5 Tips for Beginners to Manage Risk on Crypto Investments -

All investments always come with risks, gaining knowledge about risk management before investing will make you disciplined in trading as beginners, and help you to avoid possible risks associated with investing. So let’s have a look at 5 tips for beginners to manage risk on crypto investments!
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1% Rule
The 1% rule is a simple risk management strategy that entails not risking more than 1% of your total funds on an investment. For example, you can buy $10,000 worth of Bitcoin (BTC) and set a stop-loss order to sell at $9,900, meaning that you would cut your losses at 1% of your total investment fund which is equal to $100.
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Furthermore, you can also buy $100 worth of Ethereum (ETH) without setting a stop-loss order, as you would only lose a maximum of 1% of your total fund. If the price of ETH went down to zero, it won’t affect the size of your investments, but it will affect the amount you are willing to risk on an investment.
Learn more about Risk Reward Ratio, an analytical tool that compares acceptable risk to expected returns here >> https://bit.ly/RRR-en
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Set stop-loss and take profit points
A stop-loss order sets a predetermined price for an asset at which the position will close. The stop price is set below the current price, and when triggered, helps protect against further losses. In contrast, a take-profit order sets a price at which you want to close your position, and lock in a certain profit.
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Stop-loss and take-profit orders help you manage your risk in two ways. First, they can be set up in advance to be executed automatically. There’s no need to monitor them all the time, and your pre-set orders will be triggered if prices are particularly volatile. This also allows you to set limits for the profits and losses you can take.
Learn more about the three different order types here >> https://bit.ly/order-types-en
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Diversify portfolio
Diversifying your portfolio is one of the most popular and fundamental tools to reduce your overall investment risk. For instance, If you invested your entire funds in one cryptocurrency, and it suddenly dropped by 50%, you would lose half of your investment. But, what if you had ten assets, and each was only 10% of your entire funds, then your loss would be less significant. Therefore, always analyze the market and diversify your portfolio with a variety of different coins and tokens. Don’t put all your eggs in one basket!
Learn more about Bitazza Portfolio function here >> https://bit.ly/portfolio-function-en
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Exit strategy
Implementing an exit strategy is a simple but effective method for minimizing the risk of heavy losses. You can take profits or cut losses at a predetermined point by using limit orders. You can set them to automatically trigger at your limit price, whether you want to take profit or set a maximum loss.
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Do your own research (DYOR)
Doing your own research #DYOR is the key to gaining knowledge and insights into the background information and use cases of projects in order to help you develop strategies and understand the risks associated with investing in the Crypto space.
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