk is everything in this world and in crypto talking about risk it is at a very high level. If the risk-reward ratio is not favourable, then trading or investing will make no sense as it will only end up losing the money and that too quickly as crypto is highly volatile. We need to measure our steps and ensure that we can mitigate risk as much as possible and take the corrective step in order to gain.
Indeed risk management is important for every traders because thats how you can control yourself for further losses. Having a plan, strategy and patience are required in order to do it right because if you have no plan and unable to manage the risk of trading you might lose your capital or worse lose the chance to recover it. Its not easy to be a trader and to earn as well however we can maximize our chance to gain by following our plan and ot greedy to earn quick.
without that, I doubt they would trade without seeing the risk. honestly this is one of the factors that make many traders stop. however, risk management is very necessary. consideration of the risks that can be surmounted will make us better prepared, and confident with the decisions we can take.I usually divide the appropriate capital for each of my investments and never spend all my money on buying a coin because the risk is very high. Sometimes I still lose money because of the market volatility. However, after all, I still make a profit again because I always have a second plan when the market suddenly collapses.
Indeed risk management is important for every traders because thats how you can control yourself for further losses. Having a plan, strategy and patience are required in order to do it right because if you have no plan and unable to manage the risk of trading you might lose your capital or worse lose the chance to recover it. Its not easy to be a trader and to earn as well however we can maximize our chance to gain by following our plan and ot greedy to earn quick.
without that, I doubt they would trade without seeing the risk. honestly this is one of the factors that make many traders stop. however, risk management is very necessary. consideration of the risks that can be surmounted will make us better prepared, and confident with the decisions we can take. 
Indeed risk management is important for every traders because thats how you can control yourself for further losses. Having a plan, strategy and patience are required in order to do it right because if you have no plan and unable to manage the risk of trading you might lose your capital or worse lose the chance to recover it. Its not easy to be a trader and to earn as well however we can maximize our chance to gain by following our plan and ot greedy to earn quick.
In any investment, there must be a backup plan because the crypto market is often very easy to manipulate, and if not careful you will face a lot of big risks. In the past, I made many mistakes and lost a lot of money when choosing to invest, but now everything is better because I always learn from those failures. One way or another, you should not be greedy and always manage your assets in the best way.
Most people over here mainly loses everything because of poor risk management. Risk/Reward ratio is one of the way to evaluate if the risk is worth taking based on the reward, but this is just a part of the the risk management (evaluation). You could probably add other necessary steps required in risk management.
I guess pre-evaluation alone more than enough to avoid losses. Because when a trade is not good as per your own criteria for risk/reward ration then you may skip it. But usually traders not doing that but they do deliberately trade each and every call without pre-accessing the risk/reward things. When you are selective as per your pre-determined things then you can trade what suits the most as you will not be wasting your time with noises.I guess only traders who bother about preventing losses may able to follow these kinds of management principles more consciously. But I am a trader who forgets all my own discipline rules and may think about my own set of rules only when my trade turns negative.
Before continuing your trading, you must focus on developing self-discipline and emotion control so that you can get back into the tracks of becoming professional trader because even after lots of trade if you are not working on fixing your spotted weakness then there will be no possibility of achieving the level of pro trader. This meme could explain the scenario more better:
I like the idea OP but whats wrong are the application of traders. Some cant help themselve to stop trailing profits resulting to more loses. As a trader risk and discipline are both should work on your part. If you gain enough target already reserved other funds for another schedule cause doing more trades than your normal routine could lead somewhere you dont anticipate happening.
I also trying out to document my trades to help me determine my PNL for all the activities I did. I think this is also a good suggestion for others to know if your experience on trading is improving a lot or not.
I also trying out to document my trades to help me determine my PNL for all the activities I did. I think this is also a good suggestion for others to know if your experience on trading is improving a lot or not.
Indeed risk management is important for every traders because thats how you can control yourself for further losses. Having a plan, strategy and patience are required in order to do it right because if you have no plan and unable to manage the risk of trading you might lose your capital or worse lose the chance to recover it. Its not easy to be a trader and to earn as well however we can maximize our chance to gain by following our plan and ot greedy to earn quick.
