Risk Management

To prevent excessive trading, strive to have no more than three positions open simultaneously when actively trading. If you exceed this number, consider closing some positions before entering new ones. For day trading, close positions by the end of the day. If you engage in scalp trading, avoid holding positions for more than half a day. For swing trading, you can hold positions for extended periods, but ensure to regularly adjust your position size and utilise dollar-cost averaging (DCA) techniques

Ideally, aim to make your positions risk-free as soon as possible. This means that scaling your position should cover the amount lost when your stop-loss (SL) is hit or by placing your SL at the entry point.

It is advisable to avoid using more than one-third of your portfolio as margin in a trade, particularly if the risk-to-reward ratio is below 1.5. Steer clear of emotional or FOMO trades, and if you do choose to enter such a trade, it should be an isolated position. If there isn't sufficient time for personal technical analysis or if you disagree with the technical analysis provided by others, it's better to refrain from entering the trade altogether.

Instead of attempting to enter trades all at once, it is recommended to use multiple limit orders within the entry zone, unless instructed otherwise. This approach helps minimise exposure to price movements in the opposite direction while selecting an entry.

Taking profits can be a prudent approach when positions are yielding profits. Rather than waiting for the perfect price to take profits or for the price to reach the predetermined take profit (TP) level, you can scale small amounts of profits to protect against price swings or retracements in the opposite direction. This strategy also helps reduce exposure to market volatility and lock in gains, increasing the likelihood of a profitable trade.

To make a position risk-free, consider placing a stop-loss (SL) at the entry point once the position has moved in your favour. This way, even if the price retraces to the entry level, the trade will be exited at break-even, eliminating the risk of losing money on that trade.

When identifying strategic levels to scale positions, look for support and resistance areas on the chart or Fibonacci retracement levels to determine potential profit-taking levels. The objective is to secure some profits while keeping a portion of the trade open to capture additional gains. You may also consider scaling out of positions incrementally, such as taking profits at 25%, 50%, and 75% of the profit potential. Ultimately, the decision of how and when to scale profits depends on your individual risk tolerance and trading strategy.

Develop a solid grasp of the Crypto futures market: Familiarise yourself with the terminology and gain practical experience using a demo account before risking real funds.

Implement a stop-loss strategy: In futures trading, where price movements can be rapid and substantial, a stop-loss order is essential. Place a stop-loss order immediately upon opening or during the position setup to mitigate potential losses.

Manage leverage prudently: Crypto futures offer high leverage, enabling the potential for significant profits but also exposing traders to substantial risks. Exercise caution and employ leverage levels that align with your risk tolerance and financial capabilities.

Stay informed with current news: Keeping abreast of the latest news and developments in the crypto market is crucial. This awareness empowers you to navigate potential risks and seize favourable opportunities.

Recognise that crypto is not a get-rich-quick solution: Be wary of being swayed by online gurus or get-rich-quick schemes. Building profitability in the crypto space requires consistency, patience, and informed decision-making.

Manage emotions effectively: Emotions can significantly impact trading outcomes. Cultivate a calm and rational mindset when making trading decisions, avoiding impulsive actions driven by emotional responses.