Working out Risk on a Trade | Bitcointalksearch.org

gunhell16

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Quote from: JailHouse on December 23, 2023, 12:31:48 PM

If I have 2139 USDT in my trading account, and I wish to risk a max of 1% on every trade, how would you see that?

Would you take that to mean that I place a stop loss equivalent to $21.39 away from my entry?

or would you use some other calculation for stop loss placement?

Or do you understand something different when I say I want to risk 1% of my account on the trade?

If you look at my image, the Right side shows Binance. I have slid the slider to 1% and it shows that I can trade with 34 XRP.
While the left side shows Tradingview. I have entered 1% risk in there and it gives me 21378 XRP to trade with.

Something is confusing here.

Appreciate any clarity.

JH

If that's the kind of profit you get every day, it's not that bad, actually. The 1% daily on the amount you have is actually not bad. That's fine, actually, as long as you don't set up all your money.

You know, in that kind of setup, if the woman-up is wrong, you lose immediately. Then the market is also very unpredictable, so that's a good entry for the view I see, to be honest. And it's good to do that on the spot, not with other types of trading here in cryptocurrency.

Zigabel

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Quote from: JailHouse on December 23, 2023, 12:31:48 PM

If I have 2139 USDT in my trading account, and I wish to risk a max of 1% on every trade, how would you see that?

Would you take that to mean that I place a stop loss equivalent to $21.39 away from my entry?

or would you use some other calculation for stop loss placement?

Or do you understand something different when I say I want to risk 1% of my account on the trade?

Your risk management strategy is really a conservative one and it's going good if you don't intend trading aggressively on that account, using this your risk management strategy apply a risk to reward ratio of 1:3 on five trades and you will stay profitable even if you loose two trades, maintain your stop loss and do not adjust your stop loss to get any bigger instead of the trade is going in your favor, adjust stop loss to break even and that way you are most definitely staying profitable if a reversals or retracement happen. But if you want to risk just 1% entirely then I will say that's too conservative and wouldn't be profitable enough.

1% per trade will means risking 5% on five trades but 1% entirely means you will have to place a single tread and if you want a multiple trade you will have to divide it across all trades.

Julien_Olynpic

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If your goal is to improve your entry point and set a shorter stop loss that is less likely to be hit, then I would recommend that you enter the trade in chunks. For example, first enter 30% of the total amount you are depositing for the trade. Then, if this part grows, then you simply take profit. If it falls, then you buy more at other quality levels. As a result, instead of exiting with a stop loss, you improve your entry point. And accordingly, you reduce the risk per transaction. Of course, it will be boring, but safe trading. And at the same time you will rarely run into stop losses.

MusaMohamed

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Quote from: JailHouse on December 23, 2023, 12:31:48 PM

If I have 2139 USDT in my trading account, and I wish to risk a max of 1% on every trade, how would you see that?

Would you take that to mean that I place a stop loss equivalent to $21.39 away from my entry?

or would you use some other calculation for stop loss placement?

Don't use all your capital for trading.
Don't use all your trading capital for one trade.

You can use Fibonacci Retracement to look for potential entries and exits.
You can also use Support and Resistance to find entries and exits as well as cut loss price.

[GUIDE] Support and Resistance
[GUIDE] Fibonacci Retracement

death69

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Risking 1% is key to trading discipline. It goes beyond placing a stop loss at $21.39 from your entry point. The perspective is basic! I think it's about knowing the asset's volatility. XRP price variations must be considered. This means your stop loss should represent XRP's usual price swings, not just your account balance. Now, onto the disparity in XRP quantities. Remember that Binance and TradingView employ different methods. The lower XRP number may be due to Binance's slider considering leverage and buying power. TradingView's calculation seems to ignore leverage and use your total account amount. This distinction matters! In addition to numbers, you must grasp the math.

A final strategy tip: match your stop loss to your risk tolerance and asset behaviour. Think beyond the 1% rule. Add the asset's historical volatility to your risk management plan. Thus, you intelligently adapt regulations to market realities rather than mechanically implementing them. Not just safe, but smart.

terrific

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Quote from: JailHouse on December 23, 2023, 07:16:21 PM

I'm on the spot market and not using Leverage.

I'm trying to figure out what is the best way to trade with around $2000 and yet still make a decent amount on every trade, instead of just pennies if I risk 1%. I'm currently looking at small moves on the 1m chart while scalping.

Is there a better way to do this?

What are my options?

JH

Just as you've said, you are on the spot market and you don't do leverage. To have better way if you're for the profit, you can use leverage.
But I don't advise that if you're so new to it and that can potentially burn your money if you don't know how to move properly with your trades there.

Bushdark

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Risking just 1% of your total capital should not be a problem especially if you are a very good trader. There are also traders that could go as far as risk 3% of there total capital which is mostly dependent on the amount of capital they have in their account.

