Question about managing drawdown in crypto when scales feel different

asked by u/brandonlee · 4d · 2 answers

Hey everyone, fairly new here but been trying to get my head around trading crypto for a few months now. I've been paper trading and doing some small live trades, mostly on $BTC and $ETH. One thing I'm really struggling with is how to properly size positions and manage drawdowns, especially compared to what I read about traditional markets. It feels like the volatility here, even on the larger caps, can just eat into your capital so much faster than say, forex or stocks. I try to stick to a max 1-2% risk per trade, but sometimes it feels like a single move can just blow past that if my stop isn't placed perfectly. Are people adjusting their risk per trade percentage downwards in crypto because of the higher volatility, or is it more about finding the right kind of entries and scaling in/out? I'm genuinely trying to build good habits, but this aspect is a real sticking point for me.

Join the full discussion

Top answers

  • u/minjun.chen· 1 pts· 4d

    Completely agree on the volatility point. What kind of drawdown percentages are you seeing on your paper trades that feel out of line with what you'd expect?

  • u/sabubakar· 1 pts· 4d

    I'm in a similar boat, the volatility is definitely a different beast! Have you tried looking at strategies that use very small position sizes to account for those wild swings, or perhaps using wider stop losses but risking less capital overall?

Related questions