🔥Risk MANAGEMENT 🔥 in cryptocurrency is all about strategies and practices to protect your investments in an extremely volatile market. Because crypto prices can swing wildly — much more than stocks or bonds — it's critical to have a plan.

Here are some key risk management practices in crypto:

1. Only invest what you can afford to lose

Crypto is high risk. Never invest money you need for essentials.

2. Diversify your portfolio

Don't put all your funds into one coin. Spread investments across different cryptocurrencies and sectors (e.g., DeFi, gaming, Layer 1s).

3. Set stop-loss and take-profit levels

A stop-loss automatically sells if the price falls to a certain point, limiting your losses.

A take-profit order sells when you hit a profit target, securing gains.

4. Position sizing

Don’t risk too much on a single trade. Many traders risk only 1–2% of their portfolio per trade.

5. Use cold storage for long-term holdings

Keep coins you’re not actively trading in hardware wallets to protect against hacks.

6. Avoid leverage unless you're experienced

Leverage can amplify gains and losses. Many beginners get wiped out using it.

7. Stay informed about regulations and risks

Crypto regulations are changing fast. A ban or major policy shift can crush markets overnight.

8. Regularly rebalance your portfolio

If a coin grows and becomes too large a part of your portfolio, consider selling a portion to maintain balance.

9. Beware of scams and phishing

Scams are rampant. Always double-check URLs, emails, and projects before investing.

10. Have an exit strategy

Know when and why you will sell — whether it’s based on price, time, or market events.

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