Volatility targeting in crypto: smaller positions in wild markets
The same coin basket, but its size shrinks when prices are jumping and grows when they calm down.
The rule
Measure how much the basket has swung recently. If it swings more than your target, hold proportionally less and keep the rest in cash.
Why people use it
Crypto volatility changes several times over within a year. Sizing by volatility keeps the swings of the account closer to one level and cuts exposure in the wildest weeks, which are often the falling ones.
Where it hurts
The position is smallest right after a crash, so the first part of the rebound is caught with little money. Even at the target, 50% volatility a year is several times that of stocks.
How our bot runs it
The bots take five coins in equal parts and aim at 50% annual volatility, measured over 30 days. Once a week the total position is set in steps of 10%, never above 100%. When the market filter says the market is falling, the bot holds cash.
Live account
A virtual $100,000 account that follows this rule. Every trade is on the bot's page.
| Bot | Account | Return |
|---|---|---|
| Five coins at steady risk | $100,000 | +0.00% |
| Five altcoins at steady risk | $100,000 | +0.00% |