⛔️ Avoid Being Trapped In Any Trade ⛔️

Managing money in crypto trading is crucial to avoid losses. Many people join crypto with dreams of getting rich overnight, but the reality is that more people lose money than make it. Drawdowns are inevitable, and the more you lose, the harder it is to recover. This article discusses how to avoid trading losses through various risk management strategies.

Diversification: Never put all your eggs in one basket. Diversify your investments across different coins and categories to avoid overexposure to any single asset. For example, don’t invest solely in AI or meme coins; spread your capital across AI, ecosystem, meme, RWA, gaming, etc. This reduces the risk of losing everything if one category crashes.

Stop-Losses/Invalidation: Use stop-losses to protect your investments. Price-based invalidation involves setting a stop-loss just below a support level. Time-based invalidation means cutting your trade if the price closes below your support level. Volatility-based invalidation involves closing your trade if the price doesn’t move as expected during specific sessions. Choose the strategy that works best for you.

Risk & Reward Management: Assess how much you’re risking to make a certain amount of money. For example, if you buy at $100 with a stop-loss at $75 and a target of $150, you’re risking $25 to make $50, a 2R trade. Adjust your stop-loss and take profit levels based on market conditions to maximize gains and minimize losses.

Conducting Research: Always research before investing. Understand the coin, its category, future plans, investors, supply, and community size. This helps you make informed decisions and avoid investing in risky or fraudulent projects.

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