Bitcoin Money Management Styles and Methods in BTCUSD Trading

The best way to practice successful bitcoin trading money management in Bitcoin is for an investor to keep losses lower than the profits they make. This is called risk to reward ratio.

Bitcoin Account Management Techniques

This technique is used to increase the profitability of an investment strategy by trading only when you've the potential to make more than 3 times more than what you're risking.

If you invest using a high risk reward ratio of 3:1 or more, you significantly increase your chances of becoming profitable in the long run. The BTCUSD Chart below shows you how:

In the first bitcoin examples, you can see that even if you only won 50% of your trade transactions in your account, you would still make a profit of $10,000.

Even if your win rate went lower to about 30% you would still end up profitable - Trading Account Management Principle - Bitcoin Money Management.

Just remember that whenever you have a good risk to reward ratio, your chances of being profitable as a trader are much greater even if you have a lower win percentage for your trading strategy.

Never use a risk to reward ratio where you can lose more pips one bitcoin trade than you plan to make. It doesn't make sense to risk 1,000 dollars in order to make only 100 dollars.

Because you've to win 10 times which to make the 1,000 dollars back. If you ONLY lose once you have to give back all your bitcoin trading profits.

This type of investment strategy makes no sense & you will lose on the long term.

Bitcoin Account Management Techniques

The percentage risk technique is a technique where you risk the same percent of your trading account balance per transaction - Trading Account Management Methods.

Percent risk based method says that there will be a certain percentage of your account equity balance that is at risk per trade. To calculate the percent risk per each bitcoin trade transaction, you need to know two things, the percentage risk that you've chosen and lot size of an open order so as to calculate where to put the stop loss order. Since the percent is known, we shall use it to calculate the lot size of the bitcoin trade order to be placed in the btcusd market, this is what is known as position size.

Example

If you have an account balance of $50,000 in your cryptocurrency trading account & risk percent is 2 %

Then 2 % is equal to $1,000

Other factors to consider include:

• Maximum Number of Open Bitcoin Trade Positions

A final point to consider is the maximum number of open bitcoin trade positions that is the maximum number of trades that you want to be in at any one given time. This is another factor to decide when managing cryptocurrency account capital.

If for examples, you chose a 2%, you might also say chose to be in a maximum of 5 bitcoin trade positions at any one given time. If you open 4 trade positions & all 4 of those positions close at a loss on the same day, then you would have an 8% decrease in your account balances that day.

• Invest Sufficient Capital

One of the worst mistakes that investors can make in bitcoin trading is attempting to open a account without sufficient capital.

The trader with limited capital will be a worried investor, always looking to minimize losses beyond the point of realistic trading, but will also be frequently taken out of the bitcoin trades before realizing any success out of their trading strategy.

• Exercise Discipline

Discipline is the most important thing that a trader can master to become profitable. Discipline is the ability to plan your work and work your plan.

It is the ability to give a bitcoin trade the time to develop without hastily taking yourself out of the btcusd trading market simply because you're uncomfortable with risk. Discipline is also the ability to continue to stick to your bitcoin trading plan even after you've suffered losses. Do your best to cultivate the level of discipline that's required so as to be profitable.

Managing Account Capital Basics

Bitcoin trading money management, is the foundation of any bitcoin system as it helps investors to improve their chances to get profit trading on the btcusd market. It is especially important when transacting in the bitcoin trading leveraged market, which is considered to probably be one of the more liquid financial markets but at same time also one of the riskiest.

If you want to invest successfully in the btcusd market you should realize that it's very important to have an effective trading strategy of bitcoin trading money management because you will be using bitcoin leverage to place your crypto orders - Account Management Basics.

The difference between average profits & losses should be strictly calculated, the profits on average should be more than the losses on average when trading, otherwise bitcoin trading will not yield any profits. In this case an investor has to formulate their own account management trading rules, success of each person depends on their own individual traits. Therefore, every trader makes his own trading strategy & deveop their own money management guidelines based on the above guidelines.

When you are placing your orders put your stop loss cryptocurrency orders in order to avoid huge losses. Stop loss orders can also be used to lock in profit.

Consider the chance to get profit against chance to get loss as 3:1 - this risk: reward ratio should be favorable more on the profit side.

Considering these trading rules and guidelines, you can use them to improve profitability of your bitcoin strategy & try to create your own strategy that will possibly give you good profits when trading with it.