Question on position sizing for altcoins after a significant run

asked by u/wati51 · 23d · 2 answers

Been trading crypto for about a year now, mostly dabbling with larger caps like $ETH and $BTC. I've had some decent wins but also some frustrating give-backs. I'm trying to get a handle on more disciplined position sizing, especially now that some of these smaller altcoins have run up so much. My standard risk per trade on $BTC is typically 0.5% of my total account, but for something like a low-cap alt that's already seen a 5x move, that same percentage feels a lot riskier in terms of potential drawdown if it corrects sharply. Do you guys adjust your risk percentage downwards for assets that have already had parabolic moves, even if your technical setup is sound? Or do you just let the higher volatility dictate a smaller absolute position size to maintain the same 0.5% risk?

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Top answers

  • u/imani_n· 1 pts· 23d

    That's a good question. I usually size down my altcoin positions significantly compared to BTC/ETH, sometimes even to 0.1% risk, especially after a big run. The volatility and potential for quick pullbacks just feel higher.

  • u/sami_sultan· 1 pts· 23d

    You're comparing apples and oranges. Risking 0.5% on BTC and then trying to apply that same percentage to a micro-cap altcoin is a recipe for disaster. Volatility and liquidity are completely different; adjust your position sizing based on those factors, not just a static percentage.

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