Introducing various risk management strategies in digital currency

Hello followers of the VIP digital currency site, we are here with an extremely interesting article about risk in the financial markets. Note that you cannot succeed in the financial markets without risk management. In this article, we are going to teach you various risk management strategies in digital currency. Note that we are looking for simple but practical risk management. How we do it is also very important to us. Tips used in this article are applicable for amateurs and professionals.

In the financial markets, when people are looking for big profits, only one thing can help them and that is risk management. Before we examine and teach various risk management strategies in digital currency. We must tell you that we have prepared for you the average price of all digital currencies in Iranian exchanges on the VIP digital currency site. You can use the live price section of digital currency for everything. This will help you to buy and sell quality.

What is risk management?

In general, if we want to define risk management for you. Risk management means always looking at the darkest and scariest side of anything. For example, if you are currently buying $50,000 worth of Bitcoin, that means you should also be looking at $10,000 worth of Bitcoin.

Now, for a better understanding of the category of risk in financial markets, you can refer to the analysis and investment section. In that section, use the article “What is risk management in digital currency” completely and comprehensively. In this article, we intend to talk to you completely about the types of risk management strategies.

Introduction and review of some applied risk management strategies in digital currency

Note that risk management is usually defined based on two parameters. The first parameter that risk management depends on is your personality and ethics. You should always use a risk management strategy according to your risk-taking and risk-averse personality type. The second parameter that you should pay attention to is that the amount of your capital is also important in this direction and without it you cannot have a positive outcome of your decisions.

1. Use of risk reward strategy 2, of course, on the condition of profit statement

Today, one of the types of risk management strategies in digital currency is that you risk one percent of your total capital in each transaction. Of course, note that you cannot remain in your profit position for more than 2 times your risk. It is not your job to think that you can get rewards for high risks 4 and 5 and it requires several years of backtesting and study. You may find that someone in the RTM style has a risk-to-reward above 20.

First, this person may have to wait one to two months to get such a trading position. The second point is that this person is busy studying and taking back tests for at least 8 to 10 hours a day. The third point is that his full-time job is trading and he cannot experience significant growth without it. The fourth point is that this person’s experience in the market is at least 5 years profitable. As a result, don’t be fooled by Instagram ads and imaginative trade packages and try. be realistic

Think about what you would lose before such an achievement. If you are new to the digital currency market, the best risk management strategy in digital currency is to focus on low rewards and high profit numbers. Finally, you must have the ability to identify long-term trends and multi-time frames. Otherwise you will face different problems.

2. One of the types of risk management strategies in digital currency is the risk-free strategy provided that there are parallel transactions

Before we teach this risk management strategy, note that the total loss of your two parallel positions should not be higher than 1-2% of your total capital. Because otherwise you will simply be removed from the market. Having a compounding loss can easily destroy your future trading career. Look at the image below to better understand the amount of compound loss as well as the amount of profit required to break even. As you can see, to cover a 30% loss, you would need to make nearly 43% profit to break even.

In order for you to be able to use parallel trading, you first identify the market trend. Once you have identified the market trend. Now you have to find two entry points to the position. One optimistic and one pessimistic, when your two positions are activated. When you reach reward one, one position is risk-free and the other remains unchanged. When you get two rewards, one position is closed and the second position becomes risk-free. Of course, note the position that remained open when Reward 3 was achieved. Your stop will be transferred to your reward one.

You repeat this process until you are removed from the market. Of course, note that your stop should be based on market support and resistance, and you cannot move without finding a suitable place. Note that the best strategy is to choose dynamic support and resistance as your main trend reference. You can for

To better find these points, use the article “Technical analysis of support and resistance” completely and comprehensively.

final word

In this article, we discussed the best risk management strategies in a complete and comprehensive manner. Note that you need to work on your market psychology to become a trader and also increase your business profits. Otherwise, you cannot expect to get good results. You must have the will to stop trading at your profit and loss. Otherwise, risk management strategies will be of no value to you.

Finally, if you have any questions or doubts about any part, you can raise it with us. In the comments section, our friends will answer you as soon as possible. On the other hand, note that the best strategy for you is to pay attention to the amount of risk in each transaction.