Risk management on EXEX
Cryptocurrency risk management is a part of cryptocurrency management policy not only for large funds but also for private traders. To avoid the dangers of cryptocurrency, it is necessary to evaluate such an indicator as cryptocurrency risks. What it is, what kinds exist, and what are the low risks of cryptocurrency in our article.
The market is very unpredictable by its nature. Thus, to be ready for unexpected things, risk management should be included. We will go through several factors that you should consider when trading.
The risk management part holds a special place in trading practice. For a proper understanding of the term, we should note that risk management on the Platform implies the correct on-exchange calculation of take-profit and stop-loss ratios to minimize potential losses, as well as insuring your deposits against complete loss of funds in cases of severe market volatility.
Cryptocurrency risk management in the EXEX interface
Let's look at the platform interface's risk management mechanisms. EXEX has three risk levels for each of the open positions: low, medium, and high — "1", "2," and "3" in the figure.
Low level of risk
By opening a position to buy or sell cryptocurrencies and selecting a low level of risk, the system will automatically set take-profit at +25% and stop-loss at -90% relative to the opening price. In this way, you will automatically profit when the price changes in the right direction, and in case of sharp plummet, a stop-loss will be triggered, insuring your deposit against a total loss of funds.
"Low" is defined as the level of risk based on the probability of events — profits or losses. For example, if an RSI indicator signals "Buy" or "Active Buy," the predicted course of events will be an increase in price. Anticipated price growth in the short term is more probable than its fall.
A low-risk trading strategy is great for traders who prefer to make profits often and gradually. The statistical probability of profit while using indicator signals in such trades is about 70%. Also, it should be considered that such transactions are the fastest due to the small step of price for take-profit triggering.
Medium level of risk
Before opening a sell or buy position, select a medium level of risk (#2 in the figure above). In this case, the system will place automatic take-profit at +50% and stop-loss at -90% levels of price change relative to the price of the opening of the position.
Medium-risk trading is the best for traders who have their strategies set up with an equal balance between profits and losses. Statistically, such strategies have a 53% probability of profit when working with RSI indicator signals. Transactions in this risk category are also fast in terms of time.
High level of risk
When opening a buy or sell position with a high level of risk, the take-profit will be set at +100%, and the stop-loss will be -90%.
This level should be chosen if you are confident in your predictions, combined with the indicator signal. This strategy will suit those who are willing to wait out small losses while making much bigger profits. The statistical probability of winning the position remains 36%, but the profits are twice or more times bigger than at other risk levels. Since the step to take profit is twice as big as the step to stop loss, such trades will take slightly longer to execute than "low" and "medium" risk levels.
Other risks in crypto trading
Apart from exchange risk management which is based on tactics to protect funds from losing their balance due to unpredictable currency movements, there are other risks to be aware of and remember when trading cryptocurrencies.
- Fraudsters and hackers: While trading on unprotected marketplaces, you can expose yourself to scammers. One common way to get scammed is to send money to a seller to exchange currency and get nothing in return — the seller either disappears from the site or blocks further communication.
In the case of hackers, there are more ways to steal funds. Hackers can send emails and offer supposedly from your exchange, you follow a link from the email, and the funds from your wallets disappear somewhere. Such hacking tactics are called "fishing", scammers "hook" those who are inexperienced, for example, people who click on the link in the email without checking the sender's address or comparing it to the real address of the exchange.
Hackers also attack exchanges to withdraw funds from users' wallets. As a result of these attacks, poorly protected platforms have already lost hundreds of millions of dollars of their customers' funds.
- Technical issues on exchanges: One of the disadvantages of trading platforms with a weak technical component is the failure of trading systems and their malfunctions. Open positions may disappear, transfers may not reach the receiver, etc. The main way to deal with the consequences of such situations is to go through the KYC procedure when registering on the exchange. Client identification allows the history of client positions and transactions to be verified to return "disappeared" funds to the owner.
Remember, choosing the right platform is the first rule of protecting your deposits. When you choose EXEX, you are sure that it's a truly reliable trading system that provides complete security for all trading processes. Our technology has stood the test of time, improving and evolving in client protection for over 9 years.
The reliability of EXEX technology is proven, and customer safety is one of our most important goals.
The platform offers its clients a unique risk management system. Automatic take-profit and stop-loss combined with indicator readings and your own personal predictions will improve your trading statistics, secure your deposits, and help you adjust your strategy.
Remember, EXEX does not give financial advice. It simply provides the best exchange tools to help users.
The dangers of cryptocurrency await every trader, regardless of their level of knowledge or skill. Both novice and experienced traders must use cryptocurrency management tools to avoid the crypto risks a volatile digital cash system presents. An investor's ability to work and earn without cryptocurrency risk management is limited.