In this blog you will be able to learn about how to:

• do efficient risk management – on real cases,
• use Palma Virtual Assistant’s features for doing it, and
• what are the coins I am currently following.

NOTICE!

PalmaBot users and Coconut Club members expressed a desire on me writing about my experiences on trading with PalmaVA (Palma Virtual Assistant – ex. PalmaBot). The idea is that I write about what I’ve learned as a trader beginner while testing Palma features. These are my own notes that I have taken while doing it. I must stress out:

• I am NOT a professional trader,
• I am CBDO and Co-founder of Palmatrix, but my priority task is not trading at all,
• ideally, one-third of my life represents spending time with my family (8 hours), while the other third represents work (8 hours),
• I sleep 6 hours per day on average, which gives me 2 more hours per day (24 – 8 – 8 – 6 = 2) to spend on trading or to better put it – testing of PalmaBot chatbot app,
• on the other hand, I am THE TRADER that gets all the new features among the first to try out with real money and this is the primary cause I started trading in October 2017. And later blogging about it.

This time, as already mentioned in the title, I would like to address risk-assessment on 2 of the use-cases that I did while successfully doing profit with PalmaVA:

1. DOT@USDT on Binance, SL=2%, TP=5%: 13 % profit in uptrend
2. ICX@USDT on Binance, SL=1%, TP=3%: 1.24 % profit in downtrend

Risk Assessment NOT applied – what if?!

If you have been learning trading, you definitely have stumbled upon the term “risk assessment”. I remember my beginnings in trading back from 2017 and I must admit that for a long period of time – even though I understood what risk assessment means (I was working on a risk-assessment SW product development for project management in 2016) – I didn’t actually understand how that applies to trading.

How I began to understand that is fairly easy to explain on a trading case. Naturally when it comes to price prediction, we start thinking “to which hight will the price go this time?”, right? But the point is that instead of trying to predict how high it will go, you should take care of “how low will you let the price fall before you exit”. Now, at a first glance this gives you a simple case where you set stop-loss and take profit combination. Right. But if you take a look at the case 1, without risk assessment approach that I will show you further on, I would be doing only 5% profit (that is still OK, but it makes you miss the full opportunity!), whereas in case 2 I would be doing 1% loss due to TP (3%) not reached!

Risk Assessment Applied – Case 1 and 2

The point in applying risk assessment to trading is that instead of setting up SL-TP combination and wait for them to trigger, you can set only SL (stop loss) and then move it together with the price movement.

However, that means there is work to be done while the price is moving. In the picture below you can see that I moved the SL 4 times before it finally got triggered with the profit of 13%! With Palma Virtual Assistant this can be achieved using 2 functions:

• /sl_tp – stop loss take profit where you are able to set SL-TP combination for any trading pair (10.000+) and any supported (40+) exchange (check out /sl_tp in our knowledge base)
• /tss – trail stop sell (this is the automated version of the “moving price window” – and is NOT covered in this article) where you set it once and it will trigger as soon as the price turns downwards for at the pre-set threshold (check out /tss in our knowledge base).

Case 2 is similar to case 1, but in this case it was even more important to do so as the trend was moving downwards and TP was not reached at all which would in my case cause 1% loss. Now, don’t get me wrong, this here I am NOT talking about TP1, TP2, etc. Which is common in signals providing services. This is rather professional approach that demands your presence when doing it. And manually adjust SL as the price moves upwards exiting at the moment the price starts to move downwards more than your strategy allows.

LESSONS LEARNED:
-> Risk Assessment pays off
-> But it requires more work

For more resources, please visit our:
-> Telegram Support Group
-> Youtube Channel
-> Knowledge Base
-> User Guide

Or follow us via our social media – links below in the footer of this website.