The main rule in risk management for investors is to invest only free funds. In addition to this rule, there are a few useful tips. Stick to them in trading and you won’t lose the deposit after 3-4 transactions.
Leave a 30% deposit to reserve
You should lay no more than 70% of the deposit on a series of transactions. Leave the rest of the funds for unforeseen cases. Remember that it’s impossible to reach 100% profitable trades. The stock market can go in any direction.
Keep the ratio of profit and loss 3:1
The cryptocurrency market is very dynamic. Don’t risk your deposit in a smaller ratio. For example, if the price of Bitcoin is $7,000, put a limit on losses at $6,800, and fix the profit at $7,600. In case the market goes down, you will lost only $200.
4% of the deposit per trade
Don’t put more than 4% deposit on one trade. Even if you have a clear market forecast. A small part of the deposit for the transaction will protect you against an unforeseen situation, but it won’t prevent from following your strategy.
Limit losses to 5% of the deposit
Buying Bitcoin at $7 000 with deposit about $10 000, put a limit at $6 500. We are talking about only the main part of the deposit.
Risk management is simple. Use this four principles, regardless of the market situation.
Great contents, Well written
This project clearly got my attention after reading, and this will sell to the top. Blessed!!Thank you for the article. I ended up following you !! I will search for your contents everyday, you can follow me too. lets grow together my new post