Gains, drawdowns, and risk management: a january to remember

After surpassing $5,500, it fell very quickly, dropping 10% of its total price in just a few hours. This resulted in a loss for me on a buy position, although I still ended up with a profit from my trading throughout the month. I didn't expect such a massive market collapse.

The same thing happened with other metals. For example, the drop in silver was much worse, reaching a loss of over 30%, which is absolutely insane. I don't trade silver, but it's something to consider because there were losses of billions of dollars in less than 24 hours, which is not very common, especially considering that silver and gold are the most important metals in the world's largest markets.

Logically, if these markets fall, it generates fear, and this fear spills over into the crypto market as well. It's entering the same downward spiral as the global market, with BTC recently touching $75,000 and Ethereum dropping to around $2,300. In both cases, this represents a considerable percentage loss considering the prices they recently reached.

I've been reviewing news to try and understand what caused this brutal global market crash, and there are some things I'm not entirely clear on. The market is definitely complex, and it's not something we can fully understand. There are many things we're unaware of, like gifts, and many powerful players in the markets, which is something we can't compete with.

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That's why risk management, at least for me, is fundamental. After a good month of trading, it wouldn't make sense for one trade to wipe out all the profits, for example. That's why we need to have strict risk control when we trade.

Apparently, one of the causes of this major drop is the nomination of a new Fed chairman by Trump, who logically must be voted on by the FOMC committee. But just knowing that this person isn't easily manipulated and that he won't (apparently) be guided by Trump, caused the markets to fall.

_Source

This is what I saw most often in the news, and it was generally repeated. However, the reality is that the Fed will have to raise interest rates, flood the market with money, and everything will continue to rise. It will take some time, but that's what I believe will happen. Only time will tell.

Looking ahead, I remain optimistic, but cautious. I think we'll see more volatility, more sharp movements, and more opportunities, but also more pitfalls for those who overexpose themselves. Patience, risk management, and the ability to accept small losses remain, for me, the most important tools in this game.

In the end, it's not about always being right; it's about surviving long enough to seize good opportunities when they arise. And for that, protecting your capital and your sanity is far more important than any brilliant prediction.

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_{Posted using SteemX}