Volatility: bad and good - how to distinguish

Everyone who trades intraday knows that high volatility is good. Because it has a better risk/reward ratio, making it easier to earn on a coin. However, there are situations when high volatility can be 'bad'.

Bad volatility arises in so-called algo instruments when there is no organic liquidity in the order book. This means there is no interest from real people in the coin, and all the hustle and the price rise/fall is organized by a single market maker. The easiest way to see a coin with 'bad' volatility is in the order book. In the screenshot, the coin #la that was listed on Binance today is shown. In the order book of the coin, it can be seen that for a 2% price movement, there are sell orders totaling only $500k, which is very low. Any average trader can create a candle in either direction in a second and trigger your stops.

Therefore, when trading such coins, it is important to significantly reduce working volumes and set a large stop loss. Or not trade this coin at all until organic liquidity enters it.