Set your position size and loss limits
Start with how much you can lose on a trade, then use your stop-loss distance to work out position size. This guide explains loss limits and money management. Its older binary-options examples use a different payout structure and should not be copied directly into a crypto trading plan.
Smart Options Trading Style
Smart options trading is an investment, not a form of gambling. You can make money here, but discipline and patience are mandatory throughout the trading day.
With our plan to protect your money, you invest a certain percentage of your capital and aim to stay on a good site where your profits exceed your losses.
Losing your profits and reducing your winning numbers can be a tough game mentally. But the answer always lies in your percentages. The numbers tell us if we have a winning strategy for the current market conditions. The high returns are teasing; therefore, using a small limit for maximum success is even more important. Many brokers are suggesting 10% of your capital, but you can’t just say it like that. Inexperienced traders will lose their shit quickly.
Money Management Plan: The Right Way
You need a money management plan for your trading strategy without constantly risking your account. In addition to the rules below, it’s important to put a stop-loss in place. For beginners, something like 5 winners and 2 losing trades is a well-balanced way to trade. The trading amount is crucial to making everything work.
Don’t worry—we’ve got you covered. Save, print, and laminate this money management cheat sheet. Then glue it on your desk and follow.
Oh – and if you decide to stay without any money management rules, we have the right song for you:
Money Management the Nerd Way
| Week | Earnings (€) |
|---|---|
| 1st week | 250.00 |
| 2nd week | 308.40 |
| 3rd week | 339.17 |
| 4th week | 374.20 |
| 5th week | 484.51 |
| 6th week | 565.92 |
| 7th week | 665.92 |
| 8th week | 703.54 |
| 9th week | 935.56 |
| 10th week | 1069.90 |
| 11th week | 1276.17 |
| 12th week | 1565.07 |
| 13th week | 1894.87 |
| 14th week | 1996.50 |
| 15th week | 2289.22 |
| 16th week | 2480.36 |
| 17th week | 2760.88 |
| 18th week | 3371.56 |
| 19th week | 3561.39 |
A Money Management System built per asymmetrical exponential growth projections
There is no quicker way to blow your account than through bad money management. The volume of your trades must correlate to the size of your account. This ruleset is a scientifically proven way to manage money that helps you get through stormy weather without going bankrupt. We provide the roadmap, so you must stay on the route.
Account Balance Levels:
| LEVEL | TRADE SIZE | BANK |
|---|---|---|
| Level 1 | $1 to $2 | |
| Level 2 | $2 to $4 | |
| Level 3 | $4 to $8 | 25% |
| Level 4 | $8 to $16 | |
| Level 5 | $16 to $32 | |
| Level 6 | $32 to $64 | 25% |
| Level 7 | $64 to $128 | |
| Level 8 | $128 to $256 | |
| Level 9 | $256 to $512 | 25% |
| Level 10 | $512 to $1,024 |
The Ruleset
- 1) Every three levels up, you can remove 25% and return 50% of the previous level.
- 2) You can trade 50% of the size at any one level if you don’t like the market conditions or trade.
- 3) You can trade 50% of the size till you pass. 50% or the halfway mark to the next level.
Example:
You can change the levels to fit a percentage per trade. For example, instead of $25 trading 1-2 a trade, you can change that to maybe $50 or even $100 if you want to be conservative.
The Final Words
If you lose a level, that’s okay. You trade back 50% of the prior; you can double on each level if you advance. The win rates depend on the stake size, so if you are starting and the win rates are low, use 1-2% a trade. If you are more experienced, use 2-4%. Most likely, a 5% cap is reasonable. The main point is to be disciplined and follow a plan that uses money management and learning to trade levels like a video game. If you need help with your trading strategy, join one of our best-performing Telegram crypto signals groups and learn from the best.