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RE: How I made $2000 trading Bitcoin in three weeks (and I am just an 'average gal in NZ')
Stop losses are great. Also - I invest x amount and then be sure to withdraw that in profits so that I lose nothing financially before placing a risky trade...
Having said that I am a complete novice and you may have better advice - feel free to share it.
Are your stops a certain % of your overall account?
Do you risk less than you are targeting per trade?
If I trade anything other than Bitcoin, yes I set percentages. When it comes to Bitcoin - I take larger risks...let's be honest - it is so volatile that you could be WAY in the red one evening and in the green 12 hours later and stop losses may just lose you money. My secret is investing small amounts of cash...and again, I withdraw what I invest the minute I make $ so that there's no risk. I lose nothing.
Well yes, a stop loss is there to lock in a loss. But the idea is that by locking in a los early when you know you are wrong, that it doesn't get out of control and just 1 bad trade wipes out your entire account.
I can see what you're saying that volatility can mean you'd get stopped out when it's just a whipsaw and the market then goes you way, but without one, what's to stop the market just continuing to go against you? Managing your risk to the downside for that 'what if' bad trade is KEY.
I certainly agree :-) With most trades I set the losses tightly...with BITCOIN I am more liberal...