Why we need to prioritize risk management, as a trader! - page 3.

jaberwock

legendary

Activity: 2772

Merit: 1127

Quote from: mirakal on August 09, 2024, 06:33:42 PM

We need to prioritize risk management when trading simply because we should limit or control our potential losses and maximize our profit potentials,

I think both you said there are the same. At first thought, it is seems that it is necessary for risk-taking but there are just people who can neglect it or they can get carried away and didn't realize that they already got over board. They will only know it once the rush subsides down and they can only regret it. I'm not sure but I think there are still things that can come early or first before risk management, like for example learning on how to trade and once we know them, risk management can also come naturally. Isn't this sounds like a shortcut? Hehe but for us to be sure, we can still take a look at its dedicated topic.

Quote from: mirakal on August 09, 2024, 06:33:42 PM

and that will only be possible if we are completely aware on how to manage those risks in trading through trading knowledge and experience that we will acquire in our trading journey. Otherwise, if we can't deal with our risks properly, it's better not to start trading at all to avoid future losses.

According to what I wrote above, it shows that risk management is a bit tricky to do and if you don't know how to do it yet, you won't also be aware if you are still within your limits or not anymore. As they say, experience can still teach us about this. So it can be considered to be okay if we are not really doing well on our early tries. If we start trading without any knowledge, losses can actually come in an instant (not in the future). Now, if we already gained enough experience through our long-time stay in the trading field/arena, losses can now actually be minimized.

$weetne$$

sr. member

Activity: 322

Merit: 227

Playbet.io - Crypto Casino and Sportsbook

Quote from: Yamane_Keto on August 09, 2024, 06:20:08 AM

Learning to trade requires more practical experience than theoretical research. You can learn the basics by reading about trading and then taking some practical steps and starting to trade will teach you a lot. It is good to learn from your losses as the best traders may lose millions but they learn from their mistakes and benefit from them in increasing their investment portfolio.

Just learning theoretically without practicing is not going to teach you anything. Knowledge that is not being put to use is not a valuable knowledge therefore as traders, we have to practice the things that we have learnt very frequently. Risk management is going to help you to last longer in the market. With the right risk management, you are not going to lose money that you would not be capable of afford just as many traders are losing because you already put in an amount that if your analysis are to be wrong, the market is going to kick you out and it would not allow you to lose that much. Risk management also helps you to become a careful trader and would always be making profit and not like other traders that are trading at a lost but they are thinking they are making profits.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Quote from: Awaklara on August 11, 2024, 11:28:59 AM

Quote from: Findingnemo on August 11, 2024, 11:08:29 AM

Talking about risk, more longer the trade window the less likely you will lose means day traders are the highest risk takers and everything goes in their way then they can make tons of money depends on their capital while in reality it doesn't always goes in their way and the trading fee might even start eating their capital.

So anyone who wants to have less risk then they should move to longer form of trading like once in a few months would be more profitable than doing multiple trades in a day.

Today's traders tend to prefer short-term trading. Analysis and planning are done for a short period of time. The risk management they apply must certainly cover a short trading period. I think long-term trading like that is not a matter of patience, but more new traders are currently more interested in the short-term profits that can be obtained. With that, they accept high risks.
Trader characters will always be different in determining their trades. Some traders are suitable and like short-term trading, but there are also those who prefer trading for a longer period of time. I am not sure about the risk management they consider. I think it is more about the consideration of the pleasure and habits of the trader himself.

It's always like that in every market not just in crypto trading, and that's the reason only a few become successful while most goes bankrupt or just pull out after few hits.

We can't blame the people too because obviously who wants to make quick money see crypto currency trading as a way of doing it and with the influence of wrong people they just half cooked, didn't know the entire details so they realise everything we say in theories is not possible in reality.

Awaklara

hero member

Activity: 1246

Merit: 699

Quote from: Findingnemo on August 11, 2024, 11:08:29 AM

Talking about risk, more longer the trade window the less likely you will lose means day traders are the highest risk takers and everything goes in their way then they can make tons of money depends on their capital while in reality it doesn't always goes in their way and the trading fee might even start eating their capital.

