Risk, Security & Planning
Trading is risky. This guide helps you protect capital, accounts, and mental bandwidth before scaling up exposure.
Account security checklist
- Enable hardware security keys (FIDO/U2F) or app-based MFA on every exchange or broker login.
- Use a password manager; never reuse passwords across services.
- Store wallet recovery phrases offline. Test backups before you need them.
- Whitelist withdrawal addresses where possible. Monitor for any changes.
- Keep operating systems, browsers, and wallet firmware updated.
Phishing alert: Bookmark official URLs. Double-check signatures on wallet transactions. Support teams will never ask for your seed phrase.
Capital allocation rules
- Separate funds into buckets: living expenses, emergency savings, trading capital.
- Only trade with money you can afford to lose.
- Set a maximum portfolio drawdown (e.g., 15%). If breached, pause and reassess.
- Limit correlated exposure (e.g., not all trades in the same sector or leverage).
- Use stablecoins or fiat to park unused capital; avoid idle exposure to volatile assets.
Building a written trading plan
- Goals: Clarify why you are trading (income, learning, long-term growth).
- Strategy selection: Document criteria for choosing strategies from the platform (score threshold, profit factor, trade count).
- Execution rules: Define entry triggers, order types, position sizing, stop/target logic.
- Risk limits: Daily loss limit, max open trades, leverage limits.
- Review process: Schedule weekly and monthly reviews, metrics to track, who holds you accountable.
Template idea: Keep your plan in a shared document. Include checklist boxes so every trade follows the same steps.
Emotional management
- Use a checklist before entering a trade to avoid impulsive decisions.
- Step away after consecutive losses. Reset rather than revenge trading.
- Track sleep, stress, and distractions in your journal; they impact performance.
- Celebrate following the plan, not just winning trades.
Regulation & taxes
- Crypto taxes vary by country. Consult a licensed professional early.
- Log every trade and transfer. Export history regularly from exchanges.
- Understand your jurisdiction’s reporting thresholds for foreign accounts.
- Stay informed about new regulations that could affect access or leverage.
Next steps
- Combine this guide with Trading Fundamentals to create your personal rulebook.
- Print your security checklist and store it with your hardware wallet.
- Review the Glossary for any compliance terms you encounter.