How to reduce risk when trading cryptocurrencies

Thanks to the popularization of the cryptocurrency market, trading this asset only vaguely resembles classic stock trading.

The main strategy of market participants here is based on the principle - buy when the price goes up and sell when the price goes down.

What kind of technical analysis or risk mitigation tactics are there? The process often resembles the purchase and sale of currency at a regular exchange office.

Many people saw what this behavior leads to during the last drop in the virtual money market, when many of the cryptocurrencies fell in price by almost half.

And since some of the investors did not follow the exchange rate at that time, the consequences turned out to be quite sad.

How to minimize the risk when trading cryptocurrencies?

There are several simple techniques to help you avoid large losses when trading Bitcoin or altcoins.

• Trading on the platform - almost all ways to reduce risk are implemented through the trading platform - https://time-forex.com/kriptovaluty/platformy-dlya-torgovli-kriptovalyutoj

Transferring cryptocurrency transactions to the trading platform will make trading more civilized and less risky:

• Stop loss is one of the most effective methods to prevent large losses, thanks to the trading platform. When making a trade, you simply set the loss level, upon reaching which the trade will be closed automatically.

• Take profit – planning the amount of profit before opening a transaction. It is advisable to set the price level upon reaching which your position will be closed with a profit.

As practice shows, most losing trades were simply not closed on time with a profit.

• Message settings – in order not to miss a change in the rate, you can configure the sending of SMS messages to your phone in the trading platform. This way you won't miss any sudden price changes:

• Minimum leverage – the volatility of cryptocurrencies is so high that even if you trade only with your own money, the change in rate can reach tens of percent per day.

Leverage is recommended to be used only for short-term trading under constant control.

With the right approach, trading cryptocurrencies can be no more risky than trading regular currency pairs. The main thing is to apply a professional approach to this process and all the possibilities that modern software for stock trading provides.