# The Art of Survival
In crypto trading, making money during a bull run is easy. Keeping that money when the market turns is the hard part.
Many new traders treat the market like a casino, betting their entire account on a single coin. Professional traders, however, focus on one thing above all else: Risk Management.
> "It's not about being right. It's about how much money you make when you're right and how much you lose when you're wrong." — George Soros
## The 3 Golden Rules
### 1. Position Sizing: The 1-2% Rule
Never risk more than 1-2% of your total portfolio on a single trade.
Example:* If you have a $10,000 account, your risk per trade should be $100-$200.
Why?* Even if you lose 10 trades in a row (which happens!), you will only be down 10-20%. You are still in the game.
### 2. Use a Stop-Loss
A Stop-Loss is not just a button; it's your insurance policy. It defines your "invalidation point"—the price where your trade idea is proven wrong.
Don't:* Use mental stops. Emotions will prevent you from selling.
Do:* Set a hard stop-loss immediately after entering a trade.
### 3. Risk/Reward Ratio (R:R)
Always aim for trades with a high R:R ratio, ideally 1:3 or higher.
Risk:* $1
Potential Profit:* $3
If you take 10 trades with a 1:3 ratio and you only win 3 of them (30% win rate):
* Losses: 7 x $1 = -$7
* Wins: 3 x $3 = +$9
Net Profit: +$2*
You can be wrong more often than you are right and still make money!
## The Psychology of Loss
Revenge trading is the fastest way to destroy a portfolio. When you take a big loss, the urge to "win it back" immediately leads to:
* Higher leverage
* Impulsive entries
* Ignoring your plan
The Solution: After a significant loss, walk away from the screen. Take a break. The market will be there tomorrow.
## Leverage: A Double-Edged Sword
Leverage magnifies both gains and losses.
Spot:* If Bitcoin drops 10%, you lose 10%.
10x Leverage: If Bitcoin drops 10%, you lose 100%* (Liquidation).
For beginners, stick to Spot trading or very low leverage (2x-3x) until you have a proven profitable strategy.
## Summary checklist
* [ ] Calculate position size before entering.
* [ ] Set Stop-Loss and Take-Profit targets.
* [ ] Check the Risk/Reward ratio.
* [ ] Accept the risk before clicking "Buy".
Disclaimer: Trading involves significant risk. Never trade with money you cannot afford to lose.