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Riskreward

🔥 Bitcoin Lost The Uptrend: Crash Alarm! 🚨If you enjoy this analysis, please like and follow. Recently I've made several analyses on Bitcoin. In general, I was more bearish than bullish based on historical pre-halving year statistics. Furthermore, I made several analyses on Bitcoin's historically low volatility where I argued that a big move was coming to the markets very soon. WIth the stock markets falling and BTC trading on edge, are we going to see a big dump soon? Maybe. I'd like to see a move below 28k first to increase the probability of this break out being real and not just a wick below support where bulls will step in and V-shape reverse to 30k. Still, a move towards 20k is in the cards. Since the 15.5k lows I argued that the bear market lows are in, and I still hold this opinion. The trade on the chart has a very decent risk-reward ratio, even for a big asset like BTC. Time will tell. Please share your thoughts in the comments🙏
Short
by FieryTrading
37
🔥 SUSHI'S Best Trade You Will Make This YearSUSHI has found very strong support at the 2020 lows a couple of weeks ago. Since then, SUSHI has been seeing strong gains. This trade is based on the idea that SUSHI's bear market low is in and that we will generally only go up for the foreseeable future. I'm expecting a minor correction over the coming weeks, hence the entry at 0.7, stop below the May lows, target at 23$. This is a long-term trade and can take another 2 years to hit the profit target. Nevertheless, a risk-reward of >100 is incredible and can lead to some serious gains.
Long
by FieryTrading
13
🔥 SHIBA Bearish Channel: Bear Market Bet!SHIBA has a very decent over the last month or so. It's likely that we get some kind of reversal in the near future. I'm going to increase our bearish chances by waiting patiently for SHIBA to reach the top resistance of the channel. Yes, this trade playing out would require a continuation of the bear market for the next few months. This could also be considered as a hedging trade. Stop just above 1400, target at 500, results in a very decent R/R of 7.92
Short
by FieryTrading
13
🔥 CLV Best Risk Reward Trade Of The Year?CLV appears to have broken out of a 2 year downtrend. This could be the starting signal of a multi-year bullish trend. In order to confirm the break out we're going to wait patiently for a daily candle to close above 0.048. Once we made the entry, stop below the most recent swing lows, target at 2$. This allows us to build a massively reward trade with a potential risk-reward of over 145, one of the best trade of this year. Keep in mind that this is a long-term position and could take 1-2 years to play out.
Long
by FieryTrading
23
🔥 SXP Crazy Bounce Idea: Support + Bullish DivergenceSXP seems to have found (temporary) support alongside the diagonal purple support line drawn on the chart. This reversal trade idea is based on the idea that this support will hold and cause a bounce, helped by the bullish divergence that's apparent on the RSI. The high of the last couple of days is around 0.335, so we're going to wait for a daily candle to close above that area to initiate the trade. Stop under the recent lows. With a target at the April highs we can construct a very good trade with extremely high Risk-Reward.
Long
by FieryTrading
16
🔥 ID Bullish Break Out After Months Of SellingIf you enjoy this analysis, please give it a like and a follow. ID is one of the newer tokens on Binance. At the start of the listing it showed some strength, but has sadly been selling for months at this point. However, ID has broken out of a one month downtrend by breaking through a diagonal resistance line, see chart. My assumption is that, with some luck, we can at least get back to the May highs. For an optimal risk-reward I'm betting on a reversal in the short-term, but not below the most recent swing lows of around 0.248. This results in a very good risk-reward of well over 22.
Long
by FieryTrading
29
🔥 MANA Best Long-Term Trade For Next Bull-Run: High Gains🚨If you enjoy this analysis, please give it a like and a follow. MANA has been losing value for nearly 2 years at this point. However, I anticipate that there's some decent money to be made on MANA in case this falling wedge pattern plays out as I expect. MANA looks weak, and will likely lose more value in the coming weeks/months. I'm going to be very patient for MANA to see more selling and step in around the bottom support of the falling wedge. Stop around 10% below the wedge's support, target at 5$. This results in a massive risk-reward of almost 95. If this plays out, this trade can be your best trade of the decade with a huge 95x return on your risk.
