One area of risk management that I’m actively working to improve is the analysis of a crypto asset’s historical behavior and the extraction of risk patterns from past data. In a market as volatile as crypto, historical price movement and the intensity of previous drawdowns can offer a clear picture of an asset’s behavioral risk going forward.

To strengthen this skill, I’m focused on three key metrics:

Maximum Drawdown (MDD):

Understanding the worst historical decline of each asset helps me gauge how severely it can fall under extreme conditions.

Weekly and Monthly ROI Analysis:

By studying return patterns across different time frames, I can identify whether an asset shows cyclical tendencies or behaves in a highly unpredictable way.

Behavioral Risk Modeling Based on Past Patterns:

I use historical reactions of each asset in similar market conditions to estimate its current level of risk. When I know how a coin behaved during past volatility spikes or stress periods, I can form a more realistic view of its present risk profile.

My goal is to develop a more accurate framework for anticipating risk surges by relying on the behavioral.

Position sizing and exposure management are the principal aspects of risk management that I’m currently looking to improve when trading in both crypto and forex. The volatility of both markets may produce extraordinary levels of profit or loss, especially if you are an advanced trader that fails to properly size your position in correspondence to the entirety of your portfolio.

To progress my studies in this area, I’ve been focusing on using data to simulate and stress test market conditions and to evaluate various allocation strategies through the use of historical market data. In addition, I’ve been studying the advanced risk metrics of Value at Risk (VaR) and Conditional VaR, which allow me to view potential losses beyond the historical stop-loss analysis.

Moreover, I’ve been engaging in webinars and taking courses from respectable organizations that advocate for responsible trading risk management, and reviewing the associated regulatory guidance on the utilization of margins and the restrictions placed on leverage usage. Ultimately, I’m hoping to use the theoretical knowledge I acquire, combined with my practice under real-time conditions, to help me make disciplined and informed decisions while reducing exposure to sudden changes in the marketplace. By using this approach, I will be able to proactively manage risk, as opposed to reactively managing it; therefore, I expect to find success in the highly volatile trading environments.

One area of risk management I’m actively working to improve is position sizing during high-volatility periods. In both crypto and forex, the mistake is rarely the analysis. It is usually the size of the trade relative to the market’s ability to move against you.

To improve, I have been tightening my rules around volatility-adjusted sizing and using more systematic frameworks instead of relying on instinct. I review past trades, study how my positions behaved during sudden price swings, and test different sizing models that keep risk constant even when volatility spikes.

The goal is simple: remove emotion from the decision and make risk measurable. When size is disciplined, the rest of the strategy works much more reliably.

I’m currently working to improve my approach to leverage management after witnessing how devastating it can be in crypto markets. The ATOM flash crash on Binance earlier this year was a wake-up call – seeing a major token nearly go to zero in minutes showed just how brutal leverage can be in this space. Unlike traditional markets, crypto’s on-chain transparency actually works against leveraged traders: liquidation bots can see exactly where stop-losses and liquidation levels cluster, making it incredibly easy to get wiped out during coordinated attacks or flash crashes.

So one advice: NO LEVERAGE. EVER.

We’re sick of rug pulls. In order to build a utility token that was stable for our social platform EqoFlow.app, we had to design a vesting schedule for founders and users to prevent massive sell-offs that could destroy our on-platform economy. Strong vesting helps protect against rug pulls because it prevents large amounts of tokens from hitting the market all at once.

For this reason, EqoFlow’s ITO uses a 210-day vesting schedule that gradually unlocks every 30 days (10% at day 30, and then 15% per period until 100% is reached). That kind of staged release makes it much harder for early participants (our founders’ vesting schedule is even more strict) to dump tokens suddenly, which significantly reduces liquidity risk.

Our team took their time to educate themselves on various scenarios to protect the stability of the token—rather than just release it out into the wild.