So anyone who wants to have less risk then they should move to longer form of trading like once in a few months would be more profitable than doing multiple trades in a day.

Today's traders tend to prefer short-term trading. Analysis and planning are done for a short period of time. The risk management they apply must certainly cover a short trading period. I think long-term trading like that is not a matter of patience, but more new traders are currently more interested in the short-term profits that can be obtained. With that, they accept high risks.
Trader characters will always be different in determining their trades. Some traders are suitable and like short-term trading, but there are also those who prefer trading for a longer period of time. I am not sure about the risk management they consider. I think it is more about the consideration of the pleasure and habits of the trader himself.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Talking about risk, more longer the trade window the less likely you will lose means day traders are the highest risk takers and everything goes in their way then they can make tons of money depends on their capital while in reality it doesn't always goes in their way and the trading fee might even start eating their capital.

So anyone who wants to have less risk then they should move to longer form of trading like once in a few months would be more profitable than doing multiple trades in a day.

Yamane_Keto

hero member

Activity: 630

Merit: 510

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

As a trader , our ultimate goal is making profits. No trader loves to losse.

No trader likes to lose, but losing is part of the journey to success. Loss cannot be avoided, but you must learn how to deal with losses and turn them into profits. Risk management policy is different from loss management. In that policy, you will determine the level of risk and thus the level of acceptable losses, while loss management is about what you will do if the losses are greater than you can bear.

famososMuertos

legendary

Activity: 1960

Merit: 3107

LE ☮︎ Halving es la purga

It is not possible to be generic in the aspect of losses in risk management, mentioning avoiding losses or losing money as negative effects in absolute values is selling smoke in the speech of any trader.

In reality, the application of risk management is measured by so many variables that even decision making can be related to a profit curve.

OcTradism

hero member

Activity: 1722

Merit: 801

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

As a trader , our ultimate goal is making profits. No trader loves to losse.

Prioritizing risk management is one of the safer way to earn on trade.

You want to get profit which is explainable but before getting profit, what do you need?

You must protect your initial capital safely first. Because if you can not defend your initial capital, you will see it becomes smaller and smaller with time then till a point it becomes nearly zero. At this point, you will have nearly nothing to do and getting profit is impossible.

If you can defend your initial capital, you will have many chances to get profit. Don't worry that you miss this opportunity, miss that chance because opportunities come and go, you only need to protect your capital and wait for one chance to catch it, and get profit successfully. It's enough and don't feel bad if you miss one, two or some opportunities.

mirakal

legendary

Activity: 3108

Merit: 1290

Leading Crypto Sports Betting & Casino Platform

We need to prioritize risk management when trading simply because we should limit or control our potential losses and maximize our profit potentials, and that will only be possible if we are completely aware on how to manage those risks in trading through trading knowledge and experience that we will acquire in our trading journey. Otherwise, if we can't deal with our risks properly, it's better not to start trading at all to avoid future losses.

EL MOHA

sr. member

Activity: 630

Merit: 298

Quote from: Davidvictorson on August 09, 2024, 02:38:48 PM

As a trader without proper risk management in place there will be no profit made. I am always ready to risk with 0.1 to 2% of my capital for a small consistent and stable outcome. As a rule, I have been taught to only trade at 1:2 risk to reward ratio. There are others ratios out there but I stick to this. My focus is to remain profitable no matter how low the success rate. My experience and experimentations have enabled me to understand and know what works best for me. So you have to find yours as it may not work for you too.

I usually say this about trading, before you even learn how to take trades, know how to do technical analysis or fundamental analysis I personally believe risk management knowledge comes first. Bitcoin trading is risky and everybody is going on about that put at least with a proper risk management you can control this risk or worse it goes you can minimize the risk. The biggest misconception some traders have is that if they use so and so amount they are controlling risk but it far goes beyond that, you need to learn how to calculate things like position size and also how will be lost at your stop loss point.

