The key to successful money management is maximizing every winning trades and minimizing losses.

As a trader, you should divide your capital into certain assets and diversify your portfolio after analyzing the underlying asset. Responsible working method results positive results and high confidence for your future trades.

Traders need to remain focused on learning more each day. Since many concepts carry prerequisite knowledge, it is important to remember that understanding the markets, and all of their intricacies, is an ongoing, lifelong process.

Cut losses and let profits ride

The basic failing of most traders are that they put a limit on their profits and no limit on their losses. Traders hate to admit their wrong. Therefore, an individual will often let their loss ride, becoming larger and larger in hope that eventually the market will turn around and prove they’re correct.

Then after a while, they begin hoping for a small loss and gives up hoping for a profit. Human nature also dictates that an individual wants to take their profit right away and thus prove they are correct.

Taking a small loss does not necessarily mean a trader was wrong in their thinking. It simply means that their timing was perhaps incorrect and that they should wait for the correct timing and situation to allow them to re-enter the market.

Be aware of the trend

It is vitally important that a trader be aware of a strong force in the market, either bullish or bearish. When this force is at its high, it would be folly to attempt to buck it. However, one must learn to recognize when a trend is about to run its course or is near a period of exhaustion.

By an ability to recognize the early signs of exhaustion, the trader will protect themselves from staying in the market too long and will be able to change direction when the trend changes.

Adopt a definite trading plan

With the emotional stress that is inherent in any speculative situation, a trader must have a predetermined method of operation. This can include a set of rules by which a trader operates and adheres to.

Quite often, emotions will cause a trader to do something totally foreign or negative to what their market trading plan should be. It is only by adhering to a preconceived formula that a trader can resist the emotional temptations and stresses that are constantly present in a speculative situation.

Treat Trading Like a Business

In order to be successful, one must approach trading as a full- or part-time business - not as a hobby or a job. As a hobby, where no real commitment to learning is made, trading can be very expensive.

As a job it can be frustrating since there is no regular paycheck. Trading is a business, and incurs expenses, losses, taxes, uncertainty, stress and risk. As a trader, you are essentially a small business owner, and must do your research and strategize to maximize your business's potential.

Use Technology to Your Advantage

Trading is a competitive business, and one can assume the person sitting on the other side of a trade is taking full advantage of technology. Charting platforms allow traders an infinite variety of methods for viewing and analyzing the markets.

Back testing an idea on historical data prior to risking any cash can save a trading account, not to mention stress and frustration. Getting market updates with smartphones allows us to monitor trades virtually anywhere.

Even technology that today we take for granted, like high-speed internet connections, can greatly increase trading performance. Using technology to your advantage, and keeping current with available technological advances, can be fun and rewarding in trading.

Become a Student of the Markets

Think of it as continuing education - traders need to remain focused on learning more each day. Since many concepts carry prerequisite knowledge, it is important to remember that understanding the markets, and all of their intricacies, is an ongoing, lifelong process.

Hard research allows traders to learn the facts, like what the different economic reports mean. Focus and observation allow traders to gain instinct and learn the nuances; this is what helps traders understand how those economic reports affect the market they are trading.

World politics, events, economies - even the weather - all have an impact on the markets. The market environment is dynamic. The more traders understand the past

And current markets, the better prepared they will be to face the future.

Patience is rewarded

It pays to be patient. Profitable traders wait for the perfect trade setup. Many traders who do not consistently make money, trade for the sake of trading, and those traders are missing the opportunity of gaining some big profits.

A lot of them looks at the markets and ask themselves “which way is the Pound going to go?” Instead of looking at the markets and say “Is there a trade we must take right now?”

Once you will learn to control the timing, your trading account will grow accordingly.

Risk Management

It’s easy to sit and say to yourself…self, I have a good risk management system and I will be profitable over the long term. It’s much harder to actually use it.

It takes serious will power and self-control to properly utilize a good risk management system. Every single trade has to be made according to your rules.

When there is no signal or no room in the account for another trade you have to be able to walk away. At the same time when you are riding the high of profits you have to be able to stick to the rules as well. In between, when you get bored, you have to stick to the rules.

Risk management is important for many reasons but one is first and foremost. You have to be able to manage risk or you will get wiped out. If you get wiped out you can’t trade and when you can’t trade there is no chance of your account getting larger.

Risk management is hard to follow but remember that it is better to be able to make a small trade than no trade at all.

Apply Risk Management To crypto trading

It is easy to apply risk management to crypto trading. The predetermined risk make it simple to position size.

All you have to do is to multiply your account by the percentage you want to risk. Assuming you have a $1000 account and you want to risk 10% (most common), you will do this:

$1000 * 10% = ($1000*10)/100 = $100

In other words, you will open your trade with $100 and that’s the amount you will risk if the worst case scenario occurs. You may change the risk percentage according to the different strategies you are using.

After that, it comes down to your analysis and strategy, just like any other form of trading. Crypto trading requires proper risk management and full attention just like any other financial instrument.

Think about tomorrow

Most traders find it very hard to stop trading, even if they have other important things to do or just feeling tired. As much as it’s hard to just stop trading suddenly, it’s necessary.

Not stopping trading is nothing but a receipt to self-destruction. Nevertheless, there is one way of keeping trading without trading – thinking about tomorrow’s trading! After your trading hours are through, take a deep breath, empty your mind for 5 minutes.

Write down the hours and expected effect of these possible trades; make yourself a list of opportunities. Take that list with you; carry it on you for the rest of the day. Whenever you sit on your computer, see if there’s anything about it. Then, when the trading window opens, you’re already equipped with enough information to make the right choice.

Some traders take up to an hour reviewing financial news, some 15 minutes, it’s up to you. Don’t forget to include this time on your total trading hours.

Release your thoughts of today’s trading and start thinking about tomorrow. Check out financial news, try to expect future breakthroughs, special events, look for anything that might be your next day’s opportunities.