Preserve capital is the #1 strategy. 🛡️
Yesterday we talked about the 1–2% rule. Today: two ways it can fail without you noticing.
1) Hidden correlation
5 trades of 1% in coins that follow the $BTC are not 5 risks of 1% — it’s a 5% bet on the same thesis. If BTC drops, they all drop. Fix: add up the risk of the correlated trades and cap the total at 2–3%.
2) The calculation a beginner repeats
Real example with $BTC a at ~$84.076:
• Nearest support: $82.563 (24h low) | Resistance: $87.395 (weekly high)
• Stop below support → $82.300 (not just any round number)
• Risk per BTC = 84.076 − 82.300 = $1.776
• Account of $1,000 with 1% risk ($10): size = 10 ÷ 1.776 = 0.0056 BTC (~$473)
• Only enter if the target pays ≥ 2x the risk: $87.395 gives 3.319 ÷ 1.776 ≈ 1.9:1 — below the minimum, so THIS trade is not taken. Discipline also means not entering.
And 10 consecutive 1% stops aren’t −10% — they’re ~−9.6%, because the risk compounds. The account survives. A wrong all-in doesn’t.
Many small stops are worth more than one “all-in”: that’s how you survive the market.
#Bitcoin #RiskManagement
Yesterday we talked about the 1–2% rule. Today: two ways it can fail without you noticing.
1) Hidden correlation
5 trades of 1% in coins that follow the $BTC are not 5 risks of 1% — it’s a 5% bet on the same thesis. If BTC drops, they all drop. Fix: add up the risk of the correlated trades and cap the total at 2–3%.
2) The calculation a beginner repeats
Real example with $BTC a at ~$84.076:
• Nearest support: $82.563 (24h low) | Resistance: $87.395 (weekly high)
• Stop below support → $82.300 (not just any round number)
• Risk per BTC = 84.076 − 82.300 = $1.776
• Account of $1,000 with 1% risk ($10): size = 10 ÷ 1.776 = 0.0056 BTC (~$473)
• Only enter if the target pays ≥ 2x the risk: $87.395 gives 3.319 ÷ 1.776 ≈ 1.9:1 — below the minimum, so THIS trade is not taken. Discipline also means not entering.
And 10 consecutive 1% stops aren’t −10% — they’re ~−9.6%, because the risk compounds. The account survives. A wrong all-in doesn’t.
Many small stops are worth more than one “all-in”: that’s how you survive the market.
#Bitcoin #RiskManagement
