RISK MANAGEMENT
What are you doing wrong, lossing your capital trading?
It shouldn’t surprise you to know that people incur loss in the market, the only difference between you and them, is they determine their loss while in your case, the market is determining your loss.
Here are few tips in going about risk management. If you’re trading derivatives:
The first I'll advice is, get crypto education before you even think of trading Crypto.
Before every trade make sure you’ve properly done your analysis and observed the chats to confirm which trend the market is going.
Always set your stop loss as well as take profit with every open trade.
Don’t be greedy. Use the Binance calculator (it’s one of the most powerful tool you can have as a beginner trader) to determine your percentage take profit, stop loss, PnL, liquidation and all possible scenario before entering the trade as a beginner.
Use smaller leverage to avoid quick liquidation. I advise 10X and below for beginner traders.
After placing your order, trust your setup, the worst that can happen is your trade hitting stop loss.
Be patient. Don’t panic and close your trade before it hits your stop loss. One time, I closed a trade before it hit my stop loss, only for the trade to reverse and hit my take profit, I was really pained. I had held the trade for 4 days only to close at a loss before hitting stop loss and just when I closed, market reversed just as I was chickening out. Don’t be like me.
Never trade against market trend. You see a market is in an uptrend, and somehow your head is telling you to short the market without even seeing a break of current structure to the downtrend.
If you hit stop loss, take a deep breath and take a stroll out if you know you can’t control yourself from reentering the trade almost immediately. Your emotions plays a critical role in your trade, manage it well.
At the end of each day, reexamine each of your trade and check out reasons it played the way it did, document your lessons, and get better.
I hope this helps someone out.
