Volatility and managing your risk

Volatility is how much a price swings. Crypto is volatile: a 5% day is ordinary for many coins, and 20% days happen. The same move can be normal for one coin and rare for another, so it helps to measure each coin by its own history.

Sizing it up

• The typical daily move is the middle of a coin's last 90 daily moves. Half its days moved less, half moved more.
• The usual range is the band its days stayed inside about two times in three, counted on its last year. How the usual range works
• Swings against Bitcoin show whether a coin tends to move more or less than the market leader.

Habits that limit the damage

• Know what share of your holdings each coin is. Ask what a 25% or 50% fall in that coin would do to the whole.
• Write your plan before you buy: why you hold it, and where you'd take some profit. Decisions made in a fast market are often ones people regret.
• Selling in steps, at several prices, means you don't need to pick the top. Exit zones
• Keep money you can't afford to lose out of volatile coins.
• Be most careful with coins that are new, thinly traded or far above their usual range.

What it can't do

None of these numbers predicts the next move. A coin that has been calm can move sharply, and a usual range will be broken about one day in three. They help you see what's normal, so you can decide calmly. The decisions stay yours.

Not financial advice. CheckACoin shows figures from each coin's own history; it never tells you to buy or sell.