Risk Management
💀 1. Risk What You Can Emotionally Lose
If losing it ruins your sleep, it’s too big of a bet. The best degens survive because they stay in the game. Always keep your “mental bankroll” — your ability to think clearly after a red candle — intact.
🧮 2. Set Position Sizing Rules
Never go all in, no matter how strong the conviction. Think in risk units, not dollars. Example: risk 1–2% of your stack per play, not per narrative. That way, one rug doesn’t end your season.
🕹️ 3. Diversify by Conviction Type, Not Token Count
Holding 10 random coins ≠ diversification. Hold different play types:
Narrative bets (AI, gaming, L3s)
Liquidity rotation plays (bridges, memes, NFTs)
On-chain momentum (new deploys, whale wallets)
Each behaves differently in a downtrend.
🧠 4. Plan Before You Ape
Have an exit plan before entry:
Where you take first profit
Where you add
Where you cut losses
If you decide these in the moment, emotion wins. If you decide them before entry, math wins.
🧩 5. Never Average Down a Degen Play
If it dumps 60%, there’s likely new information — not a discount. Averaging down only works in sound assets, not in casino coins. Degens survive by cutting quick and reloading faster.
🧱 6. Build Cash Positions as a Weapon
Dry powder = optionality. Every correction creates asymmetric setups. Those who overexpose early miss the bottom entries. Be patient, not paralyzed.
🕵️ 7. Respect Smart Money, But Don’t Copy It Blindly
Track wallets for insight, not for orders. Use them to understand behavior — entries, conviction sizes, exit timing — not to mirror moves. Conviction ≠ copy.
⚖️ 8. Leverage Is a Double-Edged Meme
Leverage turns good traders into legends — and legends into ghosts. Only use leverage when:
You have high conviction
You’ve sized the position like it can go to zero
You’ve accepted liquidation as tuition
⏳ 9. Remember: Time in the Market > Timing the Market
Being early is often the same as being wrong… temporarily. If your thesis is solid, let it play out. But if the meta shifts, adapt fast — narratives die faster than block times.
🔒 10. Protect Your Capital Like It’s Sacred
Everyone celebrates 10x wins, but the real flex is longevity. Most who make it in crypto aren’t the smartest — they’re the ones who didn’t blow up. Capital gives you the right to keep playing the game.
Bonus: 🩸 Degens Don’t Die, They Respawn
Every cycle wipes out the greedy and rewards the disciplined. Risk management isn’t about being safe — it’s about staying alive long enough to catch the next asymmetric bet.
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