Ladder trading is a strategy where traders place multiple buy or sell orders at different price levels rather than a single order. It helps manage risk, secure profits gradually, and adapt to unpredictable market movements. Laddering can be applied for both entries and exits.
Example:
A trader who wants to buy Bitcoin allocates $10,000 and sets staggered buy orders: $2,000 at $108,000, $3,000 at $105,000, and $5,000 at $100,000. This ensures they capture better average prices if the market dips.