Long
by FieryTrading
23
🔥 XRP Ultimate Game Plan For The Next Bull-RunIf you enjoy this analysis, please give it a like and a follow. With XRP's lawsuit behind us, a lot of the bearish sentiment has been cleared. Still, it appears that this event had little staying power with the bulls, since XRP has given up around half the gains it made shortly after the SEC news. Nevertheless, I'm long-term bullish on XRP. As seen on the chart, XRP is seemingly trading in a parallel channel. The top two resistance lines are direct copies of the bottom support line. I'm going to wait for XRP to drop towards the bottom support, and ideally bounce from it. My target for the next bull-run is placed at 7$, stop just below the channel's support. This will give us a massive risk-reward of almost 110, which is a serious money maker if it plays out well. Keep in mind we can hit the bottom support further away in time, which moves the entry up.
Long
by FieryTrading
36
Are You Taking the Right Risks in Trading? Best RISK Per Trade What portion of your equity should you risk for your trading positions? In the today's article, I will reveal the types of risks related to your position sizing. Quick note: your risk per trade will be defined by the distance from your entry point to stop loss in pips and the lot size. 🟢Risking 1-2% of your trading account per trade will be considered a low risk. With such a risk, one can expect low returns but a high level of safety of the total equity. Such a risk is optimal for conservative and newbie traders. With limited account drawdowns, one will remain psychologically stable during the negative trading periods. 🟡2-5% risk per trade is a medium risk. With such a risk, one can expect medium returns but a moderate level of safety of the total equity. Such a risk is suitable for experienced traders who are able to take losses and psychologically resilient to big drawdowns and losing streaks. 🔴5%+ risk per trade is a high risk. With such a risk, one can expect high returns but a low level of safety of the total equity. Such a risk is appropriate for rare, "5-star" trading opportunities where all stars align and one is extremely confident in the positive outcome. That winner alone can bring substantial profits, while just 2 losing trades in a row will burn 10% of the entire capital. 🛑15%+ risk per trade is considered to be a stupid risk. With such a risk, one can blow the entire trading account with 4-5 trades losing streak. Taking into consideration the fact that 100% trading setups does not exist, such a risk is too high to be taken. The problem is that most of the traders does not measure the % risk per trade and use the fixed lot. Never make such a mistake and plan your risks according to the scale that I shared with you. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
15
Guard Your Funds: Only risk what you can afford to lose.🎉 Risk Management tip for Vesties and @TradingView community! 🚀 😲 We all know the saying "only risk what you can afford to lose," but do you know the powerful impact it can have on your trading journey? 🤔 In the ever-evolving world of cryptocurrency and futures trading, one fundamental principle stands as the cornerstone of profitable and sustainable trading journeys: Only risk what you can afford to lose. Embracing this essential concept is crucial for preserving capital, maintaining emotional stability, and cultivating a disciplined approach to risk management. In this article, we will delve into the significance of operating money and risk within the confines of one's financial capacity and explore the key pillars that underpin this approach. Understanding Risk Tolerance and Capital Allocation: 1. Assessing Individual Risk Tolerance: To truly understand one's risk tolerance and establish a robust risk management strategy, traders are encouraged to engage in a thought exercise that involves imagining potential losses in tangible terms. Visualize throwing money into the bin or burning it completely, purely to experience the feeling of losing money. This exercise may seem unconventional, but it serves a crucial purpose: it helps traders gauge their emotional response to monetary losses. During this exercise, consider the two extreme scenarios: the first being the largest amount of money you can lose without causing significant distress, and the second being the maximum amount of loss that would completely devastate you financially and emotionally. These two amounts represent your Fine Risk and Critical Risk , which reflects the sum you are willing and able to lose over a specific period of time without compromising your financial well-being. 👉 The next step involves breaking down the Fine Risk into smaller, manageable parts. 