Many at times you when one or two trade goes against a trader you hear stories like they got liquidated which isn’t supposed to, you can hit stop loss close to 10 times and still not get liquidated because the position size of the trade is well calculated that even a very high leverage wouldn’t liquidate anything.

About what kind of trades to take I Also like the 1:2 proportion trades but I prefer trades with 1:3 R/R upward than any other trades because the reward should be multiplying the risk

stomachgrowls

hero member

Activity: 3010

Merit: 794

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

As a trader , our ultimate goal is making profits. No trader loves to losse.
There are common factors which makes a trader loose while trading, factors like ,
* Lack of education and training
*Insufficient market research and analysis
*Emotional decision making
*Greed, fear etc
*Poor risk management.
And the list goes on...
There are need to counter all of this factors that could make us loose money in trading.
And on of the ways to ensure this is in prioritizing risk management, set a clear financial goal, implement risk mitigation strategies, identify critical risks etc.
Continuously monitor and adjust.etc
There are so many ways to go about this..
Prioritizing risk management is one of the safer way to earn on trade.

Yes, there are indeed the basics but making yourself do tend to follow up on what you are really that trying out to isnt something that wont really be so simple.
Lets say that you would really be putting up that risks management or considering such step but on the time that you do face up some certain conditions then you do really
that become having that kind of hardship on which you would really be having that different way of approaching or reaction on things. Its good that you do able to make yourself that
wary about those basic principles on how you should really be handling up yourself towards into this market but doesnt mean that you wouldnt really be that trying out to do necessary steps.

Davidvictorson

hero member

Activity: 1190

Merit: 901

Livecasino.io

As a trader without proper risk management in place there will be no profit made. I am always ready to risk with 0.1 to 2% of my capital for a small consistent and stable outcome. As a rule, I have been taught to only trade at 1:2 risk to reward ratio. There are others ratios out there but I stick to this. My focus is to remain profitable no matter how low the success rate. My experience and experimentations have enabled me to understand and know what works best for me. So you have to find yours as it may not work for you too.

pusaka

hero member

Activity: 1064

Merit: 589

Quote from: Finestream on August 09, 2024, 11:48:04 AM

Quote from: Rruchi man on August 09, 2024, 11:29:45 AM

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

Prioritizing risk management is one of the safer way to earn on trade.

With proper risk management a trader is aware of the amount of money that they stand to lose if their trade does not go as the plan and with that analysis a trader may decide if that amount of money is too much to risk or if they are okay risking an amount of money. With the proper risk management strategy a trader can avoid trading in general and also the trader can avoid the surprise that may come from losing an amount of money that is unexpected.

Having risk management is controlling your funds from high potentials of losses, so one should only trade when the market is favorable to trade, and with an amount that a trader may afford to lose. Know that in trading, a trader should be aware if there is high returns of investment everytime he'll trade, or else he will only trade just to lose his capital, just like majority of the newbies who rush into trading to satisfy their greed.

This is a basic thing that we must learn, but usually when at the beginning beginners forget it, but after a while they will realize how important it is to have knowledge and apply risk management and money management in trading. I will not say they are late to realize this, because it is better to realize something late than not at all. I think almost everyone is also late to realize this, but over time we can gradually apply it when we trade. It is not something new for beginners to only think about profit which is actually greed, and sometimes someone who has been in this room for a long time still has a greedy nature. It's just different because people who are experienced will usually know how to control it.

dansus021

copper member

Activity: 2156

Merit: 983

Part of AOBT - English Translator to Indonesia

Why we need to prioritize risk management, as a trader! Totally agree with you because this is the key to make profit in trading world in my opinion if you can control emotion and that include fear and greed and then you can control the next lever of trading money management.

If you can control both money management and emotion I belive this can lead into a never ending profit

Finestream

hero member

Activity: 3052

Merit: 606

Quote from: Rruchi man on August 09, 2024, 11:29:45 AM

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

Prioritizing risk management is one of the safer way to earn on trade.

