Blog 1

Milky’s Risk Management Strategy

20.12.2022


Those of you who saw my tweet from December 17th would have seen I made some strong claims. Here’s the tweet to show those who hadn’t seen it. (https://twitter.com/MilkyGemHunter/status/1603907604056604673?s=20&t=VWxnTnpLn6rjvAiMnub3JQ)

So the question you’re asking is how? How in this mess of a bear market, when everything is crashing, major CEXs and financial institutions are collapsing, can anyone protect themselves?

First there are my “Rules of Thumb”. Some of these are of my own design, some I’ve incorporated from others. The subscribers of https://milkygemhunter.io know what these are and a detailed description of what they mean for me. But for the purpose of this I will freely share this too:

  • Anything Is Possible
    • Nothing is too big to fail. The improbable is still possible.
  • Not Your Keys, Not Your Crypto
    • Custodial wallets own your crypto, not you. Non-custodial means you own the assets.
  • Verify, Don’t Trust
    • If they can’t prove what they say, don’t take them at their word. Future promises are worthless.
  • Educate Yourself
    • If you don’t understand what you are doing, you are going to fail. The onus is on you to arm yourself with knowledge and understanding.
  • Only Invest/Trade What You Can Afford To Lose
    • Rent, taxes, bills, groceries and debts come first. Don’t use money needed for these purposes to trade or invest. Only use what’s available from your “disposable income”!
  • You Are Responsible For Your Own Decisions
    • When you fail, it’s your responsibility alone. If you invest or trade upon others’ recommendations and it doesn’t work out, that’s your responsibility. Learn and move on!

So how do I apply this to minimise my risks without sacrificing opportunities?

Centralised Exchanges
First is very simple. Avoid using centralised exchanges (CEX) or anything which uses “custodial wallets”. Any crypto you hold are in these are wallets are no longer yours. You are literally and legally giving custody of your crypto to these entities to hold on your behalf. But they own them, not you. And make no mistake, every single CEX will take the crypto assets held on their platform when they suffer liquidity crisis. This may seem like theft, but when you open an account you agree to their Terms and Conditions.

They’re becoming entirely predictable in how they do this. Their Modus Operandi:

  1. Issue a public statement assuring investors they have sufficient reserves
  2. Freeze withdrawals and deposits
  3. Make a public statement they’re seeking external investment / rescue package
  4. Begin liquidation process when step 3 fails

When I first entered crypto there were almost no fiat on/off facilities outside of using a CEX. But the market has exploded with these opportunities in the last 18 months. Allowing you to on-ramp directly with non-custodial wallets. Off-ramping is a little more complicated. There’s now non-custodial providers issuing debit card facilities allowing you to spend your crypto directly. But this doesn’t help you pay the bills. Fiat off ramp to a traditional bank with standing order and direct debit utilities is still a challenge. But hope is on the way and below are four example of this:

  • Moonpay recently gained regulatory approval from the UK’s FCA (Financial Conduct Authority), which means UK registered banks will be open to allowing off-ramp to your traditional high street bank via Moonpay. Moonpay is a centralised organisation and KYC will be required. But its still a step in the right direction.
  • Scallop is a multi-chain DeFi-Powered bank. What this means? It’s a centralised bank offering all the traditional services, except your ‘bank/checking account” is a non-custodial wallet. Meaning you own and control the assets held within. This is an evolutionary stage of Fintech. Scallop haven’t launched this particular service yet as they’re waiting for a few more jurisdictions to give the stamp of regulatory approval. But now the UK has a Crypto friendly government under Rishi Sunak, and the Bahamas often follow the UK’s lead (as a Commonwealth nation with UK framework legislation) this may become a reality in the very near future. When the banking service launches KYC (Know Your Customer) will be required to utilise.
  • Fina Cash is an application of the Secret Network ecosystem, built upon the Cosmos SDK. Unlike the others mentioned this is a decentralised project and they’ve already gained regulatory approval to offer off-ramp services in the EU. Soon the UK and then the wider world. The off-ramp isn’t available yet, but again, it’s likely it will be so keep an eye out for them. Again, KYC will be required. But the data is stored in a decentralised vault.
  • Spiritz Finance offer the opportunity to use Crypto to pay your bills directly, whenever you do you earn a reward. This is only available in the US right now. I’ve not looked into this properly yet, so I’m unclear if this is viable. But worth mentioning due to the concept alone.

