🟢Diversify your portfolio
🔵If you decide to create a trading plan, you should cover portfolio diversification to reduce your risk. Holding just one or two assets in your portfolio tends to be riskier. As such, you can diversify your holdings by investing in different assets across3 multiple asset classes.
🟣In crypto, you can begin by defining your asset allocation. You could allocate your investments in DeFi liquidity pools, staking, derivatives, stablecoins, and altcoins. By reducing your exposure to one single crypto class, you are less likely to experience big losses. For example, you may experience impermanent loss from a liquidity pool you’re invested in but offset your losses through staking gains.
👉You can then diversify within these different asset classes. For stablecoins, you could hold BUSD, USDT, and PAXG to reduce your overall portfolio risk even further. But these are just examples. There are multiple responsible ways to plan out your crypto portfolio.
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