If you don’t know how to manage your risk, please stop trading futures. The amount of money people are losing trading is scary.
Here are 3 simple things that can help you manage risk:
1. DCA wisely.
Let’s say you have $300. Don’t open the whole position at once. Use $100 first and keep the other $200 for DCA if your setup is still valid. First entry is not always the best entry.
2. Learn how to use Hedge Mode.
I always say if you’ll master the hedge mode, you will never lose any trade no matter what.
Let’s say your $ETH short is going against you. Instead of closing it in loss, you can open an opposite $ETH trade i.e $ETH long with a smaller margin. This will throw your liquidation too far and will give you time to manage the trades properly.
For example, if you have a $100 short, you can open a $40-50 long. If the price keeps going up, the long helps reduce your loss. If the price starts dumping again, your bigger short still makes more than the long loses.
I always do this. With the hedge mode, I closed my $30k loss trades in profits.
3. Use Stop Loss
I rarely use stop loss because I always have too much capital in backup. But stop loss can always help you manage risk and avoid losing big .
If you have $100 and you want to trade $ETH or $SOL , your stop loss should be -20%($20) and make sure you always use less than 10x leverage so that there will be enough room for volatility.
If you want to trade highly volatile coins like $BANK, then you can use -30% as your stop loss but make sure you always use 10x leverage and below.
Here are 3 simple things that can help you manage risk:
1. DCA wisely.
Let’s say you have $300. Don’t open the whole position at once. Use $100 first and keep the other $200 for DCA if your setup is still valid. First entry is not always the best entry.
2. Learn how to use Hedge Mode.
I always say if you’ll master the hedge mode, you will never lose any trade no matter what.
Let’s say your $ETH short is going against you. Instead of closing it in loss, you can open an opposite $ETH trade i.e $ETH long with a smaller margin. This will throw your liquidation too far and will give you time to manage the trades properly.
For example, if you have a $100 short, you can open a $40-50 long. If the price keeps going up, the long helps reduce your loss. If the price starts dumping again, your bigger short still makes more than the long loses.
I always do this. With the hedge mode, I closed my $30k loss trades in profits.
3. Use Stop Loss
I rarely use stop loss because I always have too much capital in backup. But stop loss can always help you manage risk and avoid losing big .
If you have $100 and you want to trade $ETH or $SOL , your stop loss should be -20%($20) and make sure you always use less than 10x leverage so that there will be enough room for volatility.
If you want to trade highly volatile coins like $BANK, then you can use -30% as your stop loss but make sure you always use 10x leverage and below.