You try to learn as fast as possible since I can see that you want to start trading and making profits for yourself. Apart from the opinions you are going to get here, it is important that you go learn how to use stop lose since it will guard you against unnecessary loses rather than waiting for replies on how to use stop loses to help protect your account.

traderethereum

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Trading USDT altcoin pairs is not as easy as you might imagine. But you can try trading USDT bitcoin pairs. When the price of bitcoin falls, you can buy and hold it for a while.
Don't rush to sell it but wait for the bitcoin price increase.
You may trade daily or every few days, where Bitcoin's rise and fall will likely occur frequently this month and in the months to come. So your profits could be greater than if you scalped.
But I suggest you to only use the money you can afford and don't use the $2000 all at once but divide it into several parts in buying and selling bitcoins.

bettercrypto

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Because when I do trading activity, I don't think about the 1% of my capital traded on an exchange platform. As long as I see that there is a short-term profit, I will sell at the percentage I set.

Then, waiting again for the opportunity of pressure, I will see that it will drop to the value that I can see that it is possible that he will fall based on my analysis with the help of the tool indicators that I will use or use in the actual trade.

JailHouse

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I'm on the spot market and not using Leverage.

I'm trying to figure out what is the best way to trade with around $2000 and yet still make a decent amount on every trade, instead of just pennies if I risk 1%. I'm currently looking at small moves on the 1m chart while scalping.

Is there a better way to do this?

What are my options?

JH

GreatArkansas

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For OP, how about using risk: reward ratio for every trade you do?
Even your stop loss is optional (you will use liquidation as stop loss, not suggested) as long as you stick with your risk: reward ratio then it will help you to calculate your losses and profits.
Risk reward ratio for example is: A 1:2 ratio implies that if you risk $1, you aim to make $2 in profit.

For me, I usually do a minimum of 1:1.5 and then a maximum around above 1:2.5.

It is really different your risk tolerance, like, how much you are willing to lose for every trade.

terrific

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With that amount and risk ratio that I'll be doing, I'm good with that amount whatever happens. I'll put that on trade since I can afford that to lose.
I won't be putting any stop loss on it and let it where it goes but of course this isn't going to be placed on some random trading pairs but I'd do it with what I am familiar with.
If you're okay to take huge risk on it, some might just put that on futures since it's just 1% of your entire balance.

jeraldskie11

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Quote from: JailHouse on December 23, 2023, 02:11:46 PM

Quote from: cryptoaddictchie on December 23, 2023, 01:31:39 PM

Quote from: JailHouse on December 23, 2023, 01:14:55 PM

So how would you classify risk on a trade?

Risk is if you are trading more than you can afford to lose. Its good that you have a strategy for your balance but ask yourself if you can go beyond that or cant lose a 20 bucks on a trade. Dont expect so much earning when you can leverage a 1% of your total assets. If you are trading with future then you must have confidence and ideal balance to support all your trades and avoid such terrible liquidity notification.

Look at the image and see if I am doing something wrong, coz I set 1% risk on the trade in both places but one gives me 34 XRP to trade with and the other gives me thousands when I enter 1% in the risk box.

How comes?

JH

I've seen the image, and it's just fine. A risk of 1% every trade is acceptable and is widely used by many traders. Tradingview can also be used to calculate your risk.

My single piece of advice for ensuring the safety of your funds when trading futures is to check whether you are in isolated mode or cross-margin mode. I always use the Isolated margin option so that if you forget to apply a stop-loss and the price drops quickly, it will only liquidate your margin and not your port.

JailHouse

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Quote from: cryptoaddictchie on December 23, 2023, 01:31:39 PM

Quote from: JailHouse on December 23, 2023, 01:14:55 PM

So how would you classify risk on a trade?

Risk is if you are trading more than you can afford to lose. Its good that you have a strategy for your balance but ask yourself if you can go beyond that or cant lose a 20 bucks on a trade. Dont expect so much earning when you can leverage a 1% of your total assets. If you are trading with future then you must have confidence and ideal balance to support all your trades and avoid such terrible liquidity notification.

Look at the image and see if I am doing something wrong, coz I set 1% risk on the trade in both places but one gives me 34 XRP to trade with and the other gives me thousands when I enter 1% in the risk box.

How comes?

JH

cryptoaddictchie

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Quote from: JailHouse on December 23, 2023, 01:14:55 PM

So how would you classify risk on a trade?

Risk is if you are trading more than you can afford to lose. Its good that you have a strategy for your balance but ask yourself if you can go beyond that or cant lose a 20 bucks on a trade. Dont expect so much earning when you can leverage a 1% of your total assets. If you are trading with future then you must have confidence and ideal balance to support all your trades and avoid such terrible liquidity notification.

JailHouse

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So how would you classify risk on a trade?

mk4

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The amount you're risking per trade doesn't necessarily need to relate to your stop-loss placements. Stop-loss placements will far depend on the trade you're taking(price targets, invalidation spots, etc), than the risked amount.

e.g. I have trades where my stop-losses are really really far below, whereas I also have trades where my stop-losses are really really tight/close.

JailHouse

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If I have 2139 USDT in my trading account, and I wish to risk a max of 1% on every trade, how would you see that?

Would you take that to mean that I place a stop loss equivalent to $21.39 away from my entry?

or would you use some other calculation for stop loss placement?

Or do you understand something different when I say I want to risk 1% of my account on the trade?

If you look at my image, the Right side shows Binance. I have slid the slider to 1% and it shows that I can trade with 34 XRP.
While the left side shows Tradingview. I have entered 1% risk in there and it gives me 21378 XRP to trade with.

Something is confusing here.

Appreciate any clarity.

JH

Topic: Working out Risk on a Trade (Read 172 times)