📈 Why risk management is the key to survival in trading
Many beginners in crypto trading focus solely on profits, forgetting about risk management. In practice, this leads to serious losses, especially in volatile markets. Risk management is not only about setting a stop loss. This is a whole system: from calculating the volume of the position to controlling emotions and discipline.
(This is not financial advice. Do your own research (DYOR))
📌 Example: how risk management works in practice
Let's imagine a trader with a deposit of 1000 USDT who decided to use a competent approach. He sets a rule for himself: risk no more than 2% of the deposit per transaction. This means that in case of failure, he is ready to lose no more than 20 USDT.
🔍 What it looks like in practice:
Deposit: 1000 USDT
Selected asset: BTC/USDT
The analysis shows a potential entry point
Stop Loss Level: -2% of entry
The position size is calculated so that when the stop is triggered, the loss is exactly 20 USDT
📊 If the trade is closed in the plus, the trader takes profit. If it is negative, the loss is limited and does not critically affect the entire deposit. This approach allows you to withstand even a series of failures without losing control over emotions and balance.
📣 Inference
Risk management is not a guarantee of profit, but a guarantee of survival in the market. Even the most accurate trading strategy will not save you if you open every trade "all or nothing". Reasonable loss limitation is the key to long-term stability in trading.
💬 And how do you approach risk management? Share your strategies in the 👇 comments
This is not financial advice. Do your own research (DYOR).