Risk Management
Best Practices
Risk Management
Never risk more than you can afford to lose - Leverage magnifies both gains and losses
Use stop losses - Protect capital by setting automatic exit points
Monitor liquidation prices - Keep adequate margin buffer especially above 50x leverage
Start small - Test strategies with lower leverage before scaling up
Diversify - Avoid concentrating risk in a single market or position
Order Strategy
Limit orders for entries - Get better prices during volatile markets
Market orders for exits - Ensure execution when closing positions quickly
Bracket orders - Always set both TP and SL for automated risk management
Edit over cancel - Modify existing orders instead of canceling and recreating to save gas
Fee Optimization
Check price impact - Large orders in low liquidity markets pay higher impact fees
Monitor funding rates - High negative rates increase position holding costs
Claim fees regularly - Don't let accrued rebates sit unclaimed
Time your entries - Wait for favorable funding rate flips when holding multi-day positions
Liquidation Avoidance
Maintain margin buffer - Keep liquidation price at least 5-10% away from mark price
Add collateral preemptively - Don't wait until liquidation is imminent
Reduce leverage - Lower leverage = greater safety margin
Close partials - Take profits and reduce size to improve liquidation price
Advanced Features
Position Compounding
Compound realized gains back into positions for exponential growth:
Close a portion of your winning position
Receive PnL + proportional collateral (Keep Leverage On)
Immediately reopen a larger position with realized profits as additional collateral
Repeat to grow position size using market gains
This strategy maximizes capital efficiency but increases risk exposure - use strict stop losses.
Hedging
Open opposing positions across markets to manage risk:
Cross-asset hedging - Long crypto, short correlated equity indices
Spread trading - Long one commodity, short a related commodity
Basis trading - Capture funding rate differentials between markets
Note that each position incurs independent fees and margin requirements.
Multi-Market Strategies
Execute sophisticated strategies across HertzFlow's diverse markets:
Macro plays - Trade forex pairs based on economic data and central bank policies
Correlation plays - Exploit relationships between crypto and traditional markets
Volatility trading - Short VIX or similar indices during calm markets
Commodity cycles - Position in gold, oil, or agriculture based on seasonal patterns
Access to traditional markets 24/7 enables crypto traders to apply DeFi principles to TradFi assets.
Risk Warning: Trading with leverage carries substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances. The possibility exists that you could sustain losses in excess of your deposited funds. Only trade with capital you can afford to lose.
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