Risk management is actually quite important when it involves investment (gambling, trading and anything related to financial transaction). Most people over here mainly loses everything because of poor risk management. Risk/Reward ratio is one of the way to evaluate if the risk is worth taking based on the reward, but this is just a part of the the risk management (evaluation). You could probably add other necessary steps required in risk management.
A high risk portfolio has the chance of making a higher return. So it dynamic thing to keep weighing out assets based on cost benefit ratios thus not everyone's cup of tea, better done by fund managers.
But I believe, anyone can learn those tricks by experience rather than simply studying on books or on materials. I agree the criteria we do set on risk management is not always the same thing but we can simply it by approaching in percentage ratio, for example. I mean all big things are having some short-cuts to make it easier to understand or applicable up to our needed level 
.Remember, when you have intention to gain money through trading or wherever its place something that you should know first is understanding/knowledge. You will be fooled if you don't have a knowledge but you have a high expectation.
Yes, this is all that we do call as risk management. Your expectation should be ONLY on profits but on losses as well. When you have plans about how to manage/afford the losses then you can easily manage and cope up the frustrating losing moments which will help you start focusing one making profits on next opportunity. Yes, risk management will help you to pre-evaluate your potential losses and will help you to plan accordingly.
We knoe that risk management is the process of identifying possible risks, problems or disasters before they happen. This allows business owners to set up procedures to avoid the risk, minimize its impact at the very least help cope with its impact. The crypto market risk management is important at the company level because most companies are exposed to many financial factors and conditions, such as interest rates on short, medium and long-term credit instruments and interest rates and duration of trade payable and receivable for any mission.
It is so difficult to recover lost capital from losses, profits will not always be greater than losses.
Really so you mean this? Why do people keep on trading then if profit will not always be greater than losses. Hey... People are making more profit than losses, you have to learn better ways to make better profit.Trading is depend on your knowledge and on your analysis, you will get profit when you know both of them and you will get lose every time you trade if you don't have both of them.
Remember, when you have intention to gain money through trading or wherever its place something that you should know first is understanding/knowledge. You will be fooled if you don't have a knowledge but you have a high expectation.
Having less loss and having quick profits is basically the method to do it. I had a friend who basically had a system where he had a big bankroll to himself and all he did was keep buying whenever price went down 5% and as soon as he made 5% profit he sold.
So in his mind, if he buys at 100 dollars, he buys more at 95, and more at 90 and more at 85 basically no matter how much it falls, and he sold as soon as whatever the purchase average was 5%+ of that price. That is really not the most perfect method but that was the best risk management I have ever seen. I do not really think there are any better methods than this, it helped that dude to be in profit almost all the time, and never seen him lose too much money neither, sure lost a bit but never too much.
So in his mind, if he buys at 100 dollars, he buys more at 95, and more at 90 and more at 85 basically no matter how much it falls, and he sold as soon as whatever the purchase average was 5%+ of that price. That is really not the most perfect method but that was the best risk management I have ever seen. I do not really think there are any better methods than this, it helped that dude to be in profit almost all the time, and never seen him lose too much money neither, sure lost a bit but never too much.
It's very important that you know how to asses the risk and that you are aware what potential loss you can take. Otherwise you might find yourself in troubled situation and generate too much losses that you can't handle.
Yes, risk management is all about pre-calculating about how much losses a trader may able to afford on unexpected events. Experts usually coin this as "calculated risk". When the traders who are not bothering about how much losses they may face with respect to available capital and how long it may take to recover the losses if happens, then they may not able to sustain in trading over the long run.Unfortunately, not all traders are aware the risk enough or they simply ignore it thinking they will be lucky enough.
But luck doesn't have anything to do with risk and you can't make profit all the time.
If you notice, people are mostly luckier to escape but they may get trapped one day or other. Unfortunately people are learning about risk management only after facing some disaster. It means they start thinking about risk management and start giving importance to it only after gaining considerable experience. But luck doesn't have anything to do with risk and you can't make profit all the time.
