QUOTE(yamasakai @ Nov 16 2017, 12:56 PM)
2% and 10% risk doesn't equate 2% and 10% investment of capital.
What the article says is to put your stop lost at between 2-10% of your buy in value. So you only lose max 2% or 10%, depending on your appetite.
What the article meant is that if you want to invest RM5,000, you should pull out when you lose RM100 (2%) or RM500 (10%).
Not invest RM100 if you have RM5,000 to invest.
There's another method where you put up 10% of your capital per trade so if the trade goes awful, you can invest more (buy the dip) to average out your investment cost, so your BEP is lower.
e.g buy 10 units of RM100 for RM1,000, price drop to RM70, so you buy another 10 units. So total investment is RM1,700 and average cost per unit is RM85. Instead of waiting for it to go up to RM100, before you can calculate the profit, you can start from RM85 instead.
Stop loss can be quite dangerous for crypto trading because of the huge swings and quick recoveries - one may end up selling at a low and to see price recovers within minutes after that low.What the article says is to put your stop lost at between 2-10% of your buy in value. So you only lose max 2% or 10%, depending on your appetite.
What the article meant is that if you want to invest RM5,000, you should pull out when you lose RM100 (2%) or RM500 (10%).
Not invest RM100 if you have RM5,000 to invest.
There's another method where you put up 10% of your capital per trade so if the trade goes awful, you can invest more (buy the dip) to average out your investment cost, so your BEP is lower.
e.g buy 10 units of RM100 for RM1,000, price drop to RM70, so you buy another 10 units. So total investment is RM1,700 and average cost per unit is RM85. Instead of waiting for it to go up to RM100, before you can calculate the profit, you can start from RM85 instead.
Nov 16 2017, 03:38 PM

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