How to implement the risk relationship and rewards in trade: Security and Control Guide
The world of cryptocurrencies is quickly and constantly develops. With the increase in new currencies and tokens, it is increasingly important for merchants to handle the risk. One of the key strategies used by experienced merchants is the implementation of the risk and reward relationship, also known as “Stop -los” or “Risk Management” approach. In this article, we will examine how to implement the risk relationship and reward in trade, and provide risks to guarantee and manage risk.
What is the risk relationship and reward?
The risk ratio and the reward, also known as a stem, is a mathematical formula that is used to determine the amount of profits or losses that the merchant can afford before taking out the store. It is calculated by dividing potential remuneration due to the maximum amount that can be lost.
For example, if you change a couple of bitcoins with a risk ratio of 2: 1, it means that you should only risk $ 20 ($ 100 /2) for every $ 100 in potential profits.
How to implement the risk ratio and reward
Follow the following steps to implement the risk relationship and reward in your commercial strategy:
- Do you look for short -term gains or long -term profits? Are you trying to maximize your returns or minimize losses?
- Choose a risk level : Decide the maximum sum that can be risky for trade. This is generally calculated using a formula such as:
Risk = Reward / (1 + Detention Percentage)
When there is a risk of the maximum amount that can be lost, and the percentage of detention is the percentage of the possible remuneration used to calculate the cap.
- Set your business plan : Create a business plan that describes its risk and reward relationship, as well as any other key element, such as position size, profit objectives and stop levels.
- Monitor your stores : Monitor your stores to make sure you follow your planned strategy.
Types of risk and reward relationships
There are several types of risk indicators and rewards used by operators to exchange cryptocurrencies:
* 2: 1 ratio : This is the most common risk ratio and the reward, where for every $ 100 in potential profits, only $ 20 can be lost.
* 3: 1 or 4: 1 : These greatest risks and rewards are often used for long -term operations or when trying to maximize their yields.
* percent of the stop (SL%) : This is the percentage of the potential reward used to calculate the Stopy. Normal SL values include:
* 20-50%
* 30-60%
* 40-70%
Tips for Risk Management
In addition to implementing the risk relationship and reward, there are several other risk management tips:
* Position Remembrances : Avoid assuming too much risk to business size, which is based on general risk tolerance and commercial objectives.
* stop level
: Establish the clear stop levels that will be used to limit the potential losses in each store.
* Risk management tools : Consider using risk management tools such as protection indicators, stop or security strategies that help manage risk.
Conclusion
The implementation of the risk index and remuneration is a necessary step in risk management and the maximization of yields in cryptoma trade. According to these steps and advice, you can create a solid basis for your strategy and prepare for success. Be sure to stay disciplined, carefully monitor your stores and adjust your strategy as necessary to make sure you make the most of your risks.
Renieing of Responsive
This article is intended only at the end of information and investment advice should not be considered. Cryptomic traffic has significant risks, including loss of capital and may not be adequate for all investors.