Risk management applies to each job Investing without risk isn't possible this is often why investing during a site requires trust and work to avoid risks Crypto market investing is typically not later in gambling. there's a fear of losing more in gambling If we invest in cryptocurrencies then long-term investments are less risky If the worth goes up it's possible to form tons of profit Therefore, to avoid risk you've got to make a decision about where to take a position and wait until the worth rises.
It is so difficult to recover lost capital from losses, profits will not always be greater than losses.
Really so you mean this? Why do people keep on trading then if profit will not always be greater than losses. Hey... People are making more profit than losses, you have to learn better ways to make better profit.
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you have to learn better ways to make better profit.
There's no better way than to study trading
If you really want to be a profiting trader, you should manage your risk and apply all knowledge needed. 
It is so difficult to recover lost capital from losses, profits will not always be greater than losses.
Really so you mean this? Why do people keep on trading then if profit will not always be greater than losses. Hey... People are making more profit than losses, you have to learn better ways to make better profit.
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I have never see any trader that treats trading as gambling that succeed. Risk management allow you to treat trading as business.
To some extent trading needs speculation. The options and futures markets are more or less a gamble even if you are doing Technical analysis every day and night. Spot trading is not gambling though.Risk management depends upon how you diversify the assets being put into a portfolio into different risk classes. A high risk portfolio has the chance of making a higher return. So it dynamic thing to keep weighing out assets based on cost benefit ratios thus not everyone's cup of tea, better done by fund managers.
it would turn out to be beneficial for you in the end of the line then that would be the thing to be select on.This would take lots of trial and errors and a specific span of time.
Patience and trust in the investment is the real key not just risky management in my opinion . Because it would be useless to do such thing always especially in some sort of investing wherein unpredictable, such how long will last and the potential just gain even small profits. .for me much better to make a risky management in some legitimate projects to assure there's a better income after all the efforts you put in it. Just saying. 
Patience and trust are really needed but you should be wise too on when you should cut of this thing for you to avoid further loss since not all that youve patiently waited would really result into positive.Therefore, its still a gamble if you do wait up for too long into something which isnt really that worth.
So this do still involved risk management in the end of the day.
Patience and trust in the investment is the real key not just risky management in my opinion . Because it would be useless to do such thing always especially in some sort of investing wherein unpredictable, such how long will last and the potential just gain even small profits. .for me much better to make a risky management in some legitimate projects to assure there's a better income after all the efforts you put in it. Just saying.
Risk management is the backbone of every successful trading plan.
Most retail investors dont do it though. Then when the market goes bearish then start to panic unless they are already have been through bearish terms previously.Quote
I have never see any trader that treats trading as gambling that succeed. Risk management allow you to treat trading as business.
To some extent trading needs speculation. The options and futures markets are more or less a gamble even if you are doing Technical analysis every day and night. Spot trading is not gambling though.Risk management depends upon how you diversify the assets being put into a portfolio into different risk classes. A high risk portfolio has the chance of making a higher return. So it dynamic thing to keep weighing out assets based on cost benefit ratios thus not everyone's cup of tea, better done by fund managers.
Risk management is the backbone of every successful trading plan. I have never see any trader that treats trading as gambling that succeed. Risk management allow you to treat trading as business.
Right! Not by just trader but every professional should have risk management because risk management can greatly help you in different situations. You can bypass some questions in your mind on what to do next when something unexpected happened.New traders should have risk management skills and engrave it into their minds because this is what every person need especially in trading.
This will help out on how you should set up a particular amount of risk for a specific target or goal that you are trying to achieve.If failed then you should do adjustments, it will really be a fight of
trial and error, until you do make yourself get used to it and gained up experience along the way.
Every medal has two sides and for every action, there is an equal and opposite reaction. Of course everything has risk and trading isn't exception but when you trade, pros have to outweigh cons. But...
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It's harder to recover losses than to preserve funds.
Task isn't that simple. Sometimes for some people loss causes more reward in their brain, so as a result person tries his/her best to overcome this loses and tries to minimize mistakes. Loss can become a motivation of success.Quote
Think of how much you can lose on a trade.