Now for a healthy dollop of reality for those who are against KYC. World leaders over the last 20 years or so have started to align their Anti-Money Laundering (AML) rules. Initially as a way to combat organised crime, but after 9/11 this took on a whole new meaning. Inhibiting the ability to finance Terrorism. AML will not be going away! For any organisation who offer financial services and seek to be regulatory compliant, they must adhere to AML and implement processes to that effect. KYC is that solution, where you must prove your identity and residence. So KYC will not be going away! If anything, it will become more prevalent as Crypto gains traction in adoption.

KYC doesn’t need to be bad. KYC providers built on blockchain are starting to offer zero knowledge solutions. Documents verifying identities and resident locations are kept in a decentralised vault they can’t access, and when payment providers seek confirmation, the KYC provider either gives approval, or not.

Another thing worth mentioning. Most of the traders I know consider stop-losses (SL) and take-profits (TP) as part of their risk management strategy when trading spot, leverage or futures. SLs & TPs are not guaranteed to work! During Black Swan events CEXs are notorious for shutting down due to the sudden surge of users, their servers can’t handle it. Also, if the price action is moving too fast it’s likely your SL or TP won’t action fully, or simply skip it altogether. Again, a CEXs server is not designed to handle above a certain trading volume, thus orders will skip. SL & TP are in effect a command to sell at a certain point. But for this to work it requires people buying at that price. If there’s more sellers than buyers at the price you set, not everyone’s sell order can be completed.

SL & TP can be useful tools when everything is working properly, but never bank on them working, because if you trade often enough you will suffer fails. It’s inevitable!

If you are a trader, DEX’s across multiple networks are now offering spot trading, and there’re DEX’s and DeFi protocols with perpetual futures in their roadmap or currently live. Again, proof there’s decentralised non-custodial alternatives in development, to ensure you can partake in your preferred activity, but maintain control and ownership of your assets whilst doing so.

However, there is one aspect of a CEX that is very useful, price alert notifications. For someone like me who only uses Spot to buy and sell, I may not use a CEX to complete the transactions, but I do use the price alerts to notify me when my ideal entry and sell point has been reached. Then I’ll make a market buy or sell using DEX swap. As I focus on small/micro-cap projects in the majority, I tend to use KuCoin if the token is listed on there as they have the most small/micro-cap project listings by far. But KuCoin is also limited in how many price alerts you can have active at the same time, whilst Binance has no such limitation. But for those only listed on a DEX, adding them to your favourites on coinmarketcap keep you notified of the current price, and when sharp movement of the price has occurred over the previous 24 hours. If a promising project is only listed on CEXs (no DEX listings), such as Quant ($QNT) then I’m not interested.

So, to summarise the above:

  • Complete avoidance of CEX’s and custodial wallets will be available in the near future. In the interim, never keep crypto in a custody wallet.
  • If you prefer trading on a CEX, then withdraw your crypto to a noncustodial wallet as soon as the trade is completed.
  • The utility of DEXs and noncustodial wallets has advanced considerably to enable you to avoid CEXs and other centralised entities with custodial wallets.
  • And don’t bank on SL & TP working as they should do.
  • Use CEX price alerts for ideal entry and take profit points.

Fundamentals & Education
As my core skill is Fundamental Analysis I’m certainly biased in this area when it comes to the common debate of “TA vs FA” (Technical Analysis vs Fundamental Analysis). I freely admit I have little skill in TA, though I can set trend lines to identify key areas of support and resistance I’m certainly no expert and would never offer advice or guidance to anyone in this regard.