With proper risk management a trader is aware of the amount of money that they stand to lose if their trade does not go as the plan and with that analysis a trader may decide if that amount of money is too much to risk or if they are okay risking an amount of money. With the proper risk management strategy a trader can avoid trading in general and also the trader can avoid the surprise that may come from losing an amount of money that is unexpected.

Having risk management is controlling your funds from high potentials of losses, so one should only trade when the market is favorable to trade, and with an amount that a trader may afford to lose. Know that in trading, a trader should be aware if there is high returns of investment everytime he'll trade, or else he will only trade just to lose his capital, just like majority of the newbies who rush into trading to satisfy their greed.

Rruchi man

legendary

Activity: 1498

Merit: 1116

Top-tier crypto casino and sportsbook

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

Prioritizing risk management is one of the safer way to earn on trade.

With proper risk management a trader is aware of the amount of money that they stand to lose if their trade does not go as the plan and with that analysis a trader may decide if that amount of money is too much to risk or if they are okay risking an amount of money. With the proper risk management strategy a trader can avoid trading in general and also the trader can avoid the surprise that may come from losing an amount of money that is unexpected.

Yamane_Keto

hero member

Activity: 630

Merit: 510

Learning to trade requires more practical experience than theoretical research. You can learn the basics by reading about trading and then taking some practical steps and starting to trade will teach you a lot. It is good to learn from your losses as the best traders may lose millions but they learn from their mistakes and benefit from them in increasing their investment portfolio.

Barikui1

sr. member

Activity: 266

Merit: 205

Quote from: Gooner0 on August 09, 2024, 12:32:45 AM

As a trader , our ultimate goal is making profits. No trader loves to losse.
There are common factors which makes a trader loose while trading, factors like ,
* Lack of education and training
*Insufficient market research and analysis
*Emotional decision making
*Greed, fear etc
*Poor risk management.
And the list goes on...
There are need to counter all of this factors that could make us loose money in trading.
And on of the ways to ensure this is in prioritizing risk management, set a clear financial goal, implement risk mitigation strategies, identify critical risks etc.
Continuously monitor and adjust.etc
There are so many ways to go about this..
Prioritizing risk management is one of the safer way to earn on trade.

Well, it's already been proven that knowledge on technical and fundamental analysis makes you money in trading, but lack of proper risk management strategy makes you lose all your gains, so as long as trading is concerned, managing your risk properly is very much important if you really want to stay in the business and be profitable.

And one thing that makes risk management very much important is that, you might use a week to make up to $10000, but you can lose them all in just an hour, if you don't manage your risk properly, by putting stop loss, using low leverage if you must and trading only when their is opportunities in the market, not diving into the market and trade anything you see because you think that the more trades you take, the more money you make, no, trading doesn't works like that, so in essence of what am trying to say is that risk management protects your money, because that it's primary purpose, while knowledge, patience, and emotional control makes money for you in trading.

DarkState

member

Activity: 138

Merit: 10

I totally agree with you about risk management Trading without a solid risk management strategy is prone to losses. No matter how professional or experienced the trader is, without proper risk management they can face losses By identifying and evaluating critical risks, you can develop plans to manage them effectively

Gooner0

jr. member

Activity: 66

Merit: 4

As a trader , our ultimate goal is making profits. No trader loves to losse.
There are common factors which makes a trader loose while trading, factors like ,
* Lack of education and training
*Insufficient market research and analysis
*Emotional decision making
*Greed, fear etc
*Poor risk management.
And the list goes on...
There are need to counter all of this factors that could make us loose money in trading.
And on of the ways to ensure this is in prioritizing risk management, set a clear financial goal, implement risk mitigation strategies, identify critical risks etc.
Continuously monitor and adjust.etc
There are so many ways to go about this..
Prioritizing risk management is one of the safer way to earn on trade.

Topic: Why we need to prioritize risk management, as a trader! - page 3. (Read 668 times)