🔑 Divide the Fine Risk into 10 or even 20 equal parts, each representing the risk amount for every individual trade. This approach is designed to create a safety net for traders, especially when they encounter unfavorable market conditions. For instance, imagine a scenario where you face five consecutive losing trades. With each trade representing only a fraction of your Fine Risk, the cumulative loss remains relatively small compared to your risk capability, providing emotional resilience and the ability to continue trading with confidence. By splitting the Fine Risk into smaller portions, we can safeguard their capital and ensure that a string of losses does not result in irreversible damage to our trading accounts or emotional well-being. Additionally, this approach promotes a disciplined and structured trading mindset, encouraging us to adhere to their predefined risk management rules and avoid impulsive decisions based on emotions. Remember, risk management is not solely about avoiding losses but also about preserving the means to participate in the market over the long term. 2. Establishing a Risk-to-Reward Ratio: The risk-to-reward ratio is a critical metric that every trader must comprehend to develop a successful trading system. It is a representation of the potential risk taken in a trade relative to the potential reward. For a well-balanced and sustainable approach to trading, it is essential to ensure that the risk-to-reward ratio is greater than 1:1.10. A risk-to-reward ratio of 1:1.10 implies that for every unit of risk taken, the trader expects a potential reward of 1.10 units. This ratio serves as a safety measure, ensuring that over time, the profits generated from winning trades will outweigh the losses incurred from losing trades. While there is a popular notion that the risk-to-reward ratio should ideally be 1:3, what truly matters is that the ratio remains above the 1:1.10 mark. Maintaining a risk-to-reward ratio of at least 1:1.10 is beneficial for several reasons. Firstly, it allows traders to cover their losses in the long term. Even with a series of losing trades, the accumulated profits from winning trades will offset the losses, allowing traders to continue trading without significant setbacks. Secondly, a risk-to-reward ratio higher than 1:1.10, combined with proper risk management and a well-executed trading system, enables traders to accumulate profits over time. Consistently achieving a slightly better reward than the risk taken can lead to substantial gains in the long run. 3. Determining Appropriate Position Sizes: Once you have a clear understanding of your risk amount and risk-to-reward ratio, you can proceed to calculate appropriate position sizes for each trade. To do this, you can use a simple formula: Position Size = (Risk Amount per Trade / Stop Loss) * 100% Let's take an example to illustrate this calculation: Example: Risk Amount per Trade: $100 Risk-to-Reward Ratio: 1:2 Stop Loss: -4.12% Take Profit: +8.26% Using the formula: Position Size = ($100 / -4.12%) * 100% Position Size ≈ $2427.18 In this example, your calculated position size is approximately $2427.18. This means that for this particular trade, you would allocate a position size of approximately $2427.18 to ensure that your risk exposure remains at $100. After executing the trade, let's say the trade turned out to be profitable, and you achieved a profit of $200. This outcome is a result of adhering to a well-calculated position size that aligns with your risk management strategy. By determining appropriate position sizes based on your risk tolerance and risk-to-reward ratio, you can effectively control your exposure to the market. This approach helps you maintain consistency in risk management and enhances your ability to manage potential losses while allowing your profits to compound over time. Emotions and Psychology in Risk Management: A. The Impact of Emotions on Trading Decisions: Emotions can significantly influence trading decisions, often leading to suboptimal outcomes. Traders must recognize the impact of emotions such as fear, greed, and excitement on their decision-making processes. Emotional biases can cloud judgment and result in impulsive actions, which can be detrimental to overall trading performance. B. Recognizing and Managing Fear and Greed: Fear and greed are two dominant emotions that can disrupt a trader's ability to make rational choices. By developing self-awareness and recognizing emotional triggers, traders can gain better control over their reactions. Implementing techniques to manage fear and greed, such as setting predefined entry and exit points, can help traders navigate turbulent market conditions. C. Developing a Disciplined Trading Mindset: A disciplined trading mindset is the bedrock of successful risk management. This involves adhering to a well-defined trading plan that outlines risk management rules and strategies. By staying committed to the plan and maintaining a long-term perspective, traders can resist impulsive actions and maintain discipline during times of market volatility. D. Techniques for Avoiding Impulsive and Emotional Trading: To avoid impulsive and emotional trading, traders can employ various techniques. Implementing cooling-off periods before making trade decisions allows traders to gain clarity before acting. Seeking support from trading communities or