Why Every Crypto Trader Needs a Risk Dashboard

The Core Building Blocks of a Crypto Risk Dashboard

1) Account & Leverage Controls

Start with a clear snapshot of your account equity, cash, margin availability, and open positions—across spot and derivatives. Track your effective portfolio leverage: not just the leverage on a single position, but total net exposure relative to equity. This helps prevent a slow drift into excessive risk.

Effective Portfolio Leverage = (Σ |Notional Exposure| across positions) / Account Equity

In Canada, if you trade via registered CTPs like Bitbuy or Wealthsimple Crypto, futures and margin offerings may differ from global platforms. Your dashboard should reflect the true leverage you can access on each venue and consolidate notional exposure across all accounts.

2) Position Sizing Engine

Position sizing converts risk tolerance into a position amount. A common approach is to risk a fixed percentage of equity per trade and size the position using volatility-based stops.

Risk per Trade (C$) = Account Equity × Risk%

Position Size (units) = Risk per Trade / (Entry Price − Stop Price)

Using volatility to set your stop keeps you from placing tight stops that get “noise‑stopped” during normal fluctuations.

3) Volatility Meters (ATR and Realized Vol)

Volatility is the steering wheel of your sizing engine. Two practical measures:

• ATR (Average True Range): Measures typical range over N periods. Many traders place stops 1.5–3× ATR away from entry.
• Realized Volatility: Standard deviation of returns over a rolling window. Useful for dynamic risk caps.

ATR(N) = average of True Range over N periods
True Range = max(High−Low, |High−PrevClose|, |Low−PrevClose|)

4) Correlation & Diversification

Holding multiple coins does not guarantee diversification. Many altcoins are highly correlated to Bitcoin and Ethereum, especially during risk‑on or risk‑off phases. Your dashboard should compute rolling correlations (e.g., 30‑day) among your holdings.

Corr(X, Y) = Cov(X, Y) / (σX × σY)

If correlations cluster near +1, treat positions as a single big bet and reduce position sizes or add uncorrelated strategies (e.g., market‑neutral basis or funding carry).

5) Drawdown, Equity Curve, and Risk‑of‑Ruin

Drawdown is the peak‑to‑trough decline of your equity curve. Track both your current drawdown and the rolling max drawdown. Add a simple risk‑of‑ruin approximation: as your average loss rate and loss size increase, the probability of hitting a ruin threshold rises fast. Keeping risk per trade small (typically 0.25%–1.0% for active traders) dramatically lowers this risk.

6) Liquidity & Slippage Checker

For smaller‑cap coins, the cost of getting in and out can dwarf your edge. Your dashboard should estimate slippage based on order book depth and your order size. Aim to keep expected slippage below a set percentage of ATR or below a fixed basis‑point threshold.

Expected Slippage (bps) ≈ (Order Size / Top‑of‑Book Depth) × 10000

7) Funding Rates, Basis, and Leverage Costs

Derivatives traders must track funding (perpetual swaps) and futures basis (difference between futures and spot). Positive funding means longs pay shorts; negative funding means shorts pay longs. Your dashboard should estimate the expected funding cost/income for the next 24–72 hours and its impact on net P&L. For hedged basis trades, monitor the spread and your net carry.

8) Compliance, Records, and Taxes for Canadians

Canadian traders should maintain records that align with registered CTP statements and wallet activity. At tax time, the Canada Revenue Agency (CRA) distinguishes between capital gains/losses and business income—depending on factors like frequency, intention, and organization of activity. Keep detailed logs of trades, costs, and fees. If you are using non‑Canadian venues, ensure your records capture deposits/withdrawals and conversions to CAD.

Step‑by‑Step: Build a Simple Dashboard in a Spreadsheet

You can implement a robust dashboard in Google Sheets or Excel before investing in specialized software. Here’s a lean blueprint you can build in an afternoon.

Tab 1: Data Inputs

• Symbols: BTC, ETH, and 3–5 liquid alts you actually trade.
• Timeframe: 1h for day trading; 4h or 1D for swing trading.
• Fields: Open, High, Low, Close, Volume. If you use perps, add funding and open interest.
• Exchange notes: If your execution is on a Canadian CTP, ensure your pricing aligns with that venue; if you route to a global derivatives venue, tag the venue in your data for slippage analysis.

Tab 2: Volatility & Correlation

• Compute ATR(14) and ATR(20) on your trading timeframe.
• Compute 20‑period realized volatility (annualize if desired).
• Build a 30‑day rolling correlation matrix for your symbols; color‑code correlations > 0.7.

Tab 3: Position Sizing

Inputs: account equity in CAD, risk per trade %, entry price, stop price, ATR, and leverage limit. The sheet outputs units, notional, and margin used.

RiskCAD = EquityCAD × Risk%
StopDistance = max(Entry − Stop, k × ATR)
Units = RiskCAD / StopDistance
Notional = Units × Entry

Set k between 1.5 and 2.5 for most markets. Add a guardrail to cap portfolio exposure when correlations spike.

