Volatility and risk in crypto
Why crypto demands smaller positions and wider stops than most forex trades.
Bigger moves, same account
Daily percentage moves in crypto are often several times larger than in major currency pairs. A position size that feels normal in forex can be far too large in crypto.
Size to the volatility
Place your stop where the trade idea is proven wrong, not where it feels comfortable — then reduce the position until that stop equals your normal risk per trade. If an ordinary day’s movement would hit your stop, the position is too big or the stop too tight.
Liquidation cascades
When prices fall quickly, leveraged long positions are liquidated, which pushes prices lower and triggers more liquidations. The same happens in reverse to shorts. These cascades create sudden spikes that can skip past stop-losses.
Educational content only — not financial, investment or trading advice. Trading forex, CFDs, crypto and other leveraged products carries a high risk of loss and may not be suitable for everyone. Past performance does not guarantee future results.