Portfolio risk management

Risk management at the portfolio level means thinking about all your holdings together, not trade by trade.

Diversification in crypto is weaker than it looks: most coins move with Bitcoin, so holding ten different coins is often one big bet, not ten small ones. True diversification means not having all your wealth in crypto at all.

Decide in advance what share of your total savings crypto should be — for most people, a small single-digit percentage. Within crypto, decide how much is long-term holding versus active trading, and keep them in separate accounts or wallets so a bad trading week can't touch your long-term holdings.

Finally, plan for the extremes. Crypto has fallen 70–80% several times in its history. If a drop like that would force you to sell or affect your life, your position is too big — whatever the charts say.