Post
Topic
Board Trading Discussion
Re: How do you gain profit in crypto trading?
by
tbct_mt2
on 03/10/2024, 03:28:23 UTC
Stop loss can be good but I do not see it as a good risk management.
Quote
It is one of good risk management tools, not an only tool.

Quote
Although it is very good for people that are using high leverage which are those that wants to make money fast but most likely they may be losing.
Stop loss order is good for every trader, not only traders with Leverages.

Because if you use Spot trading, but don't use Stop loss, you can lose big money with black swan events like Terra death spiral, stable coins lose peg to zero. If a trader does not use Stop loss order, it's bad trader without intention to do risk management.

Quote
The best risk management starts from the amount of money that you are using to trade which should be very small and to be using very low leverage.
It is part of risk management in a big picture. Because trading is risky, if you only use small part of your whole capital for trading, you are reducing risk. If you lose all trading capital but because it is small part of your capital, you will not lose all money.

In psychology, it is helpful too because of above analysis, you will have less stress and pressure with your trading capital and trading position, then it reduces your greed, panic and can help you to make better decisions in trading.