Rewrite the video title ‘Crypto Risk Management Strategy That Will Make You Rich
Write a 1000-word comprehensive and engaging article from the script hello guys and welcome to crypto tech today i’m going to show you a money management strategy that will potentially make you a ton of money and i’m going to explain to you why this strategy is far more better than the 95 of the people strategy that everyone is talking about so make sure you stick around till the end of this video and let’s get started okay so we’re currently looking at the price of cut down the usd for our chart and here’s the current price sitting out to around 9094 74 so we have this indicator on our chart this is a ssl channel and here are the inputs all right so the way this indicator works is whenever you see this these lines crossing each other and the red is above the green one this is a short signal and same works for a bullish trend the green is above the red one this is a bullish signal okay now let’s just take a look at this signal right here this indicator tells us that this price at 1.0701 this is the best price to enter a short position what would the majority of traders do in this case even if they had this indicator in place or if they didn’t have this indicator they would just draw some support and resistance lines and they would figure out this entry somehow but let’s say here’s the entry where would they put their stop loss they would probably draw a resistance line somewhere here and this is the area where they would put their stop loss at and let’s just take a look at the price range and that is roughly 40 40 pips away or 3.83 loss in case if the price moves against them so now let’s take a look at where the take profit level is going to be at so normally they what they would do they would put two to one ratio so that’s going to be at roughly 80. okay so here’s the take profit level everything looks logical two to one ratio everyone is talking about this so you might as well probably use it however there is a problem with this strategy what happens if the price for example keeps moving in your favor you just capped your profit and now the price is moving in your favor what happens if the price you entered somewhere here the price for example went all the way down here and then you had a pullback and the price hit your stop-loss now you lost a trade even though you were winning that’s why the number one rule in trading if you really want to make some good money you not just want to be a break-even trader or a losing trader what you want to do is you want to let your winners ride you want to cut your losses as soon as possible and you want to let your winners ride so now let me show you a different approach let’s just get rid of these okay first of all we’re gonna place our stop loss based on this indicator average true range so what this indicator does it takes into account the last 14 uh time periods and it calculates the average length of a time period of the candlestick this is a very important indicator because it because it shows you the volatility of the market so the current value sits at 0.0033 so if we take a look at the price range of the average candlestick so it’s sitting at a 0.037 so this is pretty much an average length of a candlestick that happened during this time period so now let’s take a look at the value of the atr whenever we enter the trade right there so it sits at around 8.025 so we want to keep this number in mind because we’re going to use this atr in order to figure out our stop loss level so now what we want to do is we want to put our stop loss at 1.5 value of the atr so in that case if it’s 25.025 that’s going to be 8.0 38 roughly so it’s going to be somewhere here okay so this is our stop loss okay so we enter the trade we set our stop loss at 1.5 value of the atr now we wait now we wait until the actual price moves in our favor and hits the two values of the atr so in that case that will be so let’s have a look 25 times 2 that is 50. okay so 50 is two values of the atr let’s just make a note and write down all these numbers so you don’t get confused what we need to do is we need to write down three numbers what is the value of 0.5 atr so our atr is at let’s say 25 0.5 value that’s going to be 0.013 1.5 atr which is our stop loss is at a point oh 37. just like we said now we need to know the two atr value and that is so if the ati is 25 280r value that’s going to be 50. 8.0 50. okay so we have our notes here this is a 2 atr value here’s the price before entering the trade you need to set yourself an alert so that you know when the price actually hits this two value of the atr this is very important because at this point what you want to do is you want to move your stop loss from here from 1.5 atr from this distance between the entry price and the stop loss you want to place it all the way down here so that the distance between the current price and your stop loss is exactly 1.5 value of the atr which in that case we need to put this distance as 0.5 atr that is 13. i hope this makes sense so now we have our stop-loss moved and we’re pretty much playing with our profits we’re not losing anything now if the price for example moves against us and hits our stop loss we’re still going to be in win of 8.5 atr or 1.27 of gains we’re not losing anything at this point so now this is very important what you want to do is you want to scale out every time the price moves lower in your favor you want to adjust your stop loss so it’s