One of the key differences between FA and TA is mental health. TA is more exciting, the chemical process in the brain is exactly the same as what gambling addicts experience. The most experienced and skilful TA’s can nullify this ‘high’ and dissociate themselves from the emotion. But that’s a miniscule percentage of people who actively practice (or try to) Technical Analysis as a Day Trader. So for better mental health to avoid those highs and lows, and the stress, anxiety and depression which often comes with it,  focusing on the fundamentals of a project is a key advantage.

If you’re seeking to build a portfolio for a long term strategy then FA is where you should focus. My subscribers have access to educational articles and videos to help guide how to conduct fundamental research. Those of you who’ve read my articles will know I focus on 11 specific areas:

  • The Network
    • Relevant when it comes to fees & speed of transactions, security of network
  • Security Audits
    • Vitally important to ascertain how secure the protocol is.
  • Unique Selling Points
    • Such as the Concept and whether it brings a needed and unique ‘Solution’
  • The Team & Advisors
    • If the team are anonymous you can’t ascertain their skills, qualifications or history. If the team are anonymous and haven’t completed a KYC audit with a reputable auditor, that is a potential cause of concern.
  • The Partners & Investors
    • The more ecosystem partners there are, usually a positive indicator. Especially if they have a tangible utility benefit for users.
  • The Roadmap
    • Are the team completing targets? Are they showing long-term ambition? Are the targets realistic?
  • The Tokenomics
    • Is the economic structure of the protocol sustainable and realistic?
  • The Community (such as social media engagement and following)
    • Is the community strong enough to keep liquidity in the protocol even during tough times such as a bear market? A strong community can keep a project alive where better projects fall.
  • The Information Sources (such as the Whitepaper)
    • Are the team transparent and provide readily available sources of information of sufficient detail; To allow potential investors to make an informed decision?
  • The Listed Exchanges
    • If you’re interested in the project as an investment, it’s worthwhile knowing the options you have where you can swap, trade, buy and sell.
  • The Accessibility and Ease to Buy/Sell
    • Access to some protocols is more complicated than others. Understanding exactly how you can enter and exit is very important. Not all options may be available for you, often dependent which country you live in.

By focusing on the above areas in your research you’ll gain a good grasp of understanding about the project and whether it has a potential long term future, and thus make an informed decision. If I had to choose three key areas of research it would be the team (are they skilled and have proven history of success?), the concept (does it offer a solution otherwise missing?) and the tokenomics (is it sustainable and growth friendly?).

However, like anything worthwhile it’s not simply as easy as that. You’ll have to educate yourself in many areas such as tokenomics and how blockchain works. When I started, I dedicated at least 10 hours per day to this endeavour and it took me around 10 months to gain a core grasp of understanding sufficient enough to make informed decisions. A further 16 months later, I’m still learning. And this is very important to understand, it’s impossible to know everything. You need to be open and willing to learn continuously. You don’t need to be an expert, but understanding how to research fundamentals of a project will help you identify possible scams. TA can not help you here. In a bear market FA is invaluable. In a bull market TA is more useful as bull runs occur when inexperienced investors and traders jump on the hype wagon and push the price up. This is ‘FOMO’ (Fear of Missing Out). FA won’t help you know when to take profits before the surge inevitably crashes, but TA could.

The best investors incorporate both, use FA to identify the right projects to invest in, then use TA to find their ideal entry and exit points based on a mathematical model.

When I first started out my favourite place to learn about the basics of crypto fundamentals was The Coin Bureau. His content is free on YouTube, as well as an email newsletter he sends out. As previously mentioned I also offer educational content. Initially tailored to beginners I’m expanding to include content for more advanced users capable of accessing a wider variety of protocols.

