Greetings crypto traders whose Friday was not a cheerful day. I need to tell you that there will be better tomorrows. While the tunnel may seen dark, there can be bright days in front of you depending upon how you respond to your present circumstances. If your finances were severely injured this past week in crypto (or even equities) allow me to share with you the same advice I routinely share with my private community of traders. Wealth - real wealth that is secure and lasting - does not come from "bet the farm" speculative bets. Real wealth comes from accepting investing as a marathon, not a sprint. Real wealth comes from controlling risk, not from taking huge gambles. Real wealth comes in the accumulation in small pieces, gained, then protected. I love that the younger generation to which you belong has taken an interest in speculative markets such as crypto and futures. Welcome. This is the arena I have operated in now in the 6th different decade starting in the 1970s. I wiped out several accounts in the early days. These are not fond memories. But I kept at it. For me I learned how to control my risk. What does that mean exactly? Well, for me it means to limit my risk on any given bet to no more than 1% of my total pot. I know that sounds too tame to be meaningful, but if you do not want to go through what you experienced this past week, then perhaps it should be meaningful. It also means that I do not bet any more than 3% of my entire trading capital on the composite of highly correlated bets. I have noticed that some in the crypto space wear as a badge of honor that they can sit through 80% drawdowns. Well, that is NOT a badge of honor. It is a crown of shame. Anyone who thinks lightly of 80% drawdowns will end up rekt at the end of the game. If you doubt me, then stay on your present course and find out. It also means that leverage is a wonderful tool, but it can be a weapon you turn back upon yourself. As a rule, I never want to be leveraged against my total account by more than 2X -- and then only when I am diversified in assets that might be negatively correlated. So, I encourage you. Take this past week as a serious lesson of investing and of life. Take ownership of your mistakes. Don't blame this past week on some "whale" or manipulator. Own it. And move forward having learned some valuable lesson.
