#广场狂热挑战赛 Everyone loses money in crypto at some point, but loss does not mean bankruptcy. Reliable and feasible risk management can help you survive and gain benefits at the same time. Risk management is especially important when the market is in a panic. Risk management can really save many people. In this article, I will take you through the most important aspects of risk management.

1. Define your portfolio size

This varies from person to person, think about how much money you are prepared to lose. Cryptocurrency is risky, and there is no way around it. I strongly advise not to spend your life savings on cryptocurrencies. I think you don't want all your money to become a pile of illiquid garbage, and you don't want to lose money you can't afford, so use the money you live on to live, and don't invest too much money.

2. Define your risk appetite

Cryptocurrencies are volatile and you have to stay away from extremely risky investments to a certain extent. You have to be able to withstand the ups and downs, and many people can't withstand a 30% drop in their portfolio. If this is you, and your position is too large, I think mainstream coins are better for you than altcoins.

3. Portfolio Allocation

Your portfolio allocation will be largely based on your portfolio size and risk appetite. Also think about what goals you have, what kind of gains do you want? 2x? 10x? 100x? The more money you want to make, the more aggressive you need to be and the more risk you will have to take. If you have a lower risk appetite, proceed with caution and allocate more funds to mainstream currencies such as ETH and BTC.

Depending on your risk appetite, it is often a good idea to split your portfolio into smaller sub-portions. Allocation example:

• 40% invested in ETH, BTC, etc.

• 40% in public chains such as AVAX

• 20% algorithmic stablecoins

Your portfolio will look different depending on market conditions. In current market conditions, I do not recommend investing in high-risk altcoins. They have fallen too far in a bear market and may not recover. When the market is weak, your portfolio should be more conservative.

4. Warehouse Entry and Exit

There are two key things you must remember when you enter and exit a position.

1. Enter with a stop loss. Figure out how much you want to make from the trade. You have to stick to that to be consistently profitable. Don’t get emotionally attached to a project or token unless you have extreme conviction in it. Don’t get greedy, overtrading is usually a good way to get burned. It’s also important to keep extracting profits, and if you do that, it’ll leave you with extra room to buy other things you want to buy.

2. Don’t go all in at once. It is a good idea to spread the cost and enter in batches. Instead of investing all your money in one asset at once, it is better to divide the investment into smaller, periodic investments, which can reduce your risk and increase your chances of success.

5. Manage your emotions

Don’t FOMO, don’t get lost in the hype, don’t let crypto get you down. Crypto is a marathon, it will be around for years to come. You are an early bird, don’t waste this opportunity.

Emotions often lead to rash decisions and excessive risk-taking. Try to separate your emotions from your investment strategy. If you are unable to do this, try to rethink your portfolio allocation and risk appetite.

Risk management is difficult. It is a trading discipline and an anti-human measure. It takes time and practice, but there is no reason not to implement these strategies. They will help you improve your trading capabilities.

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