Diversification
There’s a saying in England, “don’t put all your eggs in one basket”. In laymen’s terms, don’t risk everything in one trade or invest in one project. Diversifying your investments will limit the impact of a trend coming to an end (such as NaaS [nodes as a service] & collectible NFTs), a project rugpulling scamming, failing, being hacked or any other number of things which can happen.

Risk needs to be spread, not just between different projects, but also between different networks. If a network suffers a hack or fails then everything built upon that network is also at risk. Terra, Solana & Qan Network are the proof of this. Terra’s fall precipitated the first Black Swan event of 2022. Solana has suffered multiple outages due to it’s poor security. QAN Network was hacked with 99% of it’s liquidity drained. Now Ethereum is Proof of Stake (PoS) it also means its security is less robust (Proof of Work [PoW] is generally more secure than PoS). Should Ethereum suffer a serious hack then a lot of networks built upon it (EVMs) may also suffer to varying degrees. For those scoffing at the possibility of this remember rule #1; “Anything is Possible”!

I have investments in projects on Ethereum (EVM), BNB Chain (EVM), Polygon (EVM), Avalanche (EVM), Algorand (Non-EVM). I have plans to enter into projects built upon Elrond (Non-EVM), Cosmos (Non-EVM), Solana (Non-EVM) & Secret Network (Non-EVM).

Another helpful tool is calculating the total amount of investment capital you have, splitting it into proportions (low risk/mid risk/high risk) and then strategizing your investments based on market cap ranking. So for example 50% low risk; 30% mid risk; 20% high risk. I used to do it this way, but no longer. I’m confident enough in my research skills that this approach no longer has relevance for me.

Another good way to diversify is across different asset types. So invest some in network coins, some into utility-based NFTs, some into infrastructure projects, some into enterprise services, some into entertainment etc.

However you decide to go about it, just make sure you are diversified in some manner!

Passive Income
For me passive income is the golden opportunity in Crypto, but DeFi protocols such as this are also the highest risk of scams. So fundamental research is more important for this sector than any other. Pay particular attention to the tokenomics and whether the rewards are sustainable, and there’s sufficient liquidity to pay rewards.

The biggest advantage of finding the right passive income opportunities… Even if your token has tanked 90% since you bought it, but you’re continuing to generate passive income then you’re still gaining something of value which will benefit you should the token price recover.

When it comes to DeFi there’s multiple ways to generate passive income:

  • Single sided staking
  • PoW Mining
  • Network Validators
  • DEX Liquidity Pools
  • Farming
  • DaaS (DeFi as a Service)
  • NaaS (Nodes as a Service)
  • Utility NFTs
  • In-game rewards
  • Airdrops
  • Perp yields (lending and borrowing – for advanced experienced users only! I don’t touch this personally)

There’s probably numerous other methods of earning passive income in Crypto, but I can’t think of them right now.

Utility NFTs for me are the most intriguing opportunity for passive income. For example, Ghost Trader ($GTR) sells an NFT. The NFT is like an investment account. The purchase of the NFT goes into a hedge fund which is used to fund off-chain trading. A share of the profits are distributed to the NFT holders each month, where they can cash in or compound to increase their share in the hedge fund (thus increase future rewards). For your information Ghost Trader is perhaps one of the greatest success stories of this bear market with 12 consecutive months of trading profits (even during the black swan events this year with Terra and FTX). My full report on Ghost Trader is available for my subscribers. But the true value of NFTs hasn’t yet been realised. The potential concepts in the future are almost limitless.

Single sided staking are the easiest to access. Some like Verasity are very simple, just a click of a button. Others are DPoS protocols such as Harmony, where staking is actually ‘delegating’ your tokens to a ‘validator’ to supplement their protocol activity, and they share some of their network rewards with you. The question you have to ask, can they afford the rewards they promise? Researching the tokenomics may help you answer this.