I guess that alone isn't a good advice. You need some optimism and luck during trading along other major things. So if you already think about loses, then you will never be able to risk much and those who doesn't risk, don't get reward.Quote
Also win % does not make a successful trader, but strategy and risk management do.
In any way trading is strategy cause you have to calculate best time to sell and buy. On long term if your win % is higher, in any way you are good trader (call it luck or not). 
Risk management is the backbone of every successful trading plan. I have never see any trader that treats trading as gambling that succeed. Risk management allow you to treat trading as business.
Right! Not by just trader but every professional should have risk management because risk management can greatly help you in different situations. You can bypass some questions in your mind on what to do next when something unexpected happened.New traders should have risk management skills and engrave it into their minds because this is what every person need especially in trading.
Well, i think money management and risk management are the basics for a successful and long term trader without them the trader will lose the capital sooner or later, and the key to this is using stop loss and also never trade with more than 5 percent of your capital at a time. Proper strategy with risk management will make you successful. Also if you are relatively new to trading do not try leverage trading you will lose your funds faster than you can think.
Risk management is the backbone of every successful trading plan. I have never see any trader that treats trading as gambling that succeed. Risk management allow you to treat trading as business.
Managing your risk threshold and performing transactions accordingly is a very difficult thing for every investor, because the next day he needs to earn approximately 11% more of the loss the next day in order to earn the amount he loses. For example, if an investor who lost 5% today will earn 5.56% tomorrow, it will reach the amount of the main currency again. For this reason, we should set the risk threshold well and take action accordingly. On the other hand, I would like to point out that in addition, it is never proportional to 5% gain happiness and 5% loss sadness. For this reason, you should always determine yourself at least 1.5-2% more than your lost cause. Your percentage of earnings should always be higher than the percentage of loss.
It's very important that you know how to asses the risk and that you are aware what potential loss you can take. Otherwise you might find yourself in troubled situation and generate too much losses that you can't handle.
Unfortunately, not all traders are aware the risk enough or they simply ignore it thinking they will be lucky enough.
But luck doesn't have anything to do with risk and you can't make profit all the time.
Unfortunately, not all traders are aware the risk enough or they simply ignore it thinking they will be lucky enough.
But luck doesn't have anything to do with risk and you can't make profit all the time.
This is simple, but many traders ignore this, because if you already know the benefits of controlling the ego and patience will be difficult. It is so difficult to recover lost capital from losses, profits will not always be greater than losses.
According to some people risk management seems complicated, so decide not to do risk management. Including me personally
is not too comfortable when trading applies risk management, it's easier to focus on the percentage of profit. Although it is
a bit risky, but the reality until now going well. So in conclusion everyone has their own way of trading, using risk management or not.
It's just a matter of taste. Just do it according to each person's beliefs, because using risk management is not certain to succeed too.
is not too comfortable when trading applies risk management, it's easier to focus on the percentage of profit. Although it is
a bit risky, but the reality until now going well. So in conclusion everyone has their own way of trading, using risk management or not.
It's just a matter of taste. Just do it according to each person's beliefs, because using risk management is not certain to succeed too.
It's important because trade is like a gambling game. and gamble games often hit the emotions and psychology of many players. So no matter how broad your knowledge is without your capital management skills, you'll soon be out of this game. The market fluctuates unpredictably so capital management is very important. When you lose continuously, the market is not really supporting you. Take a break and wait for a good time to start again.
If you want to find the best method, maybe I would suggest reading about Dr. Elder's capital management method.
If you want to find the best method, maybe I would suggest reading about Dr. Elder's capital management method.
If you cannot manage the risk, you will lose your money sooner or later. So if you want to trade, you should have a plan on how much money you will use in trading so you can avoid the worst thing that can happen in the market. It's about how you manage your money in trading, so when you choose to use all of your money, your risk will be bigger.
