Mastering Risk Management: The 1% Rule in Crypto Trading đĄïžđ**
Most traders fail not because they don't have a good strategy, but because they don't know how to manage their capital. If you want to survive and profit in this volatile market, you must master the **1% Rule**.
**What is the 1% Rule?**
It simply means you should never risk more than **1% of your total account balance** on a single trade. If you have a $1,000 account, your maximum loss on any trade should be $10.
**How to Calculate Your Position Size:**
Many beginners confuse "Position Size" with "Risk." If you have $1,000 and you buy $100 worth of BTC, your position size is $100. If your Stop Loss is 10% away from your entry, you are risking $10 (which is 1% of your $1,000).
**Why This Works:**
1. **Survivability:** To blow your account, you would need to lose 100 trades in a row.
2. **Emotional Control:** When you know exactly how much you might lose, you don't panic during market fluctuations.
3. **Recovery:** It is much easier to recover a 1% loss than a 50% loss. To recover a 50% loss, you need a 100% gain just to get back to zero.
**Pro Tip:** Always set your **Stop Loss (SL)** before you enter a trade. In a market where BTC can drop 5-10% in minutes, trading without an SL is gambling, not investing.
**Key Takeaway:** Focus on protecting your capital first. The profits will follow. Successful trading is a marathon, not a sprint.
**How much do you risk per trade?**
1%, 5%, or are you going "All-In"? Share your strategy in the comments! đ
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