DEX LPs generally offer a more diversified option of collecting passive income. For example; You could submit 2 tokens into a pool, but receive a 3rd. Telcoin’s TelX is an excellent example of the diversity of LPs. You need to read the detail of the LP to understand what the required tokens for entry are, in what proportion, what reward you receive, how often you receive your reward. A serious risk of LPs is “impermanent loss”. As such I only enter LPs with two tokens, one of which is a strong stablecoin such as $BUSD or $USDC.

I’ve not personally entered into any blockchain based games. So I can’t advice if the level of rewards are usually worth the time it takes to generate the rewards. However if you enjoy gaming then it could be worth looking at gaming projects which are “Play and Earn” rather than “Play to Earn”. The difference is the enjoyability of the experience. Of all the gaming projects I’ve seen, the one I’m most excited about is The Unfettered. I believe it will be a true AAA gaming experience, it will be listed on Steam (for PC gamers) and can be enjoyed on-chain and off-chain, encouraging mass adoption of blockchain gamers and traditional gamers. Other worthy notables include Star Atlas ($ATLAS; which recently won GAM3 best gaming graphics award) and Starlink ($STARL) which is a game in continuous development.

I don’t enter into Projects just to receive an airdrop. Far too many airdrops are exploits, designed to drain your wallet when you try to move them, swap them or sell them. If going for airdrops is your thing, good luck. One day you’re likely to get burned for it. But if you insist on going for airdrops then create a wallet specifically for this purpose and don’t use it for anything else. That way if one of the airdrops you access is an exploit, you’ll lose nothing you’ve put money into.

As for mining and validator work, I simply don’t have the time to consider either of these a viable option. But for those out of work, have a powerful computer and some technical knowledge then these could be an opportunity for you.

NaaS has died a death this year. Strong was the daddy of this, but all concepts have proven Ponzinomics are not sustainable (where new users entry are used to pay rewards for current users). I entered into a couple myself, but took out my initial investment and made some profit. So although the projects are struggling I’ve not personally suffered for it. But anything new of this type I’ll be avoiding completely. This is the advantage of bear markets, it takes out the trash!

As a final point of this its important to acknowledge something, if it doesn’t have utility, it doesn’t have tangible value. It’s as simple as that. This is why I have never, and will never enter into the “Collectible NFT” market. I’ve even refused free giveaways. Those Bored Apes and Crypto Punks (and all the others trying to capitalise on the bandwagon) may hold some numerical value for now, but those trends will end and the holder will realise they paid for nothing more than a piece of low quality pictures issued as an NFT. The value of these pictures are purely in the eyes of the beholder. They do nothing & offer no solution. If anything, based on data I think the trend is coming to an end already. So if you’re a holder of one of these, you might want to research the market conditions and see if there’s sufficient interest to offload your jpeg.

Wallet Security
As the above areas of this publication have made clear I limit my activities exclusively to DEXs. I also invest in a number of small/micro-cap projects and pre-launches. These areas are where the majority of scams are located.

The success of these scams vary, but one of the most common is where they provide a contract address, which you add to your wallet. But this contract address may contain an exploit to drain your wallet dry. This happened to someone very close to me last year and no doubt some of you reading this may have experienced this too. How to prevent this from happening…

  1. If it’s a new project (especially at pre-launch stage), do not under any circumstances trust a contract address they post on their website and/or Discord, or other social media. Only source contract addresses from Coinmarketcap (CMC) and/or CoinGecko (CG). They independently verify the contract addresses before listing them. If the project’s contract isn’t listed, walk away.
  2. When adding a token to a DEX to trade/swap, again only source the token contract address from CMC or CG. Those which show up on DEX search results are sometimes a scam as DEXs rarely monitor what’s listed on their platform.
    1. This is an advantage CEXs have over DEXs, as everything listed on a CEX is first verified.
  3. When you’re no longer utilising a protocol, revoke your permissions. Below are some protocols which offer this utility.
    1. https://revoke.cash/
    2. https://debank.com/
    3. https://everrise.com/everrevoke/
    4. How to revoke: https://www.youtube.com/watch?v=wb8nNKhkSyg
  4. If you’re using a browser extension hot wallet (such as MetaMask) make sure your browser is always updated