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Is a "win rate" really such a thing in crypto trading? From what I know a win rate is something being used by those odd pickers in gambling but not in trading because there is no such thing as a win rate for a trader since the market is to volatile to guarantee such trader being accurate in the market. Risk management is also barely used in the trading lingo but I believ what you are trying to say when risk management is involved is the cutting of losses of a trader to the bare minimum. In your example where the trader have lost 15% of his capital this can be something mitigated or avoided if the trader react way earlier or has a back up plan/ exit strategy when the target price failed to hold, maybe losing only up to 5% is what you will be looking for if you are trying to manage your risk.
Everyone in trading knows that risk management is necessary to prevent losses that can affect your mental health. We all know that when it comes to money, we should make good decisions and execute strategies carefully so that we do not fail when we are having transactions. Always be mindful and aware of the market because that will serve us your basis and also be patient.
In trading, technical analysis will keep you on track about how market moves and your strategies will based on that, by doing that, you should consider the risk the you will take and minimize it as soon as possible.
Minimizing the risk of getting losses in trading will keep you healthy in you trading career so that you can recover easily the money that you've lost. Avoid having a mindset that YOLO in your trading career, that is not applicable in any circumstances most especially if it involves money and cryptocurrency in the market.
Capital management is what is simply called risk management, this is for newbie to understand.
Capital management is how you manage your capital or your principal amount that you are willing to invest, or how you manage incoming capital with every earning. Risk management is how you diversify your assets and reduce/increase them in terms of their projected losses/gains respectively. All this comes with a lot of predictions and foreseeing of the future economies and technology development as to what asset one should hold or should exit from.It is not something like sports betting like the OP seems to say, but needs analysis and a lot of willpower to stick to.
Risk management is very important in everything we do. If you decide to jump into cryptocurrency due to your passion you have for it or because of stories you were told, and without accessing your level of risk, you might just end up losing everything you have. I have seen stories of a lot of people that didn’t manage their money properly and ended up doing the wrong things on cryptocurrency and losing their money. And like I said at first, risk management is important in every level or whatever you’re into.
I also can remember a man who sold everything he had, just to get into cryptocurrency, and another young man that did the same. What if the price should fall through out the year just like in 2018 and you end up losing the money you invested?
I also can remember a man who sold everything he had, just to get into cryptocurrency, and another young man that did the same. What if the price should fall through out the year just like in 2018 and you end up losing the money you invested?
good advice. however, everything before trading needs to be considered. I have also experienced this when the price of coins goes down, then rises, but the total funds that I have do not return 100%. however, many people are not aware of this and continue to trade. knowing this makes us aware of how to keep making the best decisions in trading to minimize risk.
The situation seems so harsh and it really changing the mindset of the people when they got lose of their money. And if they couldn't manage and control themselves then have to expect bad decisions comes.
Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
We make mistakes on our first try but if you’re dedicated to earn money then you should use that mistake to learn for the important things, having the right mindset and knowledge. The market is so risky, without proper risk management you can easily lose money, but hopefully we study first before we do trading and analyze the situation and that’s the best way to minimize the risk and maximize your possible income. Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
The situation seems so harsh and it really changing the mindset of the people when they got lose of their money. And if they couldn't manage and control themselves then have to expect bad decisions comes.
Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
Well, nobody gets it in the first place so they still have to suffer from their mistake first before learning. And that's what we called an experience, the more we commit experience the more we learn and that's the price of knowledge. It might be a hassle for them but it is quite useful in the future. Even professional traders do make some mistakes too so it's just normal to fail but not necessarily needed to fail always because there's something wrong already about that. Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
Managing risk might not be simple but you would able to get it when you already have the knowledge that you have gained on countless trades that you had made.It just matter of learning and this cant be attained overnight
but would take years for you to be that enhanced.Profits will comes next if you do already know on what you are doing.Minimize losses as possible which is the main goal of each trader.
The situation seems so harsh and it really changing the mindset of the people when they got lose of their money. And if they couldn't manage and control themselves then have to expect bad decisions comes.
Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
Well, nobody gets it in the first place so they still have to suffer from their mistake first before learning. And that's what we called an experience, the more we commit experience the more we learn and that's the price of knowledge. It might be a hassle for them but it is quite useful in the future. Even professional traders do make some mistakes too so it's just normal to fail but not necessarily needed to fail always because there's something wrong already about that. Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
The situation seems so harsh and it really changing the mindset of the people when they got lose of their money. And if they couldn't manage and control themselves then have to expect bad decisions comes.
Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
Some people just underestimate the risk in trading because they are brag about focusing on the gains and out of knowing how much they lose in every single mistake they do. Not really they appreciate how was important to have an Effective Risk Management until they realize it. And that was bad since they have to commit mistakes first before they look into its importance.
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Is a "win rate" really such a thing in crypto trading? From what I know a win rate is something being used by those odd pickers in gambling but not in trading because there is no such thing as a win rate for a trader since the market is to volatile to guarantee such trader being accurate in the market. Risk management is also barely used in the trading lingo but I believ what you are trying to say when risk management is involved is the cutting of losses of a trader to the bare minimum. In your example where the trader have lost 15% of his capital this can be something mitigated or avoided if the trader react way earlier or has a back up plan/ exit strategy when the target price failed to hold, maybe losing only up to 5% is what you will be looking for if you are trying to manage your risk.
losses are inevitable but this can be reduced if you do know on how to set things up.People do normally forget this thing until they've bust out.
That is why we have stop loss and other stuff in trading, so you do not lose too much at all. Plus you are right that when it goes down 50% it required to go up 100% to be back and that is one of the reasons why it is so hard to make money in trading, however you can stop looking at the % it increases or decreases and focus on the price itself, which usually does matter a lot as well.
For example price of one altcoin could be 100 dollars, if it drops to 90 dollars, you can simply expect it to go up to 100 dollars instead of trying to wait for it to go up a bit over 10%, if you wait in % you are going to be disappointed a lot more frequently, just focus on the price and you would be basically expecting it to be what it once was which shows you what it could be.
For example price of one altcoin could be 100 dollars, if it drops to 90 dollars, you can simply expect it to go up to 100 dollars instead of trying to wait for it to go up a bit over 10%, if you wait in % you are going to be disappointed a lot more frequently, just focus on the price and you would be basically expecting it to be what it once was which shows you what it could be.
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
Is a "win rate" really such a thing in crypto trading? From what I know a win rate is something being used by those odd pickers in gambling but not in trading because there is no such thing as a win rate for a trader since the market is to volatile to guarantee such trader being accurate in the market. Risk management is also barely used in the trading lingo but I believ what you are trying to say when risk management is involved is the cutting of losses of a trader to the bare minimum. In your example where the trader have lost 15% of his capital this can be something mitigated or avoided if the trader react way earlier or has a back up plan/ exit strategy when the target price failed to hold, maybe losing only up to 5% is what you will be looking for if you are trying to manage your risk.
Risk management is what we should focus especially if we want to be consistently earning in the market. Risk management consists of different areas that we should master: first is planning, second is identifying the risk and reward ratio, third is position sizing which is the very important in order to manage the risks very well. Traders are usually focusing on the money that they may earn and not the money that they may lose and that is why when they all in their money in just one trade, they suffer huge losses that takes time in order for them to recover it.
Good question, the recent volatility spikes during the Corona pandemic have also demonstrated that it's much more likely to incur margin calls and lose your account during high volatility situations.
Therefore, purely from a fiduciary and perspective perspective as well, it makes great sense to always have a slightly long volatility (long gamma / long vega) bias in any portfolio.
Therefore, purely from a fiduciary and perspective perspective as well, it makes great sense to always have a slightly long volatility (long gamma / long vega) bias in any portfolio.
Risk management is one of the problems in the world of trading because not all the time is you can make a lot of earnings and profit to your trades. The first place, trading is having a higher chance of risk if you are just common people who do not have enough capability and knowledge about the movement of the coin and trading you with your money cannot survive into the trading still always make sure you have enough learnings before deep diving your risk. Some of the people making double wages when they lose on their games which is not advisable it is riskier too because not all the time double wages are effective. Still, it is your decision If you will gonna do this just to earn back your loss.
