Risk Management: Position Sizing & Scenarios

Limiting downside risks keeps you invested long enough to realize upside gains. Risk isn’t just per-trade—it’s also built into the rules of your investment plan..

Goal: Control downside without losing upside through position sizing, drawdown brakes, and a pump/dump scenario playbook you can execute without emotion.

Bitcoin Trend Awareness :

• Be aware if Bitcoin is in a bullish, neutral or bearish price trend.

• During bull market price cycles, altcoins tend to outperform Bitcoin. Conversely Altcoins tend to underperform during neutral and bear market cycles.

• If Bitcoin is in a bearish price trend, move high risk assets to safer assets and vice-versa.

• Use Support and Resistance levels. Plan to sell when a high-risk asset goes above resistance. Take a profit during price pumps.

• Avoid all or nothing trading, when a position is in profit it's often preferable to sell a percentage of the position (10%, 25%).

• The Quantify Crypto Screener provides real-time support and resistance levels https://quantifycrypto.com/coin-screener

Single-Trade Safety:

Set a maximum size for any single order so one decision can’t dominate your results. Capping each trade at, say, 25% of your trading allocation keeps you from going all-in or all-out, reduces whipsaw, and preserves flexibility. If the trade works, you still have room to add on confirmation; if it doesn’t, the damage is contained, and you can adjust without scrambling.

Example: Going back to the example with Maria, if she had only sold 25% of her trading allocation she would have been in much better shape. Continuing in the scenario after she sold all her Bitcoin, if she had only used 25% of her cash funds to make her initial repurchase when Bitcoin was at its top, she would be able to perform additional purchases after Bitcoin was 20% lower off its peak.

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John Barry , and the rest of the Quantify Crypto team are not investment advisers and you agree to not cite the Quantify Crypto platform or content as the reason or cause for making any trading decisions. Quantify Crypto is not accountable, directly, or indirectly, for any damage or loss incurred, alleged or otherwise, in connection to the use or reliance of any content you read on the site. Past performance is no guarantee of future results.