Risk action in Bitinsure is one of the powerful tools to improve your trading that makes you comply with your trading system, keep your deposit protected, and control your emotions. And this is what exactly is building your profitability and systemic earnings. In this tutorial, we explain the types of risk action that can be configured at Bitinsure.
Since you connected your exchange account to Bitinsure and customized risk limits (remember that they are set for 24 hours to ensure their strict compliance), you can set the protection for your deposit via the risk action option.
Risk action is the way Bitinsure notifies you and controls your actions in case of your trading risk-limit is reached. The function is developed based on fundamental risk management rules and recommendations.
The risk action type is selected from the Risk action dropdown menu in the window Confirm risk setting that is used for risk limit configuration.
There are three options of risk action aimed to protect your deposit:
None (only notify)
This option implies that if any of your risk limits are reached Bitinsure sends an instant alert to your email or/and Telegram (via Bitinsure telegram bot).
Value. In this case, you do not have to monitor your exchange accounts constantly. Bitinsure will always make you aware if the risk limit is reached. Therefore, you are able to act quickly, according to your trading strategy.
Note! Even though the decision on further actions after getting a notification is up to you, take into account that the decision-making will require more psychological efforts that often appear after a loss, making it difficult to comply with the strategy and analyse actions objectively. That is why it is highly recommended in case of losses in trading to:
- Stop trading. Generally, professional risk management rules imply the optimal pause in trading for at least 24 hours after the risk limit was reached.
- Cut your losses. Close failed position;
- Calm down and analyze the reasons;
- Adjust your strategy.
And this is the reason for other risk action types. The further options help to comply with the risk management rule above without additional efforts required. They work as an automated trader’s discipline.
Lock
This risk action option ensures a package of protective measures that:
- Notifies you in case of the risk limit reached (you are aware);
- Closes the positions at the account where the limit is reached;
- Deactivates the orders at the account where the limit is reached;
- Prevents you from trading at this account for the further 24 hours. To clarify, if you open any position, the system closes it immediately, as well as it deactivates any orders you set.
Value. This option ensures the strict implementation of the risk management rules. In this case, the system cuts your losses and prevents you from any action during a particular period that implies time for trading analysis and psychological recovery.
Hard lock
This is the most powerful option that has one more protection layer that acts not only for traders, but also for bots/automated trading systems. The actions are the following:
- Notifies you in case of the risk limit reached;
- Closes the positions at the account where the limit is reached;
- Deactivates the orders at the account where the limit is reached;
- Freezes any actions at this account (be it you or any bot or trading system) for the further 24 hours. To clarify, your deposit becomes totally blocked from any actions.
Value. The value of the mechanism, except the ones that are the same to Lock option, is that it restricts the bots’ operations that may cause losses via commissions from the new orders or slippage losses. This way, you also avoid any possible losses related to trading bots’ actions.
These are the risk action options that act as an effective tool and significant facilitation to apply trading strategy in the right way to save your deposit and, therefore, increase your deposit and its stability.
Press Confirm and stay protected!
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