When it comes to wallet security remember some very useful tips:

  1. Never give your seed phrases to anyone!
    1. Divorce rates in most western developed nations hover around 50% so keep this in mind. If you do trust your spouse, consider opening a backup wallet they don’t know about just in case. Then should things get dicey, withdraw to the new wallet.
    2. FortKnoxter and Serenity Shield offer inheritance solutions. So if you die or become incapacitated your seed phrases can be passed to your next of kin or chosen charity.
  2. Backup your seed phrases on an encrypted hard drive, and keep a hard copy somewhere safe.
    1. Try not to write down on paper as it’s too easily damaged. Instead you can buy steel backup phrase tablets on Amazon or other merchants. These are pricey and only good for one seed phrase each. But as a long term investment absolutely worth it! Then make sure you lock it in a safe!
    2. Never keep seed phrases on your computer, or on a centralised cloud server such as OneDrive, Google Drive etc.
    3. I use AxCrypt as a decentralised non-custodial cloud storage solution. It’s a paid service but well worth the investment. If you’re interested in a referral for reduced fees then please email me at milky@milkygemhunter.io
  3. Wherever possible try and use hard/cold wallets, instead of soft/hot wallets
    1. My personal favourite is the Lattice1 by Gridplus. But Trezor Model T and Ledger Nano X are also highly recommended.
  4. To improve security of soft/hard wallets make sure you have anti-malware, firewall, anti-spyware and a VPN installed on your computer or device.
  5. You'll see lots of people on social media sharing "free" giveaways and asking you to post your wallet address. 99.99% of these are scams. Although unproven I also believe many of them are government run accounts so they can log and file wallet addresses. But for others, it gives hackers a target. So my recommendation is to play it safe and never share your wallet address on any public forum.

HODL or Cut Losses? When to Take Profit (TP)?
This will probably be the most controversial section of the publication. But this is what I do and thus far it works for me.

When I enter a project I research it thoroughly before making an investment decision. I know in advance I won’t get all of them right. But to build generational wealth I don’t need to get all of them right, just enough of them.

For most people bear markets are a nightmare. For me they’re a Godsend! It’s during bear markets true wealth is made.

As such, when I enter into a project I invest with a long term strategy in mind. If I invest in something valued at $1 per token, and it drops to $0.10 per token in a bear market. I do not sell, I buy more. This reduces my average purchase price, so when the token price recovers (if it does) then my profit margins will be significantly increased.

Also this strategy is perfect for mental health, short term market volatility doesn’t affect me like it does so many others.

Now there are many who disagree with this, they believe you should cut your losses and look for new opportunities. Thus they see it as “Opportunity Loss”. Me, I see it as “Unrealised Losses”. A loss is only realised when you sell. Certainly the risks of this approach are high, not even Bitcoin is guaranteed to survive long term, nothing is. But I do sincerely believe in blockchain technology and it’s inevitable adoption by mainstream Enterprise. This is why I do such thorough research before entering. If the fundamentals check out for me, and I believe it has a real chance of a long term future I will enter, HODL (hold on for dear life) and buy more when the markets dump.

However, during stages of a bull market I will TP (take profit) on projects I’ve entered into. If only to take out my initial investment (which I then usually reinvest elsewhere). When $LUNA, $TEL, $ADA and $SOL did their crazy parabolic moves in 2021 I took profits from them and entered into other projects, diversifying my portfolio.

Thankfully I TP on $LUNA before the Terra collapse a few months later. I was not personally affected, so my claim of never being rugged still stands as a result.

Wonderland $TIME was a major failure of mine. A grotesque lack of due diligence. Something I rated highly and others entered into as a result. Thankfully I managed to take my initial investment out from the rewards before it all went tits up. So again my claim of never being rugged stands, but this was more luck than anything else. But others invested as a result of my rating weren’t so lucky, and although everyone is responsible for their own investment decisions I did everything I could to keep my community informed what was going on because I felt guilt. It’s a regret I carry with me still, which was a driving factor to creating my FA Report Template so I’d never inadvertently miss anything crucial again in the future.

