Course 10

Analyze your risk in crypto and have options

What you will learn:

  • Have a macro picture of your risks

  • Always expect the worse to happen




If you are trading or trying to do so with algos, most of you are doing it in order to make money. Always keep in mind that anything you learn and create is an improvement of yourself and just with that you should be happy. Evidently, getting money is great too – I am here for money too. But I am happy to learn and grow too.

You should always look at and identify the risks around your activity of trying to make money. What I mean is, if you are building something around crypto, you should not put all your eggs in the same basket.

  • Don't put all your money into a Degen play, that you understand.

  • Don't put all your money into 1 trade, that you may understand.

  • Don't put all your money into a "safe protocol", that is harder to understand because it is supposed to be low risk right? (example here LUNA/UST).

  • Don't put all your money into 1 exchange, this is even harder to understand. My point is anything can happen: they can rug someday for some legal reasons.

I am personally a big fan of putting ALL eggs in one basket on many many things in my life, because high risks = high rewards. And, as long as I don’t risk my life, then everything else is just not important. You can lose all your money, then you simply have to go get it back. But if something happens to you, then you’re gone.

SO – back to our subject, you can start trading with all your eggs in this basket, but at some point, it is good to diversify just a little bit. It doesn’t mean to buy the top 50 coins on market cap, it means to maybe have a little money into trading, a little money into a farm/node/reward protocol, something that will earn on a regular basis without you having to touch it, and then maybe some into a high risk degen project.

You can do 50-25-25, you can also do 50-40-10. Or 33-33-34 in each. The goal here is to limit the loss should something absolutely bad happen.

I explain.

When you make progress on something, for example let’s say you develop your own trading system and it works out, I don’t recommend just sleeping on it. I would recommend to enjoy for a little but then go back to work, and grind hard on something else, which will allow you to “spread” the risk.

The reason why is because you should always expect the worse to happen: Trading View is shutting down. Your account on TV gets hacked. The bot platform disappear and you can’t run your bot anymore. Crypto trading becomes illegal in your country, etc. These things can happen! You have to be ready for that.

The other day I read about this guy losing $10m on a specific protocol I won’t name. He lost it because he was overleveraged. This guy must be smart because he’s up $10m, but to me having $10m into a high risk degen project AND using leverage on it, it's way too crazy.

One thing would have been good: spread his risk into another investment class. I mean, $10m (lol)! He could take just 20% of that, and buy a real estate asset. He could have another 20% into a stable farm that earns APY %. I just don’t get it. Or maybe he does have all these things and this $10m was just 10% of this net wroth.

Long story short, please look at your crypto activities and make sure you have a plan B for each of them. Here are some examples for you:

- For metamask users, utilize a ledger.

- For nodes people, use several metamask in case one of them gets hacked – have a ledger for each of them. By the way, if you read this, I have a guide on about to transfer your Metamask into a ledger.

- Constantly look for new projects/new opportunities, in case your current degen play disappears.

- Develop a trading system that works on multiple bot platforms.

- Consider hiring a developer to code your strategy with a simple local bot (if you have the money, why not?).

- Develop different trading strategies – this is very important, because if one of them stops working, then you won’t have to go back to the drawing board.

- Spread your funds on different exchanges.

So, to come back to the earlier question: can I predict the future? The conclusion is no, but what I can do, is to keep thinking, creating and developing algos, systems, strategies, to make money, so that if one of them stops working, I have the safety ones on the side!