Quote from: Sinjokubhi on April 19, 2021, 06:48:19 PM

Quote from: BTC_Mouse on April 18, 2021, 09:18:56 AM

Today Market Suddenly dump, so I explain why need risk management is so important for Every Trader.

📌 If you enter a $100 trade and lose 15%, you’re down to $85.

📌 If you make 15% profit on your next trade, now you have $97.75

📌 It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.

🎯 Also win % does not make a successful trader, but strategy and risk management do.

For example:

✖️ One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.

✔️ Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.

Expect to lose short term. Plan to win long term.

📌 So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.

Risk management is very important, but what is more important is whether you can do it or not. Basic also needs to be emphasized to beginners in trading. Because there are still many who start trading without knowing how the risks they will face later, because for beginners who are still early trading, they usually only think about the benefits that will be obtained, without realizing the risk is much higher than that, if we don't know how how to manage it well.

In fact, this will traumatize beginners from the losses they will find when they jump right into the real trade and make them mentally exhausted. Their view of crypto trading will be bad, because all they get is a loss, unlike what they imagine, being a trader is difficult to do, if all we want and think about is profit. That is the wrong mindset, if from trading we will get profit continuously. Everything must have its own risks, it is not easy to be able to earn for beginners who are just getting into trading. It is necessary, prior understanding of the knowledge to trade and then you can try it.

You learn about risk management after you understand how to trade. That will really help you in trading later. Because from here almost everything will be taken into account and in the future what you have to do, what actions you have to take must all be determined before something like an increase or decrease in prices occurs. Risk management is also useful for you to anticipate large losses. For example, by placing a stop loss after you predict and consider how far the price will decline. Therefore, do not assume that the decline in prices is a natural thing, it could be that after the decline there will be no more increases. So you need to think carefully about this.

True, i guess most people understand about it already, that in trading you need to understand the risk and need to know how to manage it, when you need to stop before you lose even more, or when you can continue and gain profit. However, it's not as easy as it seems, even if you're good theoretically, it doesn't mean you can implement it just like that. I think experience is really needed in trading, since experience will be the best teacher to teach the lesson. However still, it's truly important to know and implement risk management so you won't regret trading.