What happens when the link between your coins breaks? 📉
🔹 The relationship between coins can weaken or vanish, turning a pair into two independent bets.
🔹 Both legs can end up in the red simultaneously: your long coin falls while your short coin rises.
🔹 In this case, losses add up instead of offsetting each other.
🔹 This happens especially often during stressful market moments when coin behavior is hard to predict.
Example: Coin A falls by 7% and Coin B rises by 5%. Long A loses 7%, short B loses 5%. Total result: -12% before fees.
⚠️ Typical mistake: Not planning for the worst-case scenario where both legs lose at the same time.
How do you decide in advance that the relationship between coins no longer works?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
🔹 The relationship between coins can weaken or vanish, turning a pair into two independent bets.
🔹 Both legs can end up in the red simultaneously: your long coin falls while your short coin rises.
🔹 In this case, losses add up instead of offsetting each other.
🔹 This happens especially often during stressful market moments when coin behavior is hard to predict.
Example: Coin A falls by 7% and Coin B rises by 5%. Long A loses 7%, short B loses 5%. Total result: -12% before fees.
⚠️ Typical mistake: Not planning for the worst-case scenario where both legs lose at the same time.
How do you decide in advance that the relationship between coins no longer works?
#Futures #CryptoTrading #CryptoEducation #RiskManagement