Why risk management is so important for Every Trader. - page 11.

SquallLeonhart

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Quote from: BTC_Mouse on April 18, 2021, 05:18:56 AM

Also win % does not make a successful trader, but strategy and risk management do.

Strategies and money management are important but % calculation is also more important. In your example, if your doing your winning trades of multiple times then definitely you will get back to the original capital along with some profits.

I am saying these because we need to minimize the number of losing trades and maximize the number of winning trades. So, if you lose one time then you need to win at least 3 to 5 times. Because only winning more will get you consistent profits and if you are making profits and losing at same number of trades then there will be no point of staying in trading. Just quit.

michellee

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It is not easy to manage the risk on trading because no matter how much profit you made, you will still face that risk in the next trade. The only thing you can do is manage your money to trade, and if somehow you lose on trading, you need to be careful in the next trade and always analyze more to find the way to limit the risk. If you can not see the profit in the short term, maybe you can change your term into a long term because sometimes, you will make a profit in the long term.

The other suggestion will not use all-in of the money because that will make your risk bigger. You can split your funds into several parts and try to trade using that amount. If you lose, you can recover from a small amount and always pay attention to the market moves to not get in the trap by buying the coin at a high price.

Peanutswar

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Risk is part of the trading environment if you want to try trading it's better if you already made yourself ready for the possible outcome to win or to lose. In trading, this requires strong mental stability not every time a market collapse you are going to sell your assets that are not like that it's consists of analysis and experience to identify the outcome and makes a move towards your decision to put a buy and sell position. Losing in trading is normal but of course, you need to set a limitation to the number of losses and amount of money. The same thing in winning easy set a goal and not expect too much and becomes greedy. When making a trade always set a goal.

Theb

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Actually risk management is more easy to understand if you just explained it in a way about risk management being more into implementing stop/cut-losses and profit taking into every ones plan. Setting up cut-loss points and profit taking points or what others know about entry and exit points is how a normal trader earns money and also reduce/minimize the losses a trader will have if a trade goes wrong. A traders must also know how to be satisfied with their earnings and they need not to be looking back if ever they hold for it for a couple of days. A lot of traders experience this after taking profit yet the value of their crypto keeps going up they need to lose this kind of mindset as they already have a trading plan in action.

Mpamaegbu

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Besides, beyond all that the OP has stated in respect to risk control and money management is the issue of "Patience" and "Emotional control". I will go with the trader with a 1/5 risk to reward ratio even though the win rate is small. What that means is the trader will tend to be more selective of trades to execute and not just be in every trade. The problem with most traders is they want to be seen trading at all times even when there isn't any trade set up ready. That isn't how trading works. One has to choose one's trades and pick those with high winning rate.

Quote from: airdata on April 18, 2021, 09:01:39 AM

Cryotp Trading is not a Hassle free business, this is very risky business for new people, and nobody can make good amount from crypto currency without any Risk.

This is why there's always a caveat to every form of trading on the trading/exchange sites that one could lose one's capital. Again, crypto trading is highly volatile and shouldn't be indulged by anyone who doesn't have the set skills for it.

airdata

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Cryotp Trading is not a Hassle free business, this is very risky business for new people, and nobody can make good amount from crypto currency without any Risk. On the First time i invest a little amount on a Coin now i already make 10x from my investment.

BTC_Mouse

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Today Market Suddenly dump, so I explain why need risk management is so important for Every Trader.

📌 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.

Expect to lose short term. Plan to win long term.

📌 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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