The main risk to expect with crypto trading is constant dramatic fluctuations in the value of a cryptocurrency. An investment worth thousands of dollars could lose value overnight, with little guarantee that it’ll rise again.
That’s why crypto trading demands proper risk management strategies.
Can you trade in crypto without losing?
It is impossible to trade in crypto without making any losses. Trading cryptocurrency is like investing in other assets, so be ready for losses. Even experienced cryptocurrency traders make losses. It is the level of losses one makes that matters.
Is cryptocurrency worth the hype?
With a solid plan and proper discipline, cryptocurrency can work for you. However, you must be ready to make a few losses as you learn the ropes.
8) Why you should have a Sound trading strategy
It doesn’t matter how skilled you are; you still need a sound trading strategy. This is one rule you can’t afford to break if you are to manage your risks.
A trading strategy is vital for any trader worth their salt. Not only will it allow you to build consistency in your trades, but it will also help you on your way to profitability.
A sound trading plan will help you in the following ways:
• It will prevent panic trading after inevitable losses
• You will lose less as you’ll stick to your plan
• The plan will have a sound exit strategy to avoid further losses
• Scaling to profitability will be easier
Therefore, it is in your best interest to develop a good trading plan and stick to it. That way, you’ll manage your risks better and not find yourself in too deep.
Conversely, without a plan, you’re more susceptible to emotional trading that’s rife with losses. A good strategy will help you avoid that.