The cryptocurrency market is a highly volatile market. It is no secret that speculators from other markets have moved here precisely because of the volatility and inefficiency of the market.
The efficiency of the market is increasing all the time. ETFs, for example, the traditional economy already controls ~5% of all BTCs, these are both experienced market makers and already sophisticated players in the market, which in 2021 there were few. But market opportunities remain and there are many.
Now, meme coins and leveraged trading still contain opportunities to multiply your account in a matter of days and consequently lose your entire account in the same short time.
But I believe that many readers are still taking significant risk in the market and this article is about how to deal with that and make the deposit more stable.
If you are making tens and sometimes even hundreds of per cent on individual trades. The following approach is possible.
Always have a reserve
Preferably with a time lag, so that you cannot immediately take the reserve and average it. Or you can add it to your deposit immediately after a big loss and continue trading.
It is either a deposit in stables on the same exchange, but for a fixed term, or a position in DeFi. And in this case, if you take the reserve out suddenly, you lose some interest. It’s a defence against yourself if you get very frustrated with your losses and catch a tilt.
Withdraw profits
Artificially create a situation of gradual deposit growth. You have doubled and ‘feel you can double again’. Before you do, withdraw some of your profits.
There is a simple calculation here, if you have made several profitable trades in a row, or one or two with huge profits, sooner or later you will be faced with a losing trade.
And if your deposit was $1000 and now it’s $4000, a trade at (-25%) will set you back the amount of your original deposit. This is a common effect of constantly increasing rates.
Therefore, you should try to approach your losing trade not with an inflated deposit, but only with a gradual increase, you will keep some mathematical chances to grow and save your deposit.
Besides, psychologically it will be very difficult for you and you will make a lot of mistakes.
Possible profit distribution scheme
35% of all profits go into the reserve. Withdraw 35% of the profit, ideally only in fiat currency, if you have such an opportunity without high commissions.
In big cities there are many such opportunities. Or buy BTC, ETH with them, send them to steak, it should be even less accessible to you than the reserve. It is desirable not to consider the option that as a reserve you will send these funds to deposit again.
On a profit of 30%, your working deposit grows. As I wrote above, it is important that the deposit grows gradually.
Many people get too carried away with reinvesting profits. This is a common mistake and it is wise to stick to moderation.
In the case of successful trades, you will bite your elbows and regret that you have used much less capital than you could have. But if you lose, you will feel the effect of these simple rules.
We make money not to increase our deposits, but to achieve our dreams and goals. It is easy to forget this after a profitable trade.
