What would you involve in a risk management workshop?

[Edgeframe]

Hi,
I'm organising Risk management workshops for beginers, the main topics I'm talking about are:

• The importance of risk management for longevity and success in the crypto space.
• Effective management of liquid assets and adaptation to market changes.
• Formulating a clear and calculated investment plan based on historical data, with critical buy and sell levels.
• Recognizing the right time to cut losses and invalidate trades.

What would you add to this curriculum?

 

[TWI]

Agenda looks good. First point is of course key and cannot be emphasised enough.
Trade sizing is a very important aspect of risk management. Pre-trade analysis should identify and initial stop level and based on how far that is from entry price, determine the stop based on confidence in trade and risk appetite of trader.
Importance of managing the downside, risk management after multiple losses. Even with discipline this will be something everybody must face. To say each trade is a unique event like coin toss is not true in reality.
In crypto also good to discuss keys and how to maintain wallet discipline with discussion of risks of coins on exchange and in soft wallets. Importance of SRP security and 2FA etc.
Discuss margin vs. cash positions and how this changes risk profile. May also want to discuss derivatives and what leverage actually means in reality.
Good luck.

 

[timsk]

. . . To say each trade is a unique event like coin toss is not true in reality. . .

Hi TWI,
Interesting comment, Not sure I fully grasp your point - please expand!
Tim.

 

[TWI]

Hi TWI,
Interesting comment, Not sure I fully grasp your point - please expand!
Tim.

Hi Tim,
Just implying that with each trade you have additional information you did not have at the last decision point. While a coin toss is a random event with two equally likely outcomes, trading involves a much more complex and dynamic set of variables and a system which has an unexpected string of losses accumulated should be de-risked.

 

[Calinor]

I think you are missing the biggest risk of all.

For Crypto the biggest risk is the exchange/broker. It is all well and good managing your risk on a particular trade, but if the exchange goes down or someone runs off with your money, the risk on the trade is irrelevant. These have happened multiple times in the crypto space in recent years with clients losing all or most of their money. Is your money covered in those events? If not...poor risk management from the offset.

 

[Arnav Deshmukh]

Hi,
I'm organising Risk management workshops for beginers, the main topics I'm talking about are:

• The importance of risk management for longevity and success in the crypto space.
• Effective management of liquid assets and adaptation to market changes.
• Formulating a clear and calculated investment plan based on historical data, with critical buy and sell levels.
• Recognizing the right time to cut losses and invalidate trades.

What would you add to this curriculum?

I like add understand the psychological aspects that affect trading decisions, like fear, greed, and confirmation bias.