If you risk 5% of your capital in each trade and have a potential to earn only 1%, then the risk does not pay off. You should look for opportunities where risk-return is best for you, because that is where opportunities are to be seized.
- Avoid Doing Aggressive Trading
Trading aggressively is perhaps the biggest mistake most new traders make. If a small sequence of losses is required to lose all of your capital then this suggests that each open position is too risky. A good way to correct the risk level is to adjust the size of your position to reflect the volatility of the currency pair you are trading. But, remember that the more volatile you are, the lower your position should be. Using the https://royal-t.online/ review is the best deal there.
- Be Realistic
One of the reasons why new traders make trading aggressive is because of their unrealistic expectations. They think that by doing aggressive trading they will make lots of money fast, but it just happens the other way around. However, on the contrary, the best traders continue to make consistent gains. Setting realistic goals and having a conservative approach is the way to start trading.
- Admit when you are wrong
The golden rule of trading is to let profits grow and cut losses immediately. You need to get out of a position when there is evidence that you have made a bad decision and you may lose even more money. It is a naturally human tendency to try and turn a bad situation into a good situation, but in crypto trading is a huge mistake.
This is the reason – it is not possible to control the market.
- Prepare for Worst (Past Performance is Not Indicative of Future Results)
We cannot know the future of financial markets, but we have plenty of evidence from the past. What happened before may not happen again, but it shows that it is possible. For this reason, it is important to look at the history of a particular currency pair you are trading. Think about what kind of action might occur and how you can protect yourself against this bad scenario. Do not overestimate the odds of the opposite happening – and have a plan for every situation.