Protect your capital and maximize longevity with proper risk management strategies.
Risk management is the difference between long-term success and blowing up your account. In crypto's volatile markets, proper risk controls protect your capital during drawdowns and ensure you survive to profit from recoveries.
Never risk more than you can afford to lose. Crypto is highly volatile. Only invest money you won't need for 1-5 years and can emotionally handle losing.
Never risk more than 1-2% of your total capital on a single trade or bot. This ensures you can survive 50+ consecutive losses before depleting your account.
| Total Capital | 1% Risk Per Trade | 2% Risk Per Trade | Max Consecutive Losses |
|---|---|---|---|
| $1,000 | $10 | $20 | 50-100 |
| $5,000 | $50 | $100 | 50-100 |
| $10,000 | $100 | $200 | 50-100 |
| $50,000 | $500 | $1,000 | 50-100 |
Invest same dollar amount per bot (e.g., $100 per bot)
Invest fixed % of capital per bot (e.g., 5% per bot)
Mathematical formula: (Win Rate × Avg Win - Loss Rate × Avg Loss) / Avg Win
| Risk Tolerance | Conservative | Moderate | Aggressive |
|---|---|---|---|
| % in Crypto | 5-10% | 10-25% | 25-50% |
| % in Trading Bots | 20-30% | 30-50% | 50-70% |
| % Per Bot | 5-10% | 10-20% | 20-30% |
| Max Bots Running | 3-5 | 5-10 | 10-25 |
Exit if position drops X% (e.g., stop at -20%)
Limit Martingale to 5-10 levels, exit beyond that
Close position if unrealized loss lasts X days
Pause all bots if total account drops X% from peak
For Martingale/Grid bots: Set max 10 grid levels with 2x multiplier. This limits max loss to ~20-30% of bot capital while allowing recovery from normal volatility.
Target at least 2:1 risk-reward ratio (risk $1 to make $2)
| Win Rate | Min R:R Needed | Example |
|---|---|---|
| 30% | 3:1 | Risk $100 to make $300 |
| 40% | 2:1 | Risk $100 to make $200 |
| 50% | 1:1 | Risk $100 to make $100 |
| 60% | 1:1.5 | Risk $100 to make $150 |