Conviction as a Form of Risk

Given the crypto market’s volatility and this cycle’s unforgiving altcoin price action, risk management is as pertinent as ever. When most traders and investors think of risk, they refer to sizing and downside potential. However, many don’t understand that one of the biggest risks to a trade can be their own lack of conviction.

The saying “conviction can not be borrowed” applies to users who either copytrade or tail trades of people they consider smart or influential. Those who tail trades are usually unable to handle it when price action moves against them as the trade idea isn’t original, or the trader lacks conviction. Often, this leads to closing a trade or position for a loss or selling too early.