mentors provides valuable insights and helps traders stay grounded. Utilizing automated trading systems can reduce emotional interference and ensure trades are executed based on predefined criteria. In the world of cryptocurrency and futures trading, the fundamental principle of "only risk what you can afford to lose" remains the cornerstone of successful trading. Embracing this concept is essential for preserving capital, maintaining emotional stability, and cultivating a disciplined approach to risk management. Understanding individual risk tolerance and breaking down total risk into smaller portions allows traders to navigate unfavorable market conditions with resilience. Maintaining a risk-to-reward ratio above 1:1.10 ensures that profits outweigh losses over time, while determining appropriate position sizes enables effective risk control. Emotions play a significant role in trading decisions, and managing fear and greed empowers traders to make rational choices. Employing techniques to avoid impulsive trading, like cooling-off periods and seeking support, reinforces a disciplined trading mindset. In conclusion, adhering to the principle of only risking what you can afford to lose leads to sustainable success in the dynamic trading world. By implementing effective risk management practices, traders enhance their chances of achieving profitability and longevity in their trading journeys. 📝👋 Feedback is super important to us! 😊 We would absolutely love to hear your thoughts and comments about the article. 🧐 Did you find the information helpful and well-explained? 🤔 Your feedback means a lot to us and will help us improve our content to provide better insights in the future. 😇 Thank you so much for taking the time to share your thoughts! 🙏 We're excited to hear from you! 💬
INDEX:BTCUSDEducation
by Vestinda
The ABCs of Risk Management in Stock TradingThe ABCs of Risk Management in Stock Trading Introduction In the exhilarating world of stock trading, mastering the art of risk management is a crucial skill that separates successful traders from the rest. Effective risk management is all about safeguarding your capital and minimizing potential losses while maximizing opportunities for profit. In this blog post, we will explore the ABCs of risk management in stock trading and how it can lead to more sustainable and rewarding trading experiences. A - Assessing Risk Tolerance Before delving into the markets, it's essential to evaluate your risk tolerance. Be honest with yourself about how much capital you can afford to put at risk without causing emotional distress. Your risk tolerance will determine your position sizing and the percentage of your portfolio allocated to each trade. B - Balancing Diversification Diversification is a key risk management strategy. Avoid putting all your funds into a single stock or sector. By diversifying your portfolio across different assets, industries, and geographic regions, you reduce the impact of any individual investment's adverse performance on your overall portfolio. C - Cutting Losses with Stop-Loss Orders Stop-loss orders are a trader's best friend. Implementing stop-loss levels before entering a trade ensures that you automatically exit a position if it goes against you beyond a predetermined point. This helps protect your capital and prevent significant losses. D - Doing Your Due Diligence Knowledge is power in the stock market. Thoroughly research and analyze potential trades before executing them. Understand the company's fundamentals, technical indicators, and market trends to make informed decisions and reduce the element of surprise. E - Emotion Management Emotions can cloud judgment and lead to impulsive decisions. Successful traders maintain emotional discipline and stick to their trading plans, regardless of market fluctuations. Embrace a rational approach to trading and avoid letting emotions dictate your actions. F - Focusing on Risk-Reward Ratio A positive risk-reward ratio is a fundamental aspect of risk management. Aim to take trades with higher potential rewards than the associated risks. This means that even if some trades result in losses, profitable trades should outweigh them over time. G - Gradual Position Sizing Avoid going all-in on a single trade. Gradually scale into positions, especially in volatile markets. This way, you can manage risk and adjust your exposure as market conditions change. Conclusion As you venture into the exciting world of stock trading, remember that managing risk is paramount to long-term success. By following the ABCs of risk management - assessing risk tolerance, balancing diversification, cutting losses with stop-loss orders, doing due diligence, managing emotions, focusing on risk-reward ratio, and employing gradual position sizing - you can navigate the markets with confidence and achieve your trading goals. Stay disciplined, stay informed, and let effective risk management be the cornerstone of your stock trading journey. Happy trading and may your endeavors be both rewarding and fulfilling!
