Crypto trading can be highly lucrative. If you're good at it, it's a chance to work whenever you want, from anywhere you want.
Would you have done it?
For trading, most people are not cut out. It's physically exhausting and emotionally taxing.
Above all, good traders in cryptocurrencies are distinguished by one key thing from losing traders: risk strategy.
What is a strategy for risk?
Risk strategy is simply the art of, every time, considering the risk during each of your trades. The risk strategy is the approach to risk management when trading. It's a rule book that you obey each time you enter a trade, to the letter.
It can be very profitable to have a 50 percent failure rate for your transactions over time. All you have to do is maintain a solid risk plan and you're going to be able to cut short your losses and let your profits fly.
How a strong risk strategy can be built
To take losses
As a crypto trader, you have to be capable of taking a loss. If you're going to trade, you're going to lose. Get it in your head now. Often, all the traders lose money. That we know.
To cut them short, you take losses early on. Many traders fear taking the loss, which ends up cascading into huge losses and placing them in a much worse situation than if, as expected, they had taken the original smaller loss.
When you start a deal, if anything goes wrong, know where you can leave. This brings us to a stop.
Set stops
Stop loss is an incredible tool. To stop the loss from getting any bigger, you use them to close your trade. All you have to do is to determine where you want the trade to end and your trade will close if the price gets there.
You need to find out at what stage your trade would have gone wrong every single time before you enter a trade. That's where you would want to leave your place at that stage and take the loss.
All you have to do is measure the "wrong" location of your trade and put your stops there. You can keep losses to a minimum that way.
Bigger isn't better
Each successful risk strategy allows you to determine the size of your job. You will not be a dealer of the same place size and trade continuously.
Not every trade carries the same risk. You can have a smaller role if the trade is more expensive, because you don't have too much money at risk in case the trade goes wrong.
Ensuring that the size of your job is appropriate for the amount of risk you are taking.
Risk vs recompense
Not all prospects for trade are equal.
Technical analysis returns targets, giving you an idea of exactly where you think the price is going to go. Take the goal, combine it with the invalidation level and work out the ratio of risk vs reward.
There's no hard and fast rule, but without at least a 1:2 risk vs reward ratio, you shouldn't enter a deal. If you win 50% of the time, it's always going to net a nice profit.
Stick to your weapons
You have, for a reason, a trading risk strategy. Stick with that.
Unless you have measured the risk, don't enter trades and you are more likely to win than lose. Using Loss Stop. Make sure the size of your place is suited to the trade.
Do not chase it if you miss a trade. There will be plenty more coming around. Chasing transactions is a risky game.