Tab 4: Liquidity, Slippage & Fees

• Top‑of‑book depth estimates; your typical order size.
• Expected taker fee and maker rebate (if applicable).
• Compute all‑in cost: slippage + fees + funding (for perps).

All‑in Trade Cost (bps) = Slippage (bps) + Fees (bps) + Funding (bps over holding period)

Tab 5: Trade Log & Equity Curve

Record every trade with time, venue, setup type, screenshots if possible, and P&L after costs. The equity curve tab calculates drawdown and win rate. Add tags like “trend‑breakout,” “mean‑reversion,” or “news‑driven” to filter results by setup.

Tab 6: Canada‑Specific Records

Create a clean export that summarizes disposals, proceeds, cost base, and fees in CAD. This helps you (and your accountant) at tax time and keeps your reporting consistent with statements from registered Canadian platforms.

Using the Dashboard to Make Real Decisions

Scenario A: Day Trader on BTC Breakout

Conditions: BTC is coiling with ATR expanding on the 1‑hour chart; correlations with ETH and your chosen alt are high (> 0.8), suggesting a single‑bet environment. Funding is mildly positive, implying long positions pay a small cost.

Units = RiskCAD / StopDistance = 125 / 2,160 ≈ 0.0579 BTC
Notional ≈ 0.0579 × 90,000 ≈ C$5,211

This sizing respects your risk budget. Because correlations are high, you should avoid opening additional large longs in ETH or alts concurrently—or reduce their size materially.

Scenario B: Swing Trader Diversifying Exposure

Conditions: ETH shows a higher‑low structure on the daily timeframe, while a DeFi token exhibits an uncorrelated catalyst. Your correlation matrix shows BTC/ETH at 0.85, but the DeFi token at 0.35 to BTC over 30 days. You can hold BTC and the DeFi token together for better diversification, but keep ETH size smaller due to overlap with BTC beta.

Scenario C: Market‑Neutral Funding Carry

If funding turns strongly negative (shorts pay longs), consider a measured long‑perp plus short‑spot (or long‑spot plus short‑perp, depending on sign) to capture carry. Size conservatively and account for slippage, fees, and potential regime flips. This type of trade reduces correlation to market direction but increases operational risk, so your dashboard should include a checklist and exit triggers.

Canadian Realities: Platforms, Custody, and Record‑Keeping

Canadian traders often combine registered CTPs for spot exposure and fiat on‑ramps with global venues for derivatives. Your risk dashboard should acknowledge the differences in custody, disclosures, and leverage limits, and should reconcile balances in CAD. Because crypto assets aren’t insured by CDIC, treat custody concentration as a risk metric: spread assets across reputable custodians and maintained wallets when appropriate, and document wallet addresses in your records.

Common Pitfalls Your Dashboard Can Prevent

Oversizing in Correlated Markets

If BTC, ETH, and your alt basket all surge together, you may unknowingly run 2–3× your intended risk. A correlation‑aware risk cap prevents this.

Ignoring All‑In Costs

Fees, slippage, and funding can turn a marginal setup negative edge. Your dashboard should display net expectancy after costs based on your average trade stats.

Stop Placement Too Tight

Using fixed price stops (e.g., C$100) on BTC often results in getting stopped out by normal noise. ATR‑based stops adapt to market conditions.

No Hard Limits

Establish daily loss limits and a maximum open risk threshold. If your rule says “stop for the day at −1.5% of equity,” your dashboard should flash red and lock you out of new positions when reached.

Poor Records and Tax Surprises

Unreconciled records lead to missed fees, incorrect cost base, and stressful tax seasons. Automate your exports and reconcile monthly to your Canadian platform statements.

An Actionable Template You Can Use Today

Advanced Add‑Ons When You’re Ready

• Regime Detection: Combine moving‑average slope, ADX, and realized vol to decide when to favor breakouts vs. mean‑reversion.
• Beta‑Adjusted Sizing: Size alts by their beta to BTC so your total BTC‑equivalent exposure stays consistent.
• Event Tracking: Track protocol upgrades, unlocks, and ETF flows as calendar events with pre‑defined playbooks and risk limits.
• Custody Concentration Score: Assign a score based on how much of your portfolio is held at a single custodian or venue.

Putting It All Together

A risk dashboard is not a fancy spreadsheet—it’s a trading habit. The process of updating your data, checking correlations, and sizing positions with ATR is what keeps you disciplined when markets are euphoric or fearful. For Canadian traders, a compliance‑aware dashboard also simplifies reporting, reduces tax headaches, and keeps your workflow aligned with registered CTPs. Over time, the dashboard becomes a feedback loop: you’ll know which setups deserve more capital, which coins are consistently costly to trade, and when to scale down because risk is clustered.