Crypto Risk Management: How to Protect Your Capital

Why It Matters

Crypto’s wild swings can wipe out accounts fast. Proper risk management separates winners from gamblers.

Essential Rules

1. Position Sizing: Never risk more than 1–2% of your capital per trade.

2. Stop-Loss Orders: Automate exits to limit losses (e.g., set at 5–10% below entry).

3. Diversification: Spread investments across Bitcoin, stablecoins, and altcoins.

Advanced Tactics

• Hedging: Use futures or options to offset spot positions.

• Volatility Adjustments: Reduce position size during high volatility (e.g., news events).