How to Minimize Bitcoin Margin Trading Losses

Management of Risk


There is no way to completely avoid losses, thus the goal is to keep losses and risks to a minimum. Money management refers to the amount of money you should put into your trading. A 2% risk, for example, suggests that you are willing to lose 2% of your capital in a trade.

This also means that you'd have to be wrong on 50 trades to lose your entire investment. This, however, is highly doubtful. Crypto margin trading is not a game of chance in which you must lose your entire investment if the trade goes wrong.


The amount of money you put into trading must also allow you to maintain a comfortable lifestyle. As a result, do not spend the money that you require to live. You will be in a very unpleasant situation if you are reliant on making earnings through trading.

If the price does not move in the desired direction, putting everything on one card can lead you to problems. For example, in crypto margin trading, this indicates that you should not put all of your money into one coin, but rather distribute it among several.


In any case, you must be willing to incur losses when you first begin trading. Even the most experienced traders have lost money at the beginning of their careers.


Never use excessive leverage.


Use as little leverage as possible. Even while many brokers offer leverage of up to 100x, this does not mean you should make use of it. With 100%, the difference between your entry price and your liquidation price is negligible. So the price may only move a fraction of a percent in the wrong way before your entire stake is lost.


You can avoid this by employing a stop loss, but it must be even tighter than the liquidation price; otherwise, the price will have little space for movement, and you will be stopped out and lose a significant amount of your position, even if the price will eventually turn in the right direction.


Trading Bitcoin on margin with a 100x leverage and no plan is risky.


Orders to Stop Loss Avoid Total Loss


Stop-loss orders allow you to keep a tight grip on your losses. This means you don't have to lose the entire 2% of your wager each time. (If this is the risk at which you want to stop).


A Stop Loss Order, for example, can get you out of a position at a given price, or as a percentage of the loss, in time to keep the majority of your stake if you have $1,000 in capital and staked 2% or $20 in a transaction. Even if the trade goes bad, you'll keep the majority of your investment.


Using a Trading Diary to Manage Risk


If you observe that the bulk of your transactions fails, you must investigate why. To do so, keep a trading journal in which you record all of your trades, including the entry price, expectations, gains and losses, stop-loss orders, and if required, a description of your emotions during the trade. This sounds complicated and odd, yet it has a significant benefit.


If you've set stop losses and been stopped out of a trade numerous times despite the transaction remaining open, it's because the stop loss was put too near to the entry price. Take-profit orders, on the other hand, can be set too tight, resulting in trends not being fully exploited on a regular basis. The market


More Risk-Avoidance Advice


Here are a few more guidelines to help you avoid treating trading on leverage like gambling and avoid making large losses right away.


1-Do your homework and keep learning. Make sure you've done your homework on the product and market you wish to enter. Increasing your knowledge will give you a better understanding of various trading scenarios.

2-Watch the news. To prevent missing out on entry and exit points, keep your finger on the pulse of the market.

3-Set aside your feelings. BTC margin trading is a business, therefore make reasonable trade entry and exit decisions.

4-Create a strategy and stick to it. Set aside time to develop your strategy based on study and testing, and then execute it along the route to earn your well-deserved reward at the conclusion.


Use a cryptocurrency exchange to start trading.


Trading cryptocurrency equities on the stock exchange might be exciting for beginners. GBTC is a Bitcoin trust that buys and sells Bitcoins. No direct Bitcoin investment is necessary when buying and selling these shares. The above-mentioned platform and wallet registrations are not required.


GBTC stock is sold at a premium. This suggests that purchasing Bitcoins is less expensive than purchasing GBTC Trust shares. The trade hours are another disadvantage. Cryptocurrency trading is a 24-hour market, whereas traditional exchanges have set trading hours.


TIP: Take a closer look at our training courses if you're searching for complete trader training. The PowerSignale stock round is recommended for people who have some experience but are looking for profitable signals.


Beginner's Guide to Coinbase as an Exchange


Coinbase is the simplest way to get started with crypto trading - buying, selling, and storing coins. This trading platform, however, presently only allows you to trade Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. If you're serious about cryptocurrency trading, you'll go with Bitfinex, Bittrex, Binance, or Kraken instead of Coinbase for more options and lower transaction charges.


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