Risk Management Basics

What you’ll learn

• •Risk management isn't about eliminating risk (impossible) — it's about understanding it, sizing it, and avoiding irreversible harm.
• •Only invest money you can genuinely afford to lose entirely — never essential living costs, emergency savings, or debt repayments.
• •Position sizing: keep a deliberately limited, defined slice of your overall wealth in a higher-risk asset class.
• •Avoid borrowed money and leverage (including DeFi leverage from Day 41) — it changes a survivable outcome into a damaging one.
• •Decide in advance, calmly, how you'll react to gains and losses — don't improvise a plan mid-swing.
• •Security practices from Week 2 are risk management too — theft and mistakes are real, often more preventable losses.