How to manage risks and tackle volatility when trading crypto
You’ve probably heard stories about how people made 10x in the crypto trading industry, while others lost most of their capital. Cryptocurrency is one of the most tradable assets today, with its market running 24/7. Investors flocked towards the Bitcoin and crypto trading during the massive boom in 2018.
Cryptocurrency remains to be very volatile, but exactly how volatile is the market? Crypto markets experience periods of volatility with new developments and speculation which have led to extreme price swings.
Volatility is a double-edged sword
While volatility has its drawbacks, due to the association with uncertainty, market chaos, and big losses, price swings could be beneficial to crypto traders. When it was revealed that the world’s richest man, Elon Musk added “Bitcoin” to his Twitter bio, Bitcoin rose $15.7% in the span of 15 minutes. When it was revealed that his company Tesla acquired $1.5 billion in Bitcoin (BTC), the world’s largest cryptocurrency surged by a whopping 20.33%.
As you already know, the cryptocurrency market runs 24 hours a day, 7 days a week, which means that traders can have unlimited opportunities to benefit off of volatility and intraday swings.
Crypto has since grown out of the narrative of being a tool of the dark web, as more institutional and individual investors have increasingly taken interest in the industry. Handling volatility in the market is nothing new to institutional investors, however, this may be a key point to be aware of for individual investors.
The emotional aspect of trading
The emotional aspect of trading in an extremely volatile market may be hard to handle for traders, especially beginners — when prices go up, we can experience euphoria but when you see your portfolio shrink, you’d probably start to panic.
Managing risks in a volatile market
It’s important to remember what your trading strategies and plans are when it comes to trading cryptocurrencies. While the cryptocurrency market allows you to be able to capture opportunities around the clock, trade automation could allow you to set your own algorithms, according to your trading risk appetite.
By using a trade automation tool such as CoinPanel, it allows you to trigger a trade when preset conditions are met, which means that you could avoid hefty losses when the market changes direction.
By eliminating human errors and emotions when trading, CoinPanel can enable you to trade according to your strategies, rather than being affected by impulsive behaviors when the market fluctuates.
CoinPanel’s trading automation platform enables for faster execution for trades, which is essential for successful trade outcomes. The all-in-one trading platform allows you to respond quickly to a volatile market, which allows you to make your crypto work for you without having to execute trades manually. Simply by linking your crypto exchange API key with CoinPanel, you can start trading effortlessly in a secure environment. Built on top of a world-class infrastructure in Sweden, CoinPanel ensures your data is encrypted and secure on Google Data Centres.
If you plan to trade cryptocurrencies, it’s important to be equipped with advanced tools provided by an all-in-one platform, which allows you to be able to trade crypto effortlessly, and check your portfolio at ease. CoinPanel offers advanced tools to enable traders to reap the opportunities of a volatile market, all while managing the risks associated with the ever-growing crypto market.
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