I’ve adjusted how I approach shorting.
Not because the setups disappeared,
but because the risk profile doesn’t justify the trade anymore.
Anything under ~$50M market cap, I simply don’t short.
At first, it feels like missed opportunity.
Low caps move fast, inefficiencies are obvious, and sometimes the direction looks clear. You can even be right on the idea.
But that’s not the real problem.
The issue is control.
In smaller caps, price isn’t just driven by market structure. It can be pushed. Liquidity is thin, and it doesn’t take much for a few large players to distort the move completely.
You’re not trading the market.
You’re trading inside someone else’s range.
And when that happens, being “right” stops mattering.
A coin can move irrationally far beyond what makes sense. Market cap can expand multiple times before any correction shows up. If you’re short, that expansion works directly against you.
Losses don’t scale linearly.
They compound quickly.
That’s the asymmetry most people underestimate.
On the upside, you’re capped.
On the downside, you’re exposed to expansion you don’t control.
So even if the idea is correct, the structure of the trade isn’t.
I’d rather miss a move than sit in a position where the risk can’t be defined properly.
This isn’t about avoiding trades.
It’s about avoiding situations where the outcome depends more on who’s moving the price… than on the setup itself.
$BTC $ETH $SOL #crypto #trading #RiskManagement