How to trade safely in high volatility
The crypto market remains extremely volatile, with sudden drops and pump-and-dump movements common. Smart traders survive by carefully managing risk and emotions.
Use stop-loss and trade short
Always use stop-loss orders. Letting emotions dictate decisions is a quick way to lose capital. Trade in smaller sizes during volatile periods to minimize risk and avoid excessive leverage.
Follow the market sentiment
Use tools like the Fear and Greed Index or Twitter/X social signals to measure market sentiment. Avoid revenge trades – One bad trade does not justify jumping into the next trade. Take time to reset and reassess.
Secure benefits and plan entries
Don’t be greedy – use a trailing stop to lock in profits or scale out the position. Plan your trades carefully and enter pullbacks, rather than chasing a sudden green move. This approach keeps risk under control while taking advantage of market volatility.