How to reduce risk when trading cryptocurrencies

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

The main strategy of market participants here is based on the principle: buy when the price rises and sell when it falls.

There's no technical analysis or risk-reduction tactics involved; the process often resembles buying and selling currency at a regular exchange office.

The consequences of such behavior were evident to many during the recent collapse of the virtual currency market, when many cryptocurrencies fell in price by almost half.

And since some of the investors were not monitoring the exchange rate at that time, the consequences turned out to be quite dire.

How can you minimize risk when trading cryptocurrencies?

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

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

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

• Stop-loss is one of the most effective methods for preventing large losses, thanks to the trading platform. When making a trade, you simply set a loss level, which, when reached, will automatically close the trade.

• Take profit – planning the profit amount before opening a trade. It is advisable to set a price level that, when reached, will close your position with a profit.

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

• Message settings – to stay up-to-date on exchange rate changes, you can set up SMS messages to be sent 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 great that even if you trade only with your own money, the exchange rate change 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 traditional currency pairs. The key is to apply a professional approach and take full advantage of the capabilities of modern exchange trading software.