6. Staking & Yield Farming (Earning Passive Income)

· Philosophy: Put your existing assets to work to generate passive income, similar to earning interest in a savings account.

· Best For: Long-term holders who want their portfolio to grow without selling.

· How to Execute:

· Staking: Lock up your coins to help secure a Proof-of-Stake (PoS) blockchain (e.g., Ethereum, Cardano, Solana). In return, you earn more coins as rewards.

· Yield Farming: Lend your crypto assets on DeFi platforms (like Aave, Compound) to borrowers. In return, you earn interest, often paid in the platform's native token.

· Risk: Impermanent Loss (for liquidity pool farming), smart contract risk (the code could have a bug), and platform risk (the protocol could be exploited).

Essential Rules for Any Strategy:

1. Emotion is Your Enemy: Greed and fear are the biggest reasons traders lose money. Stick to your pre-defined plan.

2. Risk Management is King: Always use stop-losses. Never invest your "rent money" or life savings.

3. Not Your Keys, Not Your Crypto: For long-term holdings, use a hardware wallet. For active trading, keep only what you need on reputable exchanges.

4. DYOR (Do Your Own Research): Never buy something just because someone on the internet told you to. Understand what you are investing in.

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