Book Image

Zero to Hero in Cryptocurrency Trading

By : Bogdan Vaida
Book Image

Zero to Hero in Cryptocurrency Trading

By: Bogdan Vaida

Overview of this book

In today's fast-paced digital age, cryptocurrencies have emerged as a revolutionary financial asset class, capturing the attention of investors and traders worldwide. However, navigating the world of cryptocurrency trading can be overwhelming for beginners. Zero to Hero in Cryptocurrency Trading acts as a guiding light to navigate this complex realm. This comprehensive guide to cryptocurrency trading empowers you to go from a novice trader to a proficient investor by helping you implement your own trading strategy. As you progress, you’ll gain structured trading knowledge through hands-on examples and real-time scenarios, bolstered by trading psychology and money management techniques. You’ll be able to automate your manual trades with an algorithm that works even while you sleep. You’ll also benefit from interactive teaching methods, including screenshots, charts, and drawings to help decode market operations and craft your unique edge in the dynamic crypto world. As an added bonus, you’ll receive ready-to-use templates to identify useful indicators, test your strategy, and even maintain a trading journal. By the end of this book, you’ll be well-equipped to trade cryptocurrencies and automate manual trading to give you an edge in the markets.
Table of Contents (13 chapters)
9
Chapter 9: What’s Next?

Position sizing

In trading, we always want to increase returns and reduce risk, so we need to understand how much money to put in our trades in order to have a good risk/reward balance.

Figure 6.2 – Position sizing

Figure 6.2 – Position sizing

There are various position sizing methods such as YOLO (no method); (addictive) gambling, also called emotion-driven trading; fixed-size (0.05 BTC for each trade); fixed-value ($1,000 for each trade); a fixed amount of equity; a percent of equity; percent volatility; the Kelly formula; the max drawdown method; fixed risk/fixed fractional; the profit-risk method; margin target; leverage target; optimal f; and more.

I’m going to present to you two of those methods. I’ve used both at various times.

Method 1 – percent of equity (variation)

With the percent of equity method, you make sure that the value of your position is equal to your chosen percent of account equity. I’ve fine-tuned this method to crypto...