How to Conduct Risk Management and Responsible Trading

Risk management is an essential component of the trading process. Through scientific and reasonable risk control, traders can effectively limit losses during unfavorable market conditions, prevent account funds from suffering intolerable risks, and enhance stability in their long-term trading endeavors.

Without a clear risk management plan, even substantial gains from previous trades can be wiped out by one or two unfavorable transactions, potentially resulting in significant drawdowns or even the loss of all trading capital.

What is Responsible Trading?

The nature of a free market means anyone can participate, but market price fluctuations are beyond individual control. Prices may rise, fall, or move sideways for extended periods.

What traders can control includes:

• Whether to participate in trading

• When to enter or exit the market

• How much risk to undertake

• Which trading strategies and products to use

Responsible Trading refers to traders autonomously controlling their trading behavior and taking responsibility for their own decisions, based on a full understanding of the risks involved.

This means:

• Not using funds beyond one's risk tolerance for trading

• Not amplifying risks due to short-term emotions or impulses

• Not viewing trading as gambling or a tool for quick profits

Four Key Aspects of Responsible and Safe Trading

I. Maintain Discipline, Avoid Forced Trading Discipline is one of the most important qualities in trading. In practice, this means:

• Avoiding frequent trading driven by emotional swings

• Not "doubling down" to recoup losses after a losing streak

• Not treating derivatives trading as high-risk speculation or gambling

NewCoin encourages users to participate in trading rationally and uses system risk prompts to remind users of potential risks associated with consecutive losses, overtrading, and high-leverage products.

II. Continuous Learning, Enhancing Risk Awareness Cryptocurrency trading involves technical, market, and fund management aspects, presenting a learning curve for new users.

Traders should continuously learn and understand:

• Basic trading rules and product mechanisms

• Risk concepts like leverage, margin, and liquidation

• The impact of market volatility on account equity

NewCoin is committed to providing users with clear, transparent product explanations and risk education materials to help them better understand trading mechanisms. However, learning and judgment ultimately rest with the user.

III. Prudent Fund Management, Utilizing Risk Control Tools Risk management is the foundation of every successful trade.

To assist users in controlling risk, NewCoin provides various risk management mechanisms and features, including but not limited to:

• Stop-Loss / Take-Profit Orders

• Liquidation Mechanism

• Risk Limits and Margin Requirements

• Contract Insurance Fund Mechanism

These tools are designed to help users reduce potential losses during extreme market conditions but cannot eliminate risk entirely. Traders must still set reasonable position sizes and allow sufficient room for market fluctuations.

IV. Knowing When to Pause, Identifying Unhealthy Trading Behavior Understanding when to stop trading is a crucial part of responsible trading. Traders should conduct regular self-assessments, for example, asking themselves:

• Am I chasing losses to break even?

• Have I deviated from my original strategy due to emotional swings?

• Am I taking on risks beyond my psychological or financial tolerance?

When such situations arise, pausing to trade and reassessing one's strategy is often more rational than continuing.

NewCoin assists users in identifying abnormal trading behavior and alerts them to potential risks through risk prompts and trading reminders. However, the final decision-making power always lies with the user.

Risk Disclaimer Digital asset and derivatives trading involves significant risk. Price volatility may lead to partial or total loss of funds. This content is intended solely for risk education and trading awareness and does not constitute any investment advice or guarantee of returns. Please participate in trading rationally, based on a full understanding of product rules and your own risk tolerance.