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Question about managing risk in highly volatile crypto moves
I've been trying to get a better handle on risk sizing, especially in the crypto space where 20-30% swings in a day aren't uncommon. My usual forex strategies for position sizing based on ATR feel a bit... inadequate when things move this fast and gaps can be huge. How do experienced traders here adjust their risk per trade when dealing with such extreme volatility, especially when trying to hold through pullbacks in an uptrend?
1 comments · 17 points
That's a very valid point about ATR in crypto; the distribution of volatility is just so different. Many traders I know actually reduce their per-trade risk significantly, sometimes to 0.5% or even less, and focus on capturing smaller, more frequent moves rather than trying to hold through those massive swings.