Bitcoin Money Management Rules Methods

How to Calculate Risk Management BTCUSD Crypto

In any biz, so as to make a profit a businessman must learn to manage the risks in that business. In btcusd crypto traing for a trader to make and earn a trading profit a trader must learn and also understand how to manage the risks when trading cryptocurrencies. To make bitcoin profits in trading you as a trader need to learn about the different bitcoin risk management techniques discussed on this learn trading btcusd guide site.

In btcusd crypto trading, the risk to be managed are potential btcusd crypto losses. Using bitcoin risk management rules will not only protect your bitcoin account but also make you profitable in the long-run.

What's DrawDown in Bitcoin Trading?

As bitcoin traders the number one risk in trading bitcoin trading is known as draw down - this is the amount of money you have lost on your cryptocurrency account on a single bitcoin trade transaction.

If you've got $10,000 dollars bitcoin capital and you make a bitcoin loss in a single bitcoin trade of $500, then your btcusd bitcoin crypto draw-down is $500 dollars divided by $10,000 which is 5 % bitcoin crypto draw down.

What's Maximum BTCUSD DrawDown?

This is the total sum of money you as a btc usd trader have lost on your btcusd trade account before you begin earning profitable trade positions. For example, if you have $10,000 in trading bitcoin capital and make five consecutive losing bitcoin trades with a sum total of $1,500 bitcoin loss before making 10 winning cryptocurrency trade positions with a total of $4,000 dollars bitcoin profit. Then the bitcoin drawdown is $1,500 dollars divided by $10,000 dollars, which is 15% maximum btcusd crypto draw-down.

Relative Draw Down & Maximum Crypto Draw Down in Crypto - How Do I Calculate Risk Management Bitcoin?

BTCUSD CryptoCurrency Draw-Down is $442.82 (4.40%)

Max BTC/USD Crypto DrawDown is $1,499.39 dollars (13.56%)

To know how to generate above in trading bitcoin reports using MT4 bitcoin platform: Generate Crypto Trading Reports in MT4 Lesson - Bitcoin Trade Money Management System Tutorial - Bitcoin Risk Management Excel Spreadsheet

How to Calculate Risk Management Bitcoin Cryptocurrency

The in trading bitcoin example illustrated below shows the difference between risking a small percent of your capital compared to risking a higher percentage. Good How to Calculate Risk Management Bitcoin principles requires you not to risk more than 2 % of your total bitcoin equity on 1 single bitcoin trade.

Bitcoin Percentage Risk Technique

How Do I Calculate Risk Management Bitcoin Crypto? - How to Calculate Risk Management BTCUSD Crypto

2% & 10% BTCUSD Money Management Rule - How to Calculate Risk Management CryptoCurrency - Importance of Money Management in Trading Bitcoin

There is a large difference between risking two % of your btcusd account equity compared & analyzed to risking 10 % of your equity on one bitcoin cryptocurrency trade position.

If you happened to go through a losing bitcoin streak & lost only 20 crypto trade transactions on a row, you'd have gone from starting btcusd crypto equity balance of $50,000 dollars dollars to having only $6,750 dollars left in your account if you risked 10% on every btcusd crypto trade. You would have lost over 87.5 percentage of your bitcoin crypto equity.

However, if you only risked 2 % you would have still had $34,055 in your bitcoin trading account which is only a 32% bitcoin loss of your total bitcoin account equity. This is why it's best to use the 2 % risk management strategy in trading bitcoin.

Difference between risking 2% & 10% on a single btcusd crypto trade is that if you risked 2% you would still have $34,055 dollars in your btcusd crypto account after 20 losing trade transactions.

However, if you risked 10% you would only have $32,805 dollars in your btcusd account after only five losing btcusd crypto trade transactions that's less than what you'd have on your account if you risked only 2% of your trading account and lost all 20 btcusd cryptocurrency trades.

The point is that you want to setup your How to Calculate Risk Management Bitcoin rules so that when you do have a bitcoin loss making period, you'll still have enough in trading bitcoin equity to open a trade next time.

If you lost 87.5 percentage of your in trading bitcoin trading capital you'd have to make 640 % bitcoin cryptocurrency profit to go back to break-even.

As compared to if you lost 32% of your in trading bitcoin capital you'd have to make 47% bitcoin profit to go back to break-even. To compare and analyze it with the bitcoin crypto examples 47% is much easier to break-even than 640% is.

The trading chart below shows what percentage you would have to make so that as you get back to breakeven if you were to lose a certain percentage of your in trading bitcoin trading capital.

Concept of BreakEven - Bitcoin Trade Funds Management System Lesson

Crypto Equity Management Methods - How Do I Calculate Risk Management BTCUSD?

CryptoCurrency Account Equity and Break Even - Capital Management Methods - Bitcoin Trade Equity Management System Lesson

At 50% bitcoin drawdown, a trader would have to make 100% on their invested bitcoin capital - a task accomplished by less than 5 % of all bitcoin traders world-wide - just to break-even on a bitcoin account with a 50% btcusd crypto loss.

At 80% btcusd crypto draw-down, a trader must quadruple their bitcoin trade equity just to bring and take it to the starting equity level. This is what is known as to "break-even" - which means - go back to your starting bitcoin trading equity balance that you as a btcusd trader started with.

The more equity you as a btc/usd trader lose, the harder it's to make it back to your original btcusd crypto account size.

This is why as a trader you should do everything you can to PROTECT your btcusd crypto account equity. Do not accept to lose more than 2 % of your btcusd crypto account equity on any one single btcusd crypto trade.

Bitcoin Crypto Currency Money management is about only risking a small percentage of your bitcoin crypto capital in each bitcoin trade so that as you can survive the losing streaks and avoid a big draw-down on your trading account.

In trading btcusd, traders use bitcoin stop bitcoin loss orders which are put so as to minimize bitcoin losses. Controlling risks in trading bitcoin involves putting a stop btcusd loss order after placing an new bitcoin trading order.

Effective Bitcoin Risk Management

Effective in trading bitcoin risk management requires controlling all risks in trading bitcoin & a trader should create a money management bitcoin system & a equity management in trading bitcoin plan. To be in trading bitcoin or any other business you must make decisions involving some risk. All in trading factors should be analyzed to keep risk to a minimum & use the above bitcoin equity management tips on this article - BTCUSD Money Management System Tutorial.

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