The 5% Rule: Why Over-Risking Can Destroy Your Portfolio

Behavior: Risking an excessively large portion of your capital (e.g., 10%, 20%, or more) on a single trade.$XRP

Consequence: Recovery becomes extremely difficult.

A 20% loss requires a 25% gain on the remaining capital to break even.$BTC

A 50% loss demands a 100% gain just to return to your starting point.

Result: Overexposure accelerates account drawdown and increases emotional stress, often leading to poor decision-making.$SOL

Better Approach: Limit risk per trade to 1–5% of total capital, apply stop-loss orders, and maintain a disciplined risk management plan.

#CryptoRisk #TradingStrategy #PortfolioManagement #RiskControl

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