NASDAQ:TSLAEducation
by MindOverMarket
How To Lose Small When Trading BigLosing trades aren't always bad. It's when you don't manage the trade before you lose that can make losing trades bad. Let me walk you through 4 positions that I stacked week and show you how I avoided losing thousands of dollars and kept the loss to under 1%. Firstly, it's important to understand that I am a swing trader which means I observe a variety of higher timeframes. Secondly, I use my own strategy called TMP. It's based around every pullback within the trend cycles so I can trade the continuation of the trend. Thirdly, This analysis was mostly done on the weekly, daily, 4 hour, and 2 hour timeframe. Lastly, I aim for more than 2:1 reward to risk trades and for these trades I was sure to keep my losses below $500 a trade. Trade 1 s3.tradingview.com This trade was based on the weekly timeframe. The reward to risk was around 4.50 and I knew I'd be in this trade long term. Probably around a month or so, maybe longer. I risked 0.50% in the trade because I needed to build the analysis and I knew I wanted to stack more trades in case price went my way which you will see me begin to build in the new few trades. Trade 2 s3.tradingview.com This trade was based on the 4 hour timeframe. Price made a new higher high on the 4 hour. I set a pending order so when price pulled back it would trigger me into the trade. This trade was a 8:1 reward to risk ratio. I risked 0.50% on this trade. Price began to go my way. I felt good about the trade. Trade 3- Trailing the stop begins s3.tradingview.com Price made a new higher high. I had to drop down to the 2 hour timeframe to get a good view of this trade. My feelings on this trade was neutral. I reminded my self that no matter what I'd follow my rules. So I set another pending order and went about my day. The Reward to risk on this trade was a 16:1. I risked 0.25% on this trade. Now at this time I'm sitting at 1.25% of risk in 3 trades. This was when I decided to move my stop loss on both trades underneath the third trades higher low. I had just a little risk left on both of these trades but nothing heart stopping. I was stoped out of the third position for a for around -0.27%. But my first two trades continued to run. Trade 4- The last stand s3.tradingview.com Then price went my way. I realized I wanted to be long again and the entry sat right where I'd just entered my precious losing trade. The reward to risk was 19:1. Whew! This was the opportunity of opportunities for me this week and I couldn't avoid entering. So I set another pending order to buy. It triggered and a few hours later, I lost the trade. and my other trades were taken out as well. I lost a total of $761. This was only 0.76% loss in my account because of how I managed my trades as price went up in profit. Had I kept my trades at the same risk(1%) and never moved my stop loss I could have lost $4000 this week. The key to losing small is to build out your positions each time price makes a new high or low depending on the direction of the trade. I built 4 positions and I have to say I would do it again. The potential for big rewards to risk got me, and I knew risk 1% on each trade would have meant I'd lose my funded account due to their drawdown rules. I cannot lose 3% in one day. Thats very manageable when you decrease your risk per trade. Thats what had to be done. If you don't think you can pass a challenge by decreasing you risk, your rewards aren't big enough. If you learn anything from the trades I entered this week, the previous statement above is how can lose small while trading big. Do I still believe NZDCAD can go up? Yes! As long as price stays above the weekly higher low. I'll build out this scenario again. Well, I really do pray you enjoyed this recap from my trading this week. I had no other trades on my other currency pair so it was a smooth trading week. Be sure to like this article if you enjoyed it and found it intriguing. If you have any questions do ask them below. Much love and blessing❤️ Shaquan
Long
by ShaquanLopez
2
🔥 OG Low Volatility Accumulation Break OutOG saw an incredibly bullish move earlier this year, where it gained over 350% in a mere two days. However, since topping around 16$ OG has been falling with no end in sight. This trade is based on the idea that OG is currently in a horizontal accumulation phase (purple area) and will soon, helped by Bitcoin, move back up towards the 2023 highs. Most likely, Bitcoin will have to break out through 31,000$ in order to give investors the confidence to launch OG upwards. Stop just below the most recent June lows, target at 15$. With a tight stop we managed to construct a very high risk-reward trade that most likely has a high expected return. A more defensive strategy would be to take partial profits around 9.5$.
Long
by FieryTrading
9