What is risk management and how does it help the trader.

Risk management is the ability to limit your losses when trading cryptocurrency.

How to manage risks

Manage risks to trade cryptocurrency effectively and earn. Here’s how to do it:

1. - Set maximum risks for different time periods. You should separately set the maximum risk you can take on a single trade, day, week, month, as well as for the entire deposit over the total period in the market.

2. - Diversify your investment portfolio. Choose promising cryptocurrencies and fill your portfolio with various assets so that in case of failure with one of them, you can compensate with profits from trades with other coins.

3. - Start small. In the first months of trading, while you are getting familiar with the field and gaining experience, choose the safest trades. Let the profits from them be low, but the risk of losing capital is also lower. Once you are comfortable in the crypto market, you can choose riskier trades, but it is always worth carefully calculating the risks and stopping in time.

4 - Use stop-loss. This is an automatic closure of a trade when the asset’s value starts to fall sharply.