Bitcoin Money Management Strategies Methods

How to Calculate Risk Management BTCUSD Crypto

In any biz, in order to make a btcusd crypto profit one must learn how to manage risks. To make bitcoin profits in trading bitcoin you as a trader need to learn about the different bitcoin risk management techniques discussed on this learn trading bitcoin guide site.

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

What's DrawDown in Bitcoin Trading?

As bitcoin traders the number one risk in trading bitcoin trading is known as draw down - this is the amount of money you have lost in your cryptocurrency account on a single bitcoin trade transaction.

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

What's Maximum BTCUSD DrawDown?

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

Relative Draw Down & Maximum Crypto Draw Down in Crypto - How Do I Calculate Risk Management Bitcoin?

BTCUSD Crypto Draw-Down is $442.82 (4.40%)

Max BTCUSD Crypto DrawDown is $1,499.39 dollars (13.56%)

To know how to generate above in trading bitcoin reports using MetaTrader 4 bitcoin crypto currency platform: Generate Bitcoin Crypto Currency Trading Reports in MetaTrader 4 Guide - Bitcoin Trade Money Management System Tutorial - Bitcoin Risk Management Excel Spreadsheet

How to Calculate Risk Management Bitcoin Cryptocurrency

The in trading bitcoin example illustrated below shows the difference between risking a small percent of your bitcoin trading capital compared to risking a higher percentage. Good How to Calculate Risk Management Bitcoin principles requires you not to risk more than 2 % of your total bitcoin equity on 1 single bitcoin trade transaction.

Bitcoin Crypto Currency Percentage Risk Technique

How Do I Calculate Risk Management Bitcoin Crypto? - How to Calculate Risk Management BTCUSD Crypto

2% & 10% Bitcoin Money Management Rule - How to Calculate Risk Management Cryptocurrency - Importance of Money Management in Trading Bitcoin

There is a large difference between risking two % of your btcusd account equity compared to risking 10 % of your equity on one bitcoin crypto currency trade transaction.

If you happened to go through a losing bitcoin crypto currency streak & lost only 20 crypto trade transactions in a row, you'd have gone from starting btcusd crypto equity balance of $50,000 dollars dollars to having only $6,750 dollars left in your account if you risked 10% on every btcusd crypto trade. You would have lost over 87.5 percentage of your bitcoin crypto currency equity.

However, if you only risked 2 % you would have still had $34,055 in your bitcoin trading account which is only a 32% bitcoin loss of your total bitcoin crypto currency account equity. This is why it's best to use the 2 % risk management strategy in trading bitcoin.

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

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

The point is that you want to setup your How to Calculate Risk Management Bitcoin rules so that when you do have a bitcoin loss making period, you will still have enough in trading bitcoin equity to open a trade transaction next time.

If you lost 87.5 percentage of your in trading bitcoin trading capital you'd have to make 640 % bitcoin crypto currency profit to get back to break-even.

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

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

Concept of BreakEven - Bitcoin Trade Funds Management System Lesson

Crypto Equity Management Methods - How Do I Calculate Risk Management BTCUSD?

Cryptocurrency Account Equity and Break Even - Capital Management Methods - Bitcoin Trade Equity Management System Lesson

At 50% bitcoin crypto currency drawdown, one would have to make 100% on their invested bitcoin capital - a task accomplished by less than 5 % of all bitcoin traders world-wide - just to break-even on a bitcoin account with a 50% btcusd crypto loss.

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

The more equity you as a btc/usd trader lose, the harder it is to make it back to your original btcusd crypto account size.

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

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

In trading btcusd, traders use bitcoin stop bitcoin loss orders which are put in order to minimize bitcoin losses. Controlling risks in trading bitcoin involves putting a bitcoin trading stop bitcoin loss order after placing an new bitcoin trading order.

Effective Bitcoin Crypto Currency Risk Management

Effective in trading bitcoin risk management requires controlling all risks in trading bitcoin & one should create a money management bitcoin system & a equity management in trading bitcoin plan. To be in trading bitcoin or any other business you must make decisions involving some risk. All in trading bitcoin factors should be analyzed to keep risk to a minimum & use the above bitcoin equity management tips on this article - Bitcoin Money Management System Tutorial.

Ask yourself? Some Bitcoin Trading Tips

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

2. Do you grade the risks encountered by you as a trader when in trading bitcoin in a structured way? - Do you have a money management bitcoin strategy and a in trading bitcoin plan? have you as a trader read about this learn in trading bitcoin topic which is well covered explained here on this learn bitcoin trading web site for beginner traders.

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

4. Are trading decisions made on the basis of reliable and timely bitcoin market information and based on a in trading bitcoin strategy or not? Have you read about in btcusd crypto systems on this learn bitcoin crypto currency website.

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

6. Over what time period do the in trading bitcoin risks of your in trading bitcoin activities exist? - Do you as a trader hold in trading bitcoin trade positions long term or short-term? what type of bitcoin crypto trader are you?

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

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

9. Have your bitcoin crypto currency equity management guide-lines been adequately addressed, to ensure that you make & keep your in trading bitcoin crypto currency profits.

Trading Bitcoin Risk Management & Bitcoin Money Management Methods - Draw-Down Bitcoin Risk Management Chart - DrawDown Bitcoin Trading Risk Management Calculation

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