Capital management is what is simply called risk management, this is for newbie to understand.
If we are not taking emotion away, we are going to make wrong decision about our capital. Always focusing on profit is a step in wrong direction.
If we are not taking emotion away, we are going to make wrong decision about our capital. Always focusing on profit is a step in wrong direction.
I think only some of the traders who will think about risk management. But I believe every trader will have their reason to prevent the risk become bigger, and perhaps, they will use so many methods to recover they're lost if somehow they are lost in trading. But many traders trade using big money, and they tend to go all-in of their cash in one price. We can see that when they use all-in of the capital, they will have a big chance to get a trap in the market, and that can make them wait for a long time to sell that coin.
Risk management is how we can manage the money that we will use in trading, and how we deal with the risk, so our loss will not be bigger. I admitted that it is difficult, but if we don't try, we will never learn how to prevent the risk.
Risk management is how we can manage the money that we will use in trading, and how we deal with the risk, so our loss will not be bigger. I admitted that it is difficult, but if we don't try, we will never learn how to prevent the risk.
Risk management is in the end just being prepared tbh. Even if you take the risk of going all in, it can still be called risk management as long as you actually had a plan and a reason for doing that instead of just going yolo. If you were the standard trader ofc you'd create a risk management plan for yourself. But some traders could go on without one since their plans itself are somehow preventing the worst that could happen, that is based on their plans. Risk management in the end just limits your losses while profiting slowly and is quite nice, but on the other hand, taking risks is also one option as long as you have a plan to cut your losses when it exceeds a certain margin.
But it is easier said that done. I don't think that traders here are going to be strict, maybe there are days that they will just give up and consider it a lost already. I think what we traders should practice is some kind of "control aggressiveness". Yes, you could do some risk management, but in the end, you might go on the opposite side. What I mean is that don't predict your every movement. I know this idea sounds crazy, but it had work for me. I'm not against risk management control, but for me it's better to get out of your comfort zone from time to time.
You are right! Saying up things about risk-reward matters is easy but actually the hardest thing when you are already on the actual situation.Most of noob investors would really have this kind of common mistake on where they dont plan it well when it comes on how much they would
need to risk for them to earn but rather they do go all in once they do wanted to do without even minding that they can blow up their
capital in a short span of time with such behavior.Well, mistakes would be the best teacher and if you do realize it up then thats the
time you would consider risk-reward ration when you do already have that idea in mind.
But it is easier said that done. I don't think that traders here are going to be strict, maybe there are days that they will just give up and consider it a lost already. I think what we traders should practice is some kind of "control aggressiveness". Yes, you could do some risk management, but in the end, you might go on the opposite side. What I mean is that don't predict your every movement. I know this idea sounds crazy, but it had work for me. I'm not against risk management control, but for me it's better to get out of your comfort zone from time to time.
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
It makes lots of sense. Most traders never bother about how much they could risk on their every trade as they are usually focus on how much profits they may make. Simply if you are able to make more profits than your losses then you can escape!Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
In other words, cut your losses earlier. Or choose the trade which has (comparatively) low stop-loss levels and strictly follow the habit of exiting the trades at stop-loss.
Risk management is all about: Your rough estimation about your profits and loses before entering into actual trades.
You may have low winning rates but if you keep your losses at low then your winning trades may compensate your losses in other trades. It is possible only when you follow risk management. I guess only traders who bother about preventing losses may able to follow these kinds of management principles more consciously. But I am a trader who forgets all my own discipline rules and may think about my own set of rules only when my trade turns negative. This happened to me at least 25 times still I am unable to control myself when I get a signal for a new trade.
Let's dive in n take a look Why risk management is so important ?
If you enter a $100 trade and lose 15%, you’re down to $85.
If you make 15% profit on your next trade, now you have $97.75
It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.
Also win % does not make a successful trader, but strategy and risk management do.
For example:
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
If you enter a $100 trade and lose 15%, you’re down to $85.
If you make 15% profit on your next trade, now you have $97.75
It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.
Also win % does not make a successful trader, but strategy and risk management do.
For example:
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
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