Cryptocurrency Equity Management Strategies Methods for Serious Traders in Bitcoin Trading

Proper Risk Management Bitcoin Trade Money Management Bitcoin PDF

In any biz, so as to earn a profit a btcusd trader must learn how to manage risks. To make profits in bitcoin trading you as a trader need to learn about the different bitcoin equity management methods discussed on this learn bitcoin guide web-site.

In btcusd crypto currency online trading, the risk to be managed are potential losses. Using bitcoin risk management rules won't only protect your btcusd account but also make you profitable in the long-run.

What's Draw-Down in BTCUSD Crypto Trading?

As btcusd crypto currency traders the number 1 risk in btcusd crypto currency trading is known as draw down - this is the amount of money you have lost in your bitcoin trade account on one btcusd crypto currency trade.

If you have $10,000 dollars bitcoin trade capital and you make a loss in a single bitcoin trade of $500, then your btcusd crypto currency draw down is $500 divided by $10,000 dollars which is 5 percent% bitcoin draw down.

What's Maximum BTCUSD Trading Draw Down?

This is the total amount of money you as a btc/usd trader have lost in your bitcoin trade account before you begin making profitable trades. For example, if you have $10,000 dollars bitcoin trade capital and make five consecutive losing bitcoin trade transactions with a total of $1,500 loss before making 10 winning trade transactions with a total of $4,000 dollars profit. Then the btcusd crypto currency trading maximum draw down is $1,500 dollars divided by $10,000, which is 15% maximum bitcoin draw down.

Bitcoin Money Management in Bitcoin Trading - What's Money Management in Bitcoin Trading?

Bitcoin Draw-Down is $442.82 dollars (4.4%)

Maximum BTCUSD Crypto Currency Draw Down is $1,499.39 (13.56%)

To learn how to generate above bitcoin reports using MT4 btcusd crypto currency platform: Generate Bitcoin Trading Reports in MetaTrader 4 Guide - Cryptocurrency Money Management in Bitcoin Trading - Bitcoin Trade Tools of Money Management in Bitcoin Trading

Bitcoin Draw Down & Funds Management in Trading Bitcoin Market

The example illustrated below shows the contrast between risking a small percentage% of your bitcoin capital compared to risking a higher %. Good Bitcoin Draw Down & Funds Management in Trading Market principles requires you as a trader not to risk more than 2 % of your total bitcoin trading account capital on any 1 single bitcoin trade.

Bitcoin Percentage Risk Technique

Bitcoin Draw Down & Equity Management in Trading Bitcoin Market - BTCUSD Money Management in BTCUSD Trading

2 percent & 10 percent Bitcoin Trade Funds Management Rule - Bitcoin Draw Down & Equity Management in Trading Bitcoin Market

There is a big contrast between risking two percent% of your btcusd equity compared to risking 10 % of your equity on one bitcoin trade.

If you happened to go through a losing bitcoin streak & lost only 20 crypto trade transactions in a row, you would have gone from beginning btcusd crypto currency equity balance of $50,000 dollars dollars to only having $6,750 dollars left in your account if you risked 10% on every bitcoin crypto currency trade. You would have lost over 87.50 % of your btcusd crypto currency account equity.

However, if you only risked 2 % you would have still had $34,055 dollars in your btcusd crypto currency account which is only a 32 percent loss of your total btcusd crypto currency account equity. This is why it is best to use the 2 percent risk management formula in cryptocurrency.

Difference between risking 2 % & 10% on one btcusd crypto currency trade is that if you risked 2 % you would still have $34,055 in your btcusd crypto currency account after 20 losing trades.

However, if you risked 10 % you would have only $32,805 dollars in your bitcoin account after only five losing bitcoin trade transactions that is less than what you would have in your trading account if you risked only 2% of your account & lost all 20 bitcoin crypto transactions.

The point is you want to setup your Bitcoin Draw Down & Equity Management in Trading Market guide-lines so that when you do have a loss making period, you'll still have enough bitcoin trading equity to open a trade transaction next time.

If you lost 87.50 % of your btcusd trade capital you'd have to make 640% profit to get back to break-even.

