Laddering is a strategic trading or investment approach that involves placing multiple buy or sell orders at incrementally different price levels. This technique is used to average entry or exit points, reduce risk, and take advantage of market fluctuations. In Crypto or Forex, laddering buy orders below the current price allows accumulation during dips, while staggered sell orders help lock in profits as prices rise. Laddering is also applied in Bond investing to manage interest rate risk over different maturities. It’s a flexible strategy that suits volatile markets and helps mitigate the impact of mistimed trades.
Example:
An investor purchases Bonds with staggered maturities to manage interest rate risk and liquidity needs.
