The "2% Rule" for every trade
Ever felt that stomach-dropping panic when a trade goes completely sideways and wipes out a chunk of your portfolio? We’ve all been there, and it's confusing how to stop it!
When we dive into crypto trading, it's easy to get carried away by excitement, thinking about big wins.
The "2% Rule" is kind of like deciding before a friendly poker game that you'll only ever bet a tiny fraction of your total fun money, say, up to 2%.
This means if you have $1,000 to play with, your maximum loss on any single trade, like for an ETH spot trade, should be capped at $20.
But, it’s scary easy to just enter a trade, hoping for the best, without actually calculating that stop-loss before you even click "buy," and suddenly you’re losing more than you ever intended.
😩 Therefore, instead of just guessing, we consciously set our stop-loss order at a point where if the trade goes against us, we only lose that small, predefined 2%.
This strategy gives us such a massive relief, preventing one bad trade from destroying our entire trading account and allowing us to stay in the game longer.
So, by always limiting your risk to a tiny percentage like 2%, you're not just trading; you're building resilience and protecting your financial future! ✨
#CryptoTradingTips #RiskManagement #TradingStrategy #BinanceSquare
- Disclaimer: Sharing knowledge and insights as part of learning and growing together. For educational purposes only, not financial advice.