Bitcoin traders constantly search for profitable opportunities in the crypto space. However, trading risks may not leave your table.

When it comes to successful bitcoin trading, risk management plays a critical role. Regardless of how effective you set up the trade, there’s no 100% guarantee that you will succeed. After all, trading bitcoin is surrounded by risks.

Traders might take a hit every now and then. On the other hand, effective risk management strategies should be one of your priorities if you want to stay in the game for a long time.

Bitcoin trading always comes with risks. But, don’t worry, there are easy steps on how you can minimize these risks.

1. Do You Extensive Research 

Do extensive research and learn all it takes before choosing particular bitcoin services. It’s true that it listening to people’s noises will help you nothing, but it is also essential that you have an awareness of what’s happening in the bitcoin space.

You need to figure out what you should take in and what you should dismiss. Getting factual bitcoin information is a trading advantage. Meanwhile, for a reliable automated trading system, please visit

2. Reduce Counterparty Risks

While the crypto market comes with several highest percentage gains, problems are still there. Besides, exchanges have a counterparty risk degree. 

Mind that transacting bitcoins comes with an irreversible process. So, exchange along with your private keys can be risky. Be aware that there are many cases of hacked crypto exchanges, and you could lose a huge amount of money.

You may not entirely eradicate counterparty risks, but you can reduce them. You can do it by not leaving your coins on the exchange if you are not actively trading. Ensure that you are only trading with 20-30% of the portfolio. Doing a research about the exchange will help in ensuring a solid reputation. Then, diversifying the coins among several exchanges will also help. 

3. Evaluate the Market Trend 

Bitcoin trading risks do not include insecurities alone. You are also vulnerable to making losses. In case you completely rely on the crypto’s unit price, there’s a big chance that you will end up with disappointments.

Instead, ensure to understand the bitcoin currency growth to get to know about the trading trend. Familiarize yourself with the market capitalization so that you can predict the potential challenges, possibilities, and impossibilities. 

4. Trade Quality Rather Than Quantity 

Overtrading will only waste your time and money in the end. If you want to have effective trading, it’s important to choose quality rather than quantity. Be aware that no all market conditions will contribute to your strategy.

For instance, automated scalping works bests during a stable market, while swing trading tends to be more effective with strong trends. Ensure to figure out the bitcoin trading style that works best for you first to determine the quality trends. Besides, determining the right market conditions is also an advantage.

5. Do Not Attempt Using Too Much Leverage 

Most of the time, bitcoin traders use margin because they believe that it with increase the order size. However, using too excessive leverage will leave your traders with no enough time to breathe. Not only that, there’s a big chance that you will lose the whole principle when forced liquidation came.

You may find several exchanges that come with x100 leverage. However, even a 1% move against can already destroy your account. The safer approach is to use x100 leverage. It will not only increase your gains, but you will also get enough opportunity to exit any bad trade.


While bitcoin trading is profitable, it does not guarantee excellent results. As a trader, you can expect upsides and downsides and risky situations. The good thing is that you can minimize these risks.