Generally, risk management strategies can be defined as identifying, evaluating and analyzing all the risks and uncertainties that are associated with your trading. It is especially important to understand the extents of a particular type of risk in each trade and adjust one's behavior according to a pre-established strategy. The core of every trader's strategy naturally lies within personal qualities of a trader, as well as trader fund's volume and other conditions surrounding the everyday practice in the market.
In crypto trading, much like in traditional one, a fewer number of investors outperform the majority of the rest. This pattern, however, is not seen on VHCEx, as our estimates show that there are over 70% of VHCEx traders who constantly profit from trading on a weekly basis. The reason for this is, of course, our fee-free trading promotion. A lot of studies show that the main source of traders' lack of liquidity and failure to profit in long-term after costs is trading fees. Even though 0.1-0.15% fee per each trade (the average among crypto exchanges) might not seem like a lot, it actually always adds up to become a major burden for an active trader. And the higher frequency of one's trades is, the more of a burden fee tends to become over a mid-term period of time.
Never invest what you can't afford to lose
Plain and simple, this rule has already become a cliche, but it is the one to stay true to, no matter what. Your VHCEx account should never be deposited with a large fraction of your net cash beholdings or net worth. Never borrow money to trade. Never take the money from urgent or importance expenses to trade them. In this meaning, trading is somewhat akin to betting, although it is nowhere near in terms of risk of losing the traded assets completely.
Put quality of your trades before the quantity
Some traders mistakingly think that the more you trade, the more chances there are that you will end up securing profit from as many calls as possible. However, as we mentioned before, the increased number of trades per period fuels your risk of ending up trailing the market average - and this is not what you want. Carry out your deep analysis of the asset you are about to buy/short and hold your coin for as long as it takes for you to get your Xses.
Diversify your portfolio
Another boring cliche, but the decades of practice in traditional trading (being perfectly applicable to crypto trading) have demonstrated the stone-hard effectiveness of this rule. Of course, by diversifying your portfolio you lose the opportunity to catch some crazy profit and a lot of people tend of FOMO by doing that, but if you are a low- or even medium-risk investor, this is what you want - allocate your net assets among at least 5-6 coins you've done research about.