Intermediate9 min read
Crypto Risk Management
A practical framework for position sizing, portfolio limits, and drawdown control in volatile markets.
risk managementposition sizingdrawdown
Position sizing
- Use fixed risk per trade rather than fixed dollar position size.
- Size down in high-volatility periods and around major event risk.
Portfolio rules
- Set max allocation caps for any single asset or sector.
- Separate core long-term holdings from tactical trading capital.
Discipline
- Keep a trading journal to track rule violations and improve process.
- Use pre-defined max daily/weekly loss limits to prevent emotional spirals.