Bitcoin Trading Money Management Styles and Methods in Bitcoin Trading

The best way to practice successful bitcoin trading money management in Bitcoin is for an investor to keep losses lower than the profits they make. This is called risk to reward ratio.

Bitcoin Trading Account Management Methods

This method is used to increase the profitability of an investment strategy by trading only when you have the potential to make more than 3 times more than what you are risking.

If you invest using a high risk reward ratio of 3:1 or more, you significantly increase your chances of becoming profitable in the long run. The Chart below shows you how:

In the first bitcoin trading example, you can see that even if you only won 50% of your bitcoin trade transactions in your cryptocurrency trading account, you would still make a profit of $10,000.

Even if your win rate went lower to about 30% you would still end up profitable - Bitcoin Trading Account Management Principle - Bitcoin Trading Money Management.

Just remember that whenever you have a good risk to reward ratio, your chances of being profitable as a bitcoin trader are much greater even if you have a lower win percentage for your bitcoin trading strategy.

Never use a risk to reward ratio where you can lose more pips one bitcoin trade than you plan to make. It does not make sense to risk 1,000 dollars in order to make only 100 dollars.

Because you have to win 10 times which to make the 1,000 dollars back. If you ONLY lose once you have to give back all your bitcoin trading profits.

This type of investment strategy makes no sense and you will lose on the long term.

Bitcoin Trading Account Management Methods

The percentage risk method is a method where you risk the same percentage of your account balance per transaction - Bitcoin Trading Account Management Methods.

Percentage risk based method says that there will be a certain percentage of your bitcoin trading account equity balance that is at risk per trade. To calculate the percent risk per each bitcoin trade transaction, you need to know two things, the percentage risk that you've chosen and lot size of an open cryptocurrency order so as to calculate where to put the stop loss cryptocurrency order. Since the percent is known, we shall use it to calculate the lot size of the bitcoin trade order to be placed in the btcusd trading market, this is known as position size.

Example

If you have an account balance of $50,000 in your cryptocurrency trading account and risk percent is 2%

Then 2 % is equal to $1,000

Other factors to consider include:

• Maximum Number of Open Bitcoin Trade Positions

A final point to consider is the maximum number of open bitcoin trade positions that is the maximum number of cryptocurrency trades that you want to be in at any one given time. This is another factor to decide when managing cryptocurrency trading account capital.

If for example, you chose a 2%, you may also say chose to be in a maximum of 5 bitcoin trade positions at any one given time. If you open 4 trade positions and all 4 of those positions close at a loss on the same day, then you would have an 8% decrease in your account balances that day.

• Invest Sufficient Capital

One of the worst mistakes that investors can make in bitcoin trading is attempting to open a bitcoin trading account without sufficient capital.

The bitcoin trader with limited capital will be a worried investor, always looking to minimize losses beyond the point of realistic trading, but will also be frequently taken out of the bitcoin trade transactions before realizing any success out of their bitcoin trading strategy.

• Exercise Discipline

Discipline is the most important thing that a bitcoin trader can master to become profitable. Discipline is the ability to plan your work and work your plan.

It is the ability to give a bitcoin trade the time to develop without hastily taking yourself out of the btcusd trading market simply because you are uncomfortable with risk. Discipline is also the ability to continue to stick to your bitcoin trading plan even after you have suffered losses. Do your best to cultivate the level of discipline required to be profitable.

Managing Account Capital Basics

bitcoin trading money management, is the foundation of any bitcoin trading system as it helps investors to improve their chances to get profit trading on the btcusd trading market. It is especially important when transacting in the bitcoin trading leveraged cryptocurrency market, which is considered to be probably one of the more liquid financial market but at the same time one of the riskiest.

If you want to invest successfully in the btcusd trading market you should realize that it is very important to have an effective bitcoin trading strategy of bitcoin trading money management because you will be using bitcoin trading leverage to place your crypto orders - Bitcoin Trading Account Management Basics.

The difference between average profits and losses should be strictly calculated, the profits on average should be more than the losses on average when trading, otherwise bitcoin trading will not yield any profits. In this case an investor has to formulate their own bitcoin trading account management rules, success of each person depends on their individual traits. Therefore, every investor makes his own bitcoin trading strategy and formulates their own bitcoin trading money management guidelines based on the above guidelines.

When you are placing your crypto orders put your stop loss cryptocurrency orders in order to avoid huge losses. Stop loss orders can also be used to lock in profit.

Consider the chance to get profit against chance to get loss as 3:1 - this risk: reward ratio should be favorable more on the profit side.

Considering these bitcoin trading rules and guidelines, you can use them to improve profitability of your bitcoin trading strategy and try to develop your own bitcoin trading strategy that will possibly give you good profits when trading with it.