Power of Risk Reward in Trading | Best Risk Management Strategy for Beginners 2025

TLDR;

This video is about how to manage risk in crypto trading and still be profitable, even with losses. The speaker shares his own trading performance, including a large loss in April and a losing streak in May, but explains how risk management and a good risk-to-reward ratio kept him in profit. He emphasises the importance of focusing on risk management over constantly changing strategies and highlights the benefits of using a platform like Delta Exchange for trading crypto futures and options.

• Importance of risk management in trading.
• Maintaining a good risk-to-reward ratio (ideally 1:3).
• Consistency in strategy and capital allocation.
• Using a reliable platform like Delta Exchange.

Intro: Managing Risk in Crypto Trading [0:00]

The speaker starts by mentioning that he aims to hit a target of ₹50 lakh to ₹1 crore in the next 3-4 months. He shares his recent trading experiences, including a ₹2 lakh loss in a single day and an ₹18 lakh loss over the past five days, but highlights that he is still profitable due to effective risk management. The video will show how risk management helps and how he maximises profits and minimises losses, even with mistakes. He encourages viewers to subscribe for insights into his crypto trading performance and monthly profit/loss reports.

Platform Introduction: Delta Exchange [1:44]

The speaker introduces Delta Exchange, an FI legal platform in India for trading crypto futures and options. He prefers it because it avoids direct crypto buying and selling, which means no 30% tax, wallet hacking worries, or account freezing issues. The focus is on trading crypto volatility and securely managing withdrawals and deposits. A link to Delta Exchange is in the description box for viewers to open an account and start trading. He currently focuses on future trades due to time constraints but plans to trade options soon, highlighting the good accuracy in futures trading.

Trading Performance: Recent Losses [2:27]

The speaker shares his order history, showing recent losses, and emphasises transparency by sharing both losses and profits. He mentions actively trading in cryptos and seeing good potential, which is why he continues to trade with a significant fund allocation. He refers viewers to past videos for logic and explanations behind his trades. He then transitions to reviewing his performance in April and May.

April Performance: Overcoming a Big Loss [3:36]

The speaker discusses his April performance, recalling a previous video where he shared a significant loss in crypto trading, around ₹30 lakh. Despite this, he closed the month with a net loss of only ₹7,22,000. This was possible because his risk-to-reward ratio was well-managed. He explains that while he took losses of ₹2 lakh and ₹3 lakh in some trades, his rewards were significantly higher, such as ₹4 lakh, ₹5 lakh, ₹6 lakh, and ₹8.5 lakh. He admits to making a mistake due to emotional attachment, which led to a large loss, but the good risk-reward ratio prevented a bigger setback.

May Performance: Recovering and Staying Profitable [5:06]

The speaker reviews his May performance, noting that he had a profit of around ₹32 lakh before his recent losing streak. This profit covered the large loss from April. He highlights consistent profits with risks around ₹2-3 lakh and rewards between ₹5-8 lakh, demonstrating a strong risk-to-reward ratio. Even with the ongoing losing streak, his May month is still closing in profit, around ₹18.5 to ₹19 lakh. He emphasises that despite a ₹7 lakh loss from the previous month and current losses, he still maintains a ₹1 lakh profit over the two months.

The Power of Risk Management [7:36]

The speaker explains how others can achieve similar results by managing risk effectively. He reiterates the importance of a good risk-to-reward ratio, ideally 1:3, and notes that even with a 50-60% accuracy, a trader can be profitable. He advises against constantly changing strategies and position sizing. His average fund allocation per trade is around $8,000, and he rarely exceeds $10,000-$12,000, even though he could invest much more. Limiting capital per trade helps minimise losses during losing streaks.

Practical Advice for Traders [10:10]

The speaker advises prioritising risk management to increase the chances of being profitable. He suggests sticking to one strategy, refining it, and balancing the risk-to-reward ratio to at least 1:3. He recommends reducing trading frequency and focusing on larger time frames like 1-hour, 30-minute, or 4-hour charts for swing trades. Instead of many trades, aim for 12-15 quality trades a month with a powerful strategy and good risk-reward. He concludes by emphasising that while mistakes happen, protecting capital and maintaining a smooth trading journey are key to profitability.

Final Thoughts and Call to Action [11:42]

The speaker encourages viewers to focus on their strategy and improve their risk-to-reward ratio. He promotes Delta Exchange as a reliable platform for crypto trading and provides a referral link in the description for a 10% brokerage discount. Viewers who fill out the Google Form will get free access to his community where he shares trades, analysis, and research. He ends the video with a call to action to like, subscribe, and join the community for learning and support in crypto trading.