like a trailing stop-loss so for example here the price moves against you you do not want to change your stop-loss you just leave it there the price moves against you there you go it didn’t hit your stop-loss it didn’t hit your stop-loss because the stop-loss is all the way up here moves against you and then boom it’s right here pretty much at the same level where it was and then next candlestick boom it drops all the way down here so now what you want to do is you want to calculate the distance between the current price and your stop loss so that is exactly 1.5 atr this is how you scale in so now the distance is i don’t know exactly but if you take this number right here 65 minus this number 37 1.5 atr that’s roughly going to be at 28 i reckon yeah 28 so let’s move our stop loss all the way down to 28. so now we have exactly 1.5 atr the distance between our current price and the stop loss so now you have a bigger win right here see that’s how you scale in and the price moves moves again you adjust the atr right here again and now it moves against you and then boom this big drop happen so what you want to do you want to adjust your stop loss again so it’s at 86 so 86 minus 37 that’s gonna be 49. that’s 49 there we go so now you have 4.67 gains this is your profit pretty much and now you’re playing with your your profits at this point so the price obviously does a retraction it didn’t it doesn’t hit your stop loss as you can see there’s still plenty of room you want to make sure that there is plenty of room that’s why you need to put a 1.5 atr as your stop loss so you you let the trade you let the price breathe and now what happens here boom drops all the way down to 0.97 now 97 minus 37 that is 60. move your stop loss all the way down to here 60 and so on and so on now for example it dropped all the way down here yeah you kept adjusting it you kept adjusting it and by the way you need to adjust your stop loss every time there is a new candlestick so if it at the moment we have a four hour chart so if you trading four hour chart every four hour you need to adjust your stop loss if the price moves in your favor that’s how you scale in and there we go now we’re sitting at 138 minus 8.0 37 and that is roughly 100 pips in our pocket there we go so of course we’re gonna have this retraction and the price eventually hits our stop loss but we made all this win right here so let’s get rid of this so now you see we gained nine percent nine point forty five percent on this trade so now let’s take a look one more time at that two to one ratio that everyone is talking about so if you had entered somewhere here there’s a stop loss at 40 and at a profit would be somewhere at 80. so there we go 7.43 gains if the price hits your take profit level it doesn’t go back it doesn’t uh retract and hits your stop-loss comparing to 9.45 guaranteed gains these gains are guaranteed if the price keeps moving in your favor these gains are guaranteed these gains are not guaranteed so let’s for example take this elliot impulse wave and see okay so this is the entry price here’s the take profit level obviously you weren’t adjusting the stop loss you just kept your stop loss right there you didn’t move it and you just waited until your price hits the take profit level okay so let’s just assume it didn’t let’s assume the price went all the way down here close to your take profit level and it reversed yep one two three and it hits your stop loss so now you had a winning trade that actually like went in your favor but because you are really bad at money management this is what happened the price hit your stop-loss so i hope this video was really helpful to you and if you want to see more videos like this please subscribe to the channel and see you in the next video that includes best strategy for trading crypto. 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I've been studying trading for a couple of years and I think this is one of the most important things, more than any strategy, learning to manage the risk reward, keep it up with your videos!
Excellent concept! Really a game changer!
what time frame you use for this sort of trade? It seems swing and not scalping. But can you potentially use a 5/15 min candle ?
Merci . Je vais mettre en application dès à présent. J'apprécie beaucoup vos vidéos.
nice
whew
ATR is changing, should we recalculate using the value of ATR of the current candle instead of a fixed number?
Good tutorial. If I open a trade for futures trading on a cross or isolated margins , does a 1 or 2 percent stop loss make a difference??
I'm really bad ay money management. like awful. this is going to help. I promised myself I wouldn't add or use anymore indicators (I already use ATR) but this SSL thing….. man. why??? LOLOLOL
Hello, what did you do to get the 0.5 ATR which you said is 0.013? Plus how did you do to get the 1.5 ATR which is 0.037?
ATR Bands in TradingView will automatically trail atr for you.
Do you know what's you doing? 😅 Really
See guys it's easy, see you all next year at the Bahamas
How do you know how percentage of your crypto you need to sell after each drop in price?
What if I missed a couple of candles (do I then count from the entrance or from that first candle that the indicator shows us). By the way, I did a lot of research on the internet, but I haven't found such good information yet, thanks for sharing this with us.
Thanks man! What if the ATR changes drastically? Do you change the calculation or stick to the entry ATR?