It doesn’t matter how experienced you are at trading because nothing can be done to protect a person against the might of cryptocurrencies’ price swings. Currently, Bitcoin’s (BTC) volatility, the standard measure for daily fluctuations, stands at 64% annualized. As a comparison, the same metric for the S&P 500 stands at 17%, while the volatility spec for WTI crude oil is at 54%.

However, it is possible to avoid the psychological impact of an unexpected 25% intraday price swing by following five basic rules. Fortunately, these tactics do not require advanced tools or large sums of money to hold through periods of high volatility.

Plan to refrain from withdrawing money in less than 2 years

Let’s assume that you’ve got $5,000 to invest, but there’s a good possibility that you might need at least $2,000 of that amount within 12 months for travel or car maintenance or some other task.

The worst thing you can do is do a 100% allocation in crypto because you might need to sell your position at the worst time ever, maybe at a cycle bottom. Even if one plans to use the proceeds in decentralized finance (DeFi) pools, there’s always the risk of impairment losses or hacks that compromise access to the funds.

In short, any funds allocated to cryptocurrencies should have a two-year vesting period.

Always dollar cost average

Even professional traders get swept away by the fear of missing out (FOMO), ceding to an urgency to build a position as quickly as possible. But, if everyone is getting 50% and higher returns consistently and even meme coins are posting stellar returns,…


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