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Knowledge is powerful tool in any field of life, so here is some knowledge about managing crypto riskâŠâŠ
Manage your risk
If youâre trading any asset on a short-term basis, you need to manage your risk, and that can be especially true with volatile assets such as cryptocurrency. So as a newer trader, youâll need to understand how best to manage risk and develop a process that helps you mitigate losses. And that process can vary from individual to individual:
Risk management for a long-term investor might simply be never selling, regardless of the price. The long-term mentality allows the investor to stick with the position.
Risk management for a short-term trader, however, might be setting strict rules on when to sell, such as when an investment has fallen 10 percent. The trader then strictly follows the rule so that a relatively small decline doesnât become a crushing loss later.
Newer traders should consider setting aside a certain amount of trading money and then using only a portion of it, at least at first. If a position moves against them, theyâll still have money in reserve to trade with later. The ultimate point is that you canât trade if you donât have any money. So keeping some cash in reserve means youâll always have a bankroll to fund your trading.
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