RE: Dynamic Risk Management In Crypto Trading.
It's as if you're just explaining what's happening to me. I bought steem on 3rd January 2025 and steem/usdt was $0.30 at and I bought it at $0.2806 hoping it will rise again without setting a stop loss. Unfortunately for me, the steem drop from $0.277 in which i lost about $3 yesterday. Imagine if I have set a stop loss at $0.279 i wil have been able to withdraw from the trade a small loss.
screen shot showing profit and loss analysis
But along the way, I have been monitoring the market but I decided to place a stop loss and take profit. So I set a limit trade to be sold and take profit at $0.306. Luckily when I was writing this comment, I went to the exchange to take a screenshot but I discovered that steem are increase above $0.306 and my trade was sold at the price i fixed. I made 10 percent from it.
Your post is beneficial to me as I have learned a lot of thing from spreading our portfolio into other asset to minimize loss.
I also learned to always consider the risk factor first before executing any trade. Thank you for sharing your wonderful personal experience. Please do you know how to set up the Bollinger band and TMA?
You are supported by SEA and I checked your comments. You are on the right way. I hope you keep it this way.
Long term investment is the best.
@ wakeupkitty
♥️🍀
Thank you @wakeupkitty for the support. I have learned a lot from you to make valuable and honest comments. I will always continue to do better. Much love 💕
I am glad that you can relate to my personal experience.. the fact that you were able to apply risk management shows that you know the importance of the principles.
Bollinger band consist of three lines which are the middle, lower and upper bands and to set it up, if you are using TradingView site, you can just click on the indicator icon on the top bar of the dashboard and search for it. Then to set it to the coin you want to trade, it involves a simple maths or you can use a python code to set it up if you are good with coding. But then i will just give you the manual setting steps.
First, you need to chose your lookback period, it can be 15-20 days.
Next, you need to calculate your simple moving average (SMA) which is the total sum of the price of your coins over the period you set, divided by the period you set.
Next, you want to compute the standard deviation over the same period you are working with.
Finally, with all you have above, you can calculate your upper and lower bands. Which is:
Upper band = SMA + k x Standard Deviation
Lower band = SMA - k x Standard Deviation
Where k is usually 2.
For TMA, which is triangle moving average is a double smoothed simple moving average. You can set it up same way you searched for the Bollinger bands. The steps setting it up is as follows:
First, calculate the SMA of the price of your coin.
Next, you want to apply another SMA to the result you got from the first step, so that the double smoothing can create the triangular shape.
Lastly, You can now set the period (which is usually odd) to 9 or 21. This helps to center the weights properly.
Inconclusion, You can use both indicators in the same trade, Bollinger bands will assist you to detect the volatility of price of the market while TMA can work as a smoother trend indicator. Overlaying both on your price chart will help analyse trends and possible breakouts.
I hope this was helpful.
This mathematics is hard oo and am confused along the way. Okay let's try this, am using a mex exchange in trading, how would I do the correct set-up? Thank you for taking your time to explain to me. Please it is possible to show it with an image?