How to minimize your losses when closing unprofitable trades

In this article, we will talk about how you can get out of losing trades in the cryptocurrency space with the help of effective and powerful strategies. The tips below will help you not only get out of financial crises, but also deal with stress. And to be in complete moral balance in this case is very important.

Remember how Bitcoin took part in a rally from October to December 2017, during which the cryptocurrency set new price highs? Thanks to this, it was possible to enter the trade without much risk. On December 18, a peak was formed, after which a future breakout was possible.

The main prerequisites for a purchase can be safely attributed to:

• Continuous sequence of increasing minimum and maximum trend indicators.
• After all the corrections that have taken place, the price has touched the line of the desired trend. After that, she immediately bounced back.
• The day after entering, bitcoin rose tremendously. The indicator increased by $ 2,000. Since the price dropped on December 19 of the previous year, the cryptocurrency was closed significantly below the established trend line.

In order to exit the position with the desired profit safely, the trader must constantly monitor the above signals. Even in those cases, if the trader simply closed the position after the line went down, he would be able to minimize possible financial losses.

It should be remembered that one of the most effective signals for trend indicators, which every trader will certainly encounter, is the breaking of the trend line. This line is long-term. In such a situation, the market more than understandably lets you know that the preconditions of the position are no longer valid, so you should close it as quickly as possible in order to avoid unnecessary losses.

The most important findings:

• The trends that have already formed can very often become the most powerful resistance or, conversely, become significant support.
• If the price closes above or below the trend line, this indicates the end of the trend that existed before. Accordingly, the market will move in the opposite direction.
• At the slightest sign of completion of a certain trend, you should immediately close the position, otherwise, unfortunately, you can incur significant losses.

Exit while reaching the primary level (“stop level”)

For all those who want to make money on cryptocurrency, trading is especially popular, which is carried out on the contrary — against the trend. As a rule, while following this strategy, the possible gains are almost equal to the possible losses. Simply put, the risk is 50/50. Therefore, in this situation, it is very important that the profit-to-loss ratio reaches over 70%.

The deal may fail from the very beginning, in which case it will lead to a loss (albeit a small one). You should pay attention to the fact that the exit at the stop level must be carried out before the candle closes. During this original type of trading, it is quite important to exit the position on time. You should not expect the candle to close in 24 hours. This method will effectively help if the price moves in a direction unfavorable for you throughout the day.

You should not count on the fact that a deliberately unprofitable trade will instantly turn into a profitable one. It is best to fix the existing losses at the level that the strategy provides. This will not only save capital, but also maximum peace of mind.

The most important findings:

• Of course, when trading against the trend, you should constantly monitor the level of losses.
• It is always necessary to set the initial stop level.
• At the set level, you need to fix your loss.
• Observe the specified stop level at all times, because small losses can turn into huge losses very quickly.

Exit after a certain amount of time has passed

Every trader, in any case, has a situation when his coin stops moving. Simply put, it simply freezes at the level without any prospects for further movement. If the profit target has not been achieved, what to do in this case?

In order to try to solve this problem, you need to use a temporary stop level. The past price increases should be accurately analyzed and the next breakout can be predicted. For example, if the duration of the consolidation is 12 days, then at the end of the 13th day, you can close the position. What will it give? The trader will be able to free up his capital and, accordingly, invest it in a more profitable direction.

The most important findings:

• Even the best trading signal may not work at all.
• If you see that for a long period of time, the trade has no signs of life, then you should close it immediately.

If you want to exit an obviously unprofitable deal painlessly and quickly enough, we recommend using the strategies listed above. Which one to choose is up to you. But remember, a different kind of strategy works in every situation.

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