One of the most important things in finance is risk management because if the amount of money we have is not managed properly we might lose it all.
we have a lot of good traders out there who probably could have been making more money but fail to manage their risk properly and what most people forget is that risk is not always about what you know but it is about what you don't know.
stop-loss
You have to believe in what you know and stick with it no matter what but in trading, you must accept the fact that your strategy is not perfect and anything can go wrong. sometimes is not always our strategy but any event could happen and this might lead to losing a lot of money the only way to prevent the unknown is by using stop-loss.
the main reason why people don't use stop loss is because of too much belief in a trade or a strategy and most times we might have been getting away with trading without stop loss but some people just like leaning in the hard way. stop loss is important in trading but diversifying our investment is good for investors.
diversification
Just like a trader that believes so much in his trade some investors believe so much in a project which is not extremely bad but makes us vulnerable to any attack, sometimes this investment we are going all in might not meet our expectations and in the process, we might lose all our life investment, any investors should spread out his money so that when the one doing poorly they won't be stranded.
conclusion
Risk management is very important and most times when things are going well we did use to see the need for it not until it cost us, it is always better to take precautions.
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The sad thing is that many people focus only on making profits on the crypto market and they ignore one of the most important things to do which is applying good risk management when trading , trading without risk management will only lead to failure on the market whether now or in the future.
Trading without risk management is as good as throwing the money away.
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In addition, greed and desperation are factors that contribute to a poor risk management.
Thanks so much for sharing
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Risk management is important but I think making a plan beforehand is the most important and following that plan. Ignoring the risk when your plan fails is never a good thing.
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