This might seem like a no-brainer but Money Management is crucial for trading Crypto Currencies. It is they key for your survival and a rule you should always implement in your trading so your account doesn’t take big drawbacks when you make a couple of loses. Money Management is simply handling your money in an a way it can be strategically used and organized. That been said, you should only invest a specific amount of capital in your trades to control your profits and losses. Most traders say that you should invest from 5 to 10 % of your account balance, the reason why they claim that is due to the reason that losing trades will happen and if you don’t invest wisely in each trade, you will most likely empty your account sooner or later!!
In order to earn 3 to 5 thousand dollars a month with a 100 dollar account requires a very strict Money Management strategy. The strategy we use to achieve that financial goal is by slowly raising that 100 dollars each day until your account grows large enough to invest more and the final result will be reaching a higher account balance in a shorter period of time. We advise traders to raise their trade amount each time you double your account by 500%.
For example, if you build your account from 100 to 500 dollars, that means it’s large enough to take bigger trades than 10 dollars, you would now invest 25 dollars (5%) in each trade until you expand the account to next level which should be 1,000 dollars. Once you reached that level, invest 50 dollars per trade which is still 5% of you account balance. Just repeat the pattern until your satisfied with your results. If you want a more organize method to keep track of all of your trade history, We recommend to elaborate an Excel document and write everything down in it.Money Management
We recognize that 5% is very limited but you have to realize that when it comes to Crypto trading, there will be times you’ll get out of the money trades. That’s why your account must be protected with proper Money Management tactics to avoid heavy losses. Of course you can change the amount per trade if you decide to but remember and ask yourself if you are skillful enough to generate sufficient in the money trades to convert investing like an everyday task. It also depends on how much you fund your account, if you are currently on a tight budget, then go with the 100 dollar account and invest 5% of it. Perhaps you are a person who can have extra expenses so go for the 500 dollar account and apply the same rules!!
Don’t forget, it all comes down to how much your willing to make!! A 100 dollar account won’t generate 1000 or 3000 dollars a week!! You must be really experienced to reach that level of expertise. That’s why Money Management should always be implemented to help you get there in a safer path!