3 ways to manage risk while trading crypto in 2025
With signs of a bear market on the horizon, managing risk has become increasingly important for crypto traders.
It's no secret that trading crypto can be risky. But with a bear market potentially in the offing, how can traders minimise their exposure?
1. Have a plan in place
Regardless of your trading strategy, having a detailed plan is essential, and crypto is no exception.
You need to evaluate how crypto fits into your:
- Portfolio
- Overall trading strategy
- Your risk tolerance
Flipster also offers tools to help you enact your plan:
Stop-loss and take-profit
Through the Flipster platform, you can set stop-loss and take-profit orders to help minimise risk when trading crypto.
Stop-loss and take-profit orders are types of limit orders that enable traders to set predetermined price levels for buying or selling cryptocurrency assets.
A stop-loss order determines the maximum loss you are willing to take on a trade, while a take-profit order indicates the price at which you aim to close the trade to secure a profit.
Both orders are executed automatically when the specified price conditions are met.
💻For example, if your average gain is 15%, your risk for any given trade should not exceed 15%.
If you enter a trade at $100, your stop-loss should be set no lower than $85.
Ideally, your average gain should be a multiple of your risk.
📈If your average gain is 15%, limiting your risk to 5% or 7.5% will provide you with a risk-to-reward ratio of 1:3 or 1:2, respectively.
Using tools like stop-loss and take-profit orders can help minimise unnecessary losses.
However, it's important to remember that each person's risk tolerance is different and should be taken into account when trading.
Set Time Trigger Orders
A time-trigger order allows traders to schedule market orders to execute automatically at a specific date and time.
This means you can pre-set a buy or sell order that will be triggered at a chosen moment – such as during a major economic announcement or a token unlock event – without needing to be online.
⏰The order will activate at the scheduled time and execute at the current market price.
This feature is useful for seizing opportunities around key market events or for trading during off-hours.
Importantly, your plan doesn't need to stay static. It can evolve as your knowledge grows, market conditions shift or your overall goals change.
Crypto trading platforms – like Flipster – often include dedicated news and educational features to help you stay up-to-date and make more informed decisions.
2. Being able to flip instantly
Another function available to traders via Flipster is Instant Flip.
Given the volatility in crypto trading, there is a long history of crypto traders switching from long to short, and vice versa.
This helps reduce the potential for losses and lets traders lock in profits as they occur. However, this has traditionally been a pretty convoluted – and manual – process.
With Instant Flip, a trader can quickly close an open position and simultaneously open a new position of the same size in the opposite direction – whether switching from long to short or vice versa – with just one click.
This feature simplifies the trading experience.
You can access Instant Flip through the Flipster app, which is available for both iOS and Android.
🌐Flipster Crypto Exchange
Gain first access to exclusive trading opportunities and a whole range of features with Flipster, including:
- Instant Flip function
- Spot trading
- Social trading
- Rewards Hub - welcome rewards for new users
- And more!
Start your crypto trading journey with Flipster today.
3. Diversify your strategy and portfolio
Diversification is a key consideration for serious traders.
Diversifying your strategy and portfolio – even within a single field – can help reduce your portfolio's risk level, increase your chances of making a profit, and offset potential losses.
Crypto is no exception.
Although crypto traders tend to have a "preferred" cryptocurrency, it's common for them to maintain a portfolio that includes multiple cryptocurrencies.
To minimise exposure, it's worth looking for a trading platform that allows you to purchase a vast range of cryptocurrencies.
Flipster's markets allow you to purchase a broad selection of cryptocurrencies via Spot Trading, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
Explore Flipster's Spot Markets