How to implement the Risk Prize ratio in trade: Guide to security and management
The world of cryptocurrency trading is fast and constantly evolving. With the increase in new coins and tokens, effective risk management for traders. One of the key strategies used by experienced traders is the implementation of the risk prize indicator, also known as the “stop-loss” or “risk management” approach. In this article, we will examine how to implement a risk prize indicator and provide tips for security and risk management.
What is the ratio of the risk prize?
The risk prize factor, also known as the alloy degree, is a mathematical formula used to determine the amount of profit or loss that a trader can afford before withdrawal from trade. This is calculated by dividing the potential reward by the maximum amount that can be lost.
For example, if you trade a bitcoin pair with a 2: 1 risk indicator, it means that for every $ 100 in potential profit you should risk only USD 20 ($ 100 /2).
How to implement a risk prize ratio
To implement the Risk Award indicator in the trade strategy, follow the following steps:
- Are you looking for short -term profits or long -term profits? Are you trying to maximize your returns or minimize losses?
- Choose risk levels
: Decide with the maximum amount that you can risk trade. This is usually calculated using a pattern such as:
Risk = reward / (1 + percent of the degree of alloy)
Where the risk is the maximum amount that can be lost, and the percentage of the degree of alloy is a percentage of a potential prize that will be used to calculate the degrees of STOPs.
3.
- Monitor your transactions : keep monitoring your transactions to make sure you follow the planned strategy.
Types of risk indicators-exit
There are several types of risk reward indicators that traders use in cryptocurrency trading:
* 2: 1 indicator : This is the most common risk reward indicator, in which only USD 20 can be lost for each $ 100 in potential profit.
* 3: 1 or 4: 1 factor : These higher risk reward indicators are often used in the case of long -term transactions or when you try to maximize your returns.
* percentage of STOP (SL%) : This is a percentage of a potential prize that will be used to calculate the stops of the footer. Common SL% values include:
* 20-50%
* 30-60%
* 40-70%
Risk management tips
In addition to implementing the risk indicator, there are several other tips on risk management:
* position size
: Avoid taking too much risk for trade, setting the size of a position based on general risk tolerance and commercial goals.
* Lossa stops : Set clear detention levels that will be used to limit potential losses in each trade.
* Risk management tools : Consider the use of risk management tools, such as STOP-LOSS indicators, final stops or security strategies for risk management.
Application
The implementation of the risk indicator is an important step in risk management and maximizing returns in cryptocurrency trade. By following these steps and tips, you can create a solid foundation of your strategy and prepare for success. Remember to remain disciplined, carefully monitor your transactions and adjust the strategy if necessary to make sure you fully use your risk.
Reservation
This article serves only information purposes and should not be considered as investment advice. Cryptocurrency trading is associated with considerable risk, including the loss of the main amount, and may not be suitable for all investors.