Welcome to the Crypto Trading Group podcast, your go-to weekly guide on how to become a successful cryptotrader! Each week, we dive into the latest trends in the crypto market, providing in-depth analysis and updates to help you stay ahead. Whether you're just starting out or looking to sharpen your trading skills, this podcast is packed with valuable insights to boost your crypto journey.

Be sure to follow us on X at @CryptoRebel4 for even more tips and updates throughout the week.

Disclaimer: This podcast is for educational purposes only. Trading cryptocurrencies comes with risk, and any trades you make are done at your own risk. Always do your own research before making any financial decisions.

Now, let’s get into lesson 8 of "how to become a cryptotrader!"

Risk management is crucial to succeed in crypto trading. The fact that 90% of traders lose money highlights the importance of having a solid risk management plan. The core of risk management is ensuring that you never risk more than 3-5% of your total portfolio on a single trade. This means that even if you experience a series of losing trades, you can still protect your capital and continue trading.

Instead of focusing on leverage, which can be risky, it’s essential to learn how to calculate the correct position size for your trades. Your position size is the number of units of an asset you buy, and it should be determined based on your risk per trade and the distance between your entry point and your stop-loss. By doing this, you ensure that even if a trade goes against you, you only lose a pre-determined amount.

Another key aspect of risk management is understanding the different types of risks involved in crypto trading. These include:

• Market risk: The risk that an asset decreases in value.
• Liquidity risk: The risk of not being able to sell your assets due to a lack of buyers in the market.
• Operational risk: The risk of losses due to errors, such as human mistakes or software issues.
• Systemic risk: The risk that an event in the broader market, like the collapse of a large company, affects your investments.

By identifying and understanding these risks, you can develop strategies to mitigate them.

Finally, it’s important to remember that profitability in crypto trading is not only about winning most of your trades, but also about achieving a good risk-to-reward ratio (R:R) over a series of trades. Even the best futures traders win only about 40% of their trades, so it’s crucial to ensure that your gains outweigh your losses. You do this by determining your entry, stop-loss, and target for each trade using technical analysis.

By following a disciplined approach to risk management, you can improve your chances of success in the volatile world of crypto trading.