Portfolio Rebalancing in Volatile Markets
Position-sizing and rebalance rules to reduce emotional decision-making.
By Crypto University Research
Key Takeaways
- Anchor decisions to objective thresholds before execution.
- Use pre-defined invalidation levels to reduce emotional trades.
- Track outcomes with a repeatable review process.
Steps
- Define objective and timeframe before opening any position.
- Set risk budget, position size, and invalidation point.
- Confirm with context metrics instead of a single signal.
- Log the trade and run weekly process reviews.
Risks and mistakes
- Overfitting a strategy to one market regime.
- Confusing volatility with trend confirmation.
- Ignoring fee drag and liquidity impact.
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