# How To Calculate Risk/Reward To Trade & Invest In Crypto Market

Education
BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Hi everyone:

Today I want to make this educational video on how to calculate your risk/reward in trading and investing in the cryptocurrency market.

Many newcomers in the industry are not aware of the importance of risk management. So today let's give out different examples of them on how to properly calculate the \$, %, and setting the SL/TP.

This video is intended to help traders and investors to understand how to calculate the amount to risk per trade, or per investment purpose.
I will give different examples of going long and short in trading, as well as buying coins for the purpose of investment.
Doesn't matter what crypto broker exchange you use, this calculation/formula will work, you will just need to do some simple math to get to the right numbers.

Example 1:
Want to go long on BTC in a trade

Scenario:
Want to go long on BTC when price hits \$70,000
You want the Stop Loss @\$66,000,
and a TP @ \$80,000

Calculation:
\$12,000 Account x 0. 01 \$120 per trade
Divide the \$ you willing to risk to the SL amount
\$120 / \$4000 = 0.03

Set your entry order or market order
for 0.03 BTC @ \$70,000 price
0.03 x \$70,000 = \$2,100
to execute this position.
If you have leverage then its less \$ needed)

0.03 BTC x \$66,000 = \$1,980
\$2,100 - 1,980 = \$120 = 1% of your account

0.03 BTC x \$80,000 = \$2,400
\$2,400 - \$2,100 = \$300 = 2.5% of your account

Example 2:

Scenario:
Want to go long on ADA when price hits \$2.30
You want the Stop Loss @1.70

Calculation:
\$800 Account x 0. 01 = \$8 per trade
Divide the \$ you willing to risk to the SL
\$8 / \$0.60 = 13.34

Set your entry order or market order
for 13.34 ADA @ 2.30 price
13.34 x 2.30 = \$30.68
to execute this position.
If you have leverage then its less \$ needed)

13.34 ADA x \$1.70 = \$22.68
\$30.68 - \$22.68 = \$8 = 1% of your account

13.34 ADA x \$4.00 = \$53.36
\$53.36 - \$30.68 = \$22.68 = 2.83% of your account

Example 3:
Want to go short on TRX in a trade

Scenario:
Want to go short on TRX when price hits \$0.11
You want the Stop Loss @ \$0.13

Calculation:
\$54,000 Account x 0.0150 = \$810 per trade
Divide the \$ you willing to risk to the SL
\$810 / \$0.02 = 40 ,500

Set your entry order or market order
for 40 ,500 TRX @ 0.11 price
40 ,500 x 0.11 = \$4,455
to execute this position.
If you have leverage then its less \$ needed)

40 ,500 TRX x \$0.13 = 5,265
\$5265 - \$4455 = \$810 = 1.5% of your account

40 ,500 TRX x \$0.07 = \$2,835
\$4,455 - \$2,835 = \$1,620 = 2% of your account

Example 4:
Want to buy ETH to hold for long term as investment

Scenario:
Investing Account \$20,000
Risk 10% of your investing account
Want to buy ETH to hold for long terms
Want to enter when price hits \$4,900

Calculation:
Calculate your 10% of the investing account:
\$20,000 Account x 0.10 = \$2,000 per investment
Divide the \$ you willing to risk to the price you want to enter
\$2,000 / \$4,900 = 0.4082

Set your entry order or market order
for 0.4082 ETH @ \$4,900 price
0.4082 x \$4,900 = \$2000
(This is the amount you will need in your investing account

You want to lose no more than 25% of your original \$2,000 investment.
\$2,000 x 0.75 = \$1,500
\$1,500 / 0.4082 = \$3,674.67
0.4082 ETH x \$3,674.679 = \$1500
\$2,000 - \$1500 = \$500 = 25% of \$2,000

You want to gain about 50% of your original investment before selling.
\$2,000 x 1.50 = \$3,000
\$3,000 / 0.4082 = \$7,349.34
0.4082 ETH x \$7,349.34 = 3,000.00
\$3,000 - \$2,000 = \$1,000 = 50% of \$2,000

Example 5:
Want to buy MATIC to hold for long term as investment

Scenario:
Investing Account \$1,500
Risk 20% of your investing account
Want to buy MATIC to hold for long terms
Want to enter when price hits \$2.25

Calculation:
Calculate your 20% of the investing account:
\$1,500 Account x 0.20 = \$300 per investment
Divide the \$ you willing to risk to the price you want to enter
\$300 / \$2.25 = 133.34 MATIC

Set your entry order or market order
for 133.34 MATIC @ \$2.25 price
133.34 x \$2.25 = \$300
(This is the amount you will need in your investing account

You want to lose no more than 50% of your original \$300 investment.
\$300 x 0.50 = \$150
\$150 / 133.34 = \$1.1249
133.34 MATIC x \$1.1249 = \$149.99
\$300 - \$149.99 = \$150. 01 = 50% of \$300

You want to gain about 75% of your original investment before selling.
\$300 x 1.75 = \$525
\$525/133.34 = \$3.9373
133.34 MATIC x \$3.9373 = \$525
525 - \$300 = \$225 = 75% of \$300

Any questions, comments and feedback welcome to let me know.

If you like more of these contents, like, subscribe/follow and comment for me to keep doing them. :)

Jojo

Free Price Action Workshop Videos (Impulse & Correction): https://bit.ly/3zpZ2BL
Free Telegram Channel (Forecast, Analysis, Updates, Live Stream, Lessons, Q/A): https://bit.ly/3kllWnV