The Blueprint || Risk Management Strategies on Investments

PexelPhoto by Tima Miroshnichenko:

The reasons why many dread crypto us because they fear loosing their funds especially when it comes to trading aspect. People lose everyday and people also gain everyday. As an investor, you're an entrepreneur, someone who takes risks. If you're a crypto investor, how can you manage the risk of loosing money when you carryout trades on the crypto ecosystem? This post will enlighten one strategy that can help you manage the risk we take.

Reducing and managing risks is very essential to every investor or trader. They'll weight their profits and potential losses or may likely enter less risky trades to avoid emotions that follows. What is risk management and how can you apply proper risk management when trading?

Risk Management simply involves the prediction of potential financial risk involved in investments and how it can be minimized. It also involve plans or strategic actions implemented by investors after identifying the risks involved. These strategic plans doesn't remove risks totally from the market but reduces and helps us manage them. If you're to notice, investors employ the strategies involved in managing portfolios risk in their investments.

You'll be hearing of take profit and stop loss. That stop loss is actually strategies of risk management to avoid losing their funds by a declination. Many just jump into investments without considering how they can manage their risks. Here are methods one can take to manage his risk.

• Deciding to take on risk in any asset but not spending money to avoid potential loss

• Transferring the risk to a third party at any cost.

• Assets with potential risks shouldn't be invested on.

• Diversifying across your potential to reduce the financial consequences which involves losses in any risky investment.

Risk Management strategy is very important in crypto as it's one of the high-risk investment asset class available to an investor. While crypto is advancing and prices aren't stable, we must employ important strategies to avoid potential risks which makes you a successful trader. Below are two strategies that can benefit your portfolio on crypto.

• consider the 1% rule
• take profit and stop loss...etc

I'll just highlight what one of these entails and In my next post, I'll show you how it's done.

The 1% rule is a risk management strategy that entails not risking more than 1% of the capital you used on a trade or investment. Let's imagine you want to enter a trade with $1000 using this strategy, you'll have to risk 1% of this $1000 which is $10.

_{screenshot from my mentor's group}

If the market turns otherwise, they'll lose only what the set without affecting the entire capital. There are some greedy investors who end up losing a lot of money because they fail to apply good risk management strategy.

My next post stresses the next risk management strategy which can be more helpful and beneficial than the first.

Source of knowledge

_{crypto class group via zoom}