Trading is not simply about buying as much as you can afford, then hoping for the best.
No, we need to determine:
- how much we are comfortable LOSING in any single trade
- how much we can AFFORD to lose in any single trade
- how many losses we can suffer before we RUN OUT of money
To do this you need to understand how much you are prepared to risk on each trade. People use different methods to work this out. For example some people use the 3% rule, whereby they only ever risk 3% of their entire account, on any one trade. While others, trying to get rich quick, will risk 50% of their entire account, which only after a couple losses seriously kills their ability to trade.
Whatever method you use, and what ever amount that is, be it $5, $50, $500, $1000, whatever, you then need to calculate how many BTC, or DOGE, or Tesla(TSLA), or Apple(APPL), you need to buy/sell such that you only risk that amount.
In this video I show you the formula to do this, and I give you two examples.
Ex #1 is a LONG trade on BTC.
Ex #2 is a SHORT trade on BTC.
As per my comments at the end of the video, I have created a spreadsheet to help you calculate the above without having to do the math yourself. The spreadsheet will also allow you to calculate using Leverage, and Exchange Fees. So keep an eye out for that and the instructional video that will follow.
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(just a bit of crypto fun, enjoy)
Thanks for watching.
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