My claim may soon be coming to an end though. I entered into Apex Nodes almost a year ago, which became Apex Foundation and the promise was sensational. I’ve not yet taken out what I’ve put in, but after numerous terrible decisions by the Leadership, the project is struggling to survive. Its not yet over for them though, thankfully they’ve made some drastic changes, new leadership has stepped in and got rid of the deadwood, and formulated a dedicated strategy to build their DEX Swap on AVAX. I was ready to walk away and consider it a lost investment. I won’t be putting anymore liquidity into it, but their revised tokenomic model of shared distribution of fees generated from the DEX swap may yet see a good return on my investment. But we’ll see how it goes. If it doesn’t work out, that’s ok too. I never put in more than I could afford to lose.

But for me one of the main questions I still ask myself sometimes is when do I take full profit of an investment and walk away? The answer is relatively simple. When a market is saturated; future growth of a project is stymied by competition; and the project isn’t offering anything new to put them ahead of their competition, that’s when to cash out and walk away.

And this is crucial to keep in mind! Sometimes you have to accept you made a bad call, walk away, accept the loss, learn from your mistakes and move on. Do Not Let It Get To You!!

When the next bull run happens (however long it may take, but it will happen) I’m also considering another strategy, as this would be my first experience of going from a bear market to a bull market in a full cycle so I’d like to try something when this happens. I monitor the average cost per token of my investments on a spreadsheet. So, when an investment reaches 10x of my average buy price, I will take 25%. If it reaches 25x I will take another 25%. If it reaches 50x I’ll do the same again, and at 100x, 150x, 200x, 250x, 500x, 750x until it gets to 1000x where I’ll take 50% of what’s remaining at least. If I feel there’s still a long term future of strong growth for it I’ll keep the rest in and let it tank into the next bear market where I’ll start the DCA again. This isn’t set in stone yet, just an idea I’m considering. A good one I think but we’ll see. Plenty of time before the next bull market comes about though I reckon to get this idea firmed out.

Now a Risk Management strategy for day traders probably should be set in stone, as their work is more mathematical. But a Risk Management strategy for long term investors needs to be fluid. Changes happen all the time, especially in Crypto more than any other market, and if you don’t adapt then you will probably fall behind and fail.

Summary
To summarise the above I’ll just highlight the key points of my Risk Management strategy:

  • Set firm rules for yourself to abide by no matter what – such as my “Milky’s Rules of Thumb”
  • Avoid CEXs, or anything custodial or centralised in nature, wherever possible
  • Don’t bank on SL or TP orders from working as they should, especially when it matters most
  • Only fundamentals will help you avoid scams and poor projects
  • Verify contract addresses on CMC or CG before using them
  • TA can operate with FA to maximise your earnings – but TA should never supplant FA for long term investing
  • Use a bear market to identify sustainable passive income opportunities – passive income is King!
  • Zero utility = Zero tangible value
  • Diversify your investment portfolio
  • Secure and backup your non-custodial wallets
  • Never share your wallet addresses on a public forum
  • Device a long term strategy which works for you
    • Do you HODL or Cut Losses?
    • When do you TP?
  • Learn to accept losses and walk away – Because it will happen!
  • Be adaptable to change

And that Ladies and Gents is the Risk Management strategy I’ve used with proven success. Use it, or don’t. The important thing to remember is, make sure you have a Risk Management strategy which works for you!

If you’ve enjoyed this content please take a look at https://milkygemhunter.io. We offer a subscription service where you can access over 70 FA Reports (with at least one new report per week); Educational articles and videos; special areas dedicated to my personal altcoin picks; promising pre-sale opportunities and more products to be rolled out throughout 2023.

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Milky, your Gem Hunter