As compared to if you lost 32 % of your bitcoin trade capital you'd have to make 47% profit to get back to the break-even. To compare it with bitcoin examples 47 % is much easier to break even than 640% is.

The chart below shows what percentage you would have to make so that you get back to break even if you were to lose a certain percentage of your bitcoin trade capital.

Concept of BreakEven - Cryptocurrency Funds Management in Trading Tutorial

Crypto Equity Management Strategies Methods for Serious Traders in Bitcoin Trading - Money Management in Crypto Trading

Cryptocurrency Account Equity and Break Even - Cryptocurrency Equity Management Strategies Methods for Serious Traders in Bitcoin Trading - Cryptocurrency Funds Management in Trading Tutorial

At 50% bitcoin draw-down, one would have to earn 100% on their bitcoin trade capital - a feat accomplished by less than 5% of all bitcoin traders world-wide - just to breakeven on a bitcoin account with a 50 % loss.

At 80% draw down, one must quadruple their btcusd crypto currency equity just to bring it back to its original equity. This is what is known as to "break-even" - which means - get back to your original bitcoin trade equity balance which you as a trader started with.

The greater the equity you as a btcusd trader lose, the harder it is to make it back to your original btcusd crypto currency account size.

This is why you should do everything you can to PROTECT your btcusd crypto currency account equity. Do not accept to lose more than 2 % of your bitcoin equity on any one single bitcoin trade.

Bitcoin Money management is about only risking a small percentage% of your bitcoin trade capital in each bitcoin trade so that you can survive your losing streaks and avoid a big draw-down on your bitcoin trading account.

In btcusd crypto currency trading, traders use stop loss cryptocurrency orders which are put in order to cap btcusd crypto currency losses. Controlling risks in btcusd crypto currency trading involves putting a stoploss order btcusd crypto currency order after placing an new btcusd trading order.

Effective Bitcoin Money Management

Effective bitcoin risk management requires controlling all risks in cryptocurrency and one should come up with a equity management bitcoin system and a equity management bitcoin plan. To be in bitcoin trading or in any other biz you must make decisions that-involve some risk. All bitcoin factors should be interpreted to keep risk to a minimum and use the above bitcoin equity management tips on this learn bitcoin lesson - Cryptocurrency Money Management in Trading Tutorial.

Ask yourself? Some BTCUSD Crypto Currency Tips

1. Can the bitcoin risks to your bitcoin trading activities be identified, what forms do they take? & are these clearly understood and planned for in your bitcoin plan? All the bitcoin risks should planned for in your bitcoin plan.

2. Do you grade the risks encountered by you when bitcoin trading in a structured way? - Do you have a equity management strategy & a bitcoin plan? have you as a trader read about this learning bitcoin tutorial which is well covered and discussed here on this learn bitcoin web site for new traders.

3. Do you know maximum potential risk of each exposure for each trade which you place?

4. Are trading decisions made on the basis of reliable & timely btcusd crypto currency market information & based on bitcoin strategy or not? Have you read about bitcoin systems on this studying bitcoin web site.

5. Are the bitcoin risks big in relation to the trade turnover of your invested bitcoin trade capital and what impact could they have on your bitcoin profits margins and your bitcoin account margin requirements?

6. Over what time periods do the bitcoin risks of your bitcoin trading activities exist? - Do you hold bitcoin trade transactions long term or shortterm? what type of btcusd crypto currency trader are you?

7. Are the exposures in trading one off or they are recurring?

8. Do you know about methods in which your bitcoin risks can be reduced or hedged and what it would cost in terms of profit if you didn't include these stipulated measures to cap potential loss, and what impact would it make to any up side of your bitcoin crypto currency profit?

9. Have your btcusd crypto currency money management guide-lines been adequately addressed, to ensure that you make & keep your btcusd crypto currency profits.

Cryptocurrency Funds Management Strategies Methods for Serious Traders in Bitcoin Trading - Cryptocurrency Money Management in Bitcoin Trading - Bitcoin Trade Tools of Money Management in Bitcoin Trading

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