How not to lose money in a falling market?

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The price of bitcoin on December 4 fell by more than 20% per day and for the first time since the end of September fell below $ 42 thousand. This led to a massive liquidation of traders’ positions by $ 2.5 billion. Experts from RBC-Crypto gave recommendations that will help reduce risks in trading cryptocurrency in a period of uncertainty.

Place stop loss orders

In a falling market, one cannot do without such a tool as a stop loss order, noted Mikhail Karkhalev, financial analyst at crypto exchange. He recommended using stop loss orders to protect your funds at all times, regardless of the market situation, since impulsive rollbacks can also occur during a period of active growth.

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According to Karkhalev, stop loss is a flexible tool that allows you not only to limit possible losses, but also to close a position at breakeven or fix part of the profit.

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“Pulling up the stop loss, as the profit on your position grows, will ultimately allow not only limiting the loss, but even fixing the profit in any case,” the analyst added.

Analyze the reasons for the rise and fall

When the market is unstable, one cannot succumb to momentary emotions, says Andrey Podolyan, CEO of Cryptorg. According to him, now it is such a situation when it is better to leave the market for a while. You can start thinking about deals when bitcoin has a good level of support, Podolyan said.

“Further, price consolidation and good accumulation should take place. Only then can you start thinking about shopping, ”the expert explained.

Now it is not worth opening new positions, because after the collapse of bitcoin to $ 42 thousand and its consolidation above $ 50 thousand, the risk of another wave of decline remains, Podolyan says. According to him, the accumulation period under current conditions may last for about a month.

Reduce the risk factor

The current phase of the market is characterized by high volatility, which increases the risk of losing funds, explained the head of the analytical department at AMarkets Artem Deev. In his opinion, it is still difficult to predict when this period will end.

In order to wait out the period of instability with the least losses, it is worth reducing investments in crypto assets, leaving positions only in the largest digital coins, such as Bitcoin and Ethereum, the analyst said. With a more conservative approach, the share of cryptocurrencies should be reduced to 10-15% of the entire investment portfolio, Deev added. According to him, with stabilization and the appearance of some pronounced trend, it is possible to gradually increase the volume of investments in other digital assets.

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