Hello dear community.
Each trader is a part of discussion about leverages. Some of them say that it's risky, another just playing in casino with 50x.
But why leverages is not matter, and how do not lose all deposit? Read below.
Firstly, you need to know about 2 things.
Support line
I am confident that you know about support line a lot of info, but just reminder.
Support line is a zone when price jump back multiply time and coin start growing again.
Support line can be detected on each timeframe. But for our case we need to see on 1D and 4H timeframe.
Risk management
If you are trading without risk management, you will be bankrupt. However, what is that?
Risk management is the amount of funds in cash or percentage that you can risk in some trade.
For example:
You trade BTCUSDT with deposit 1000 USDT.
Before you make a trade, you need to decide how many USDT or % will be your risk. The funds that will be lost in the worst scenario of trade.
It can be 3-5% for start.
In USDT, it will be 30 - 50 USDT.
What is next?
Next, you should calculate your position size. I suggest using next formula:
Position size = Risk /(Buy level - Stop loss).
It means if closer to stop-loss you buy order the bigger position you have.
Buy level
Current chart has support zone on 22546-22261.
I suggest split your buy order on few slices on this zone.
Stop loss
I usually set stop loss behind this zone, in current example my stop at 22222
In this case, the formula will be:
50/(22403,5 - 22222) = 0.276 BTC is your position with risk in 5%.
In this example, will be ~6X leverage.
But if increase risk until 10%, leverage will be 12X.
Trading is not about casino, is about math.
Good luck and have good trades!
Each trader is a part of discussion about leverages. Some of them say that it's risky, another just playing in casino with 50x.
But why leverages is not matter, and how do not lose all deposit? Read below.
Firstly, you need to know about 2 things.
- Support line
- Risk management
Support line
I am confident that you know about support line a lot of info, but just reminder.
Support line is a zone when price jump back multiply time and coin start growing again.
Support line can be detected on each timeframe. But for our case we need to see on 1D and 4H timeframe.
Risk management
If you are trading without risk management, you will be bankrupt. However, what is that?
Risk management is the amount of funds in cash or percentage that you can risk in some trade.
For example:
You trade BTCUSDT with deposit 1000 USDT.
Before you make a trade, you need to decide how many USDT or % will be your risk. The funds that will be lost in the worst scenario of trade.
It can be 3-5% for start.
In USDT, it will be 30 - 50 USDT.
What is next?
Next, you should calculate your position size. I suggest using next formula:
Position size = Risk /(Buy level - Stop loss).
It means if closer to stop-loss you buy order the bigger position you have.
Buy level
Current chart has support zone on 22546-22261.
I suggest split your buy order on few slices on this zone.
Stop loss
I usually set stop loss behind this zone, in current example my stop at 22222
In this case, the formula will be:
50/(22403,5 - 22222) = 0.276 BTC is your position with risk in 5%.
In this example, will be ~6X leverage.
But if increase risk until 10%, leverage will be 12X.
Trading is not about casino, is about math.
Good luck and have good trades!
Trade active:
As you can see support line was not broken, keep moving.
Trade closed: target reached:
Support line is broken, be careful.
Trade closed manually:
BTW, on this graph, you can see how new support line works :) I hope it is useful.