Volatility is the whole game
Volatility means how much it swings
A quiet market moves 1% a day. Crypto routinely moves 5-10%, and in a crash 30% in an afternoon. That's volatility — not direction, just size of movement.
It cuts both ways
High volatility is why crypto can double in a month. It's also why it can halve in two days. You don't get one without the other. Anyone selling you the upside without the downside is selling you something.
Bigger swings, smaller position
The practical response to volatility isn't to avoid it — it's to size down. A 10% move on $1,000 stings. On $10,000 it can end you.
Check yourself
A coin's volatility doubles. What should happen to your position size?
- Double it — bigger swings, bigger profits
- Halve it — the same stake now carries twice the risk
- Nothing, position size is unrelated
Show the answer
Halve it — the same stake now carries twice the risk — Risk is stake multiplied by how far price can move. If the movement doubles, the stake has to come down to keep the risk the same.