Trading a wide range of assets can feel like the smart, ambitious move. Every day, headlines scream about some new coin or stock breaking records. For amateur traders especially, it looks like an open invitation: “Your strategy is working—why not test it somewhere else?”
whether you are using a lending protocol, trading spots or perps
I’ve learned the hard way that this mindset is usually a mistake.
One of the most valuable lessons I’ve absorbed is that there will always be good opportunities you miss. Accepting that fact has been genuinely game-changing. In trading, capital is king. Protecting it is your first job.
The Circle of Competence Matters
Warren Buffett’s idea of the “circle of competence” applies perfectly here. Limiting the number of pairs or assets you trade is a core part of solid risk management. The market only moves in two ways:
- With a clear trend
- Sideways
When you stay inside your circle, you don’t just execute your strategy—you start to understand how those specific assets behave. You recognize when something is likely to keep running and when the eventual pullback or reversal is approaching.
My biggest temptation to expand beyond that circle usually comes from impatience. I’ll think: “My edge is automated. It’s not firing on my usual pairs right now… why not try something else?” On one occasion, that logic cost me.
What Happened When I Stepped Outside
I started analyzing the daily top performers and shorting them. My observation was that they often pulled back aggressively. It looked like easy money. Reality was different:
The volatility in those crypto assets was far higher than my capital and leverage could handle. I would enter with confidence and get stopped out before the real move happened. Frustration mounted.
That led me to the next “smart” idea: chasing tops and bottoms. If I wanted to go long, I tried to catch the exact bottom. If I was shorting, I needed the precise top. It was pure guesswork, and my account kept bleeding.
Then came the dumbest experiment of all—shorting newly listed futures contracts. New listings often rally hard in the first day, week, or month, then eventually cool off. So I would short on the second day. You can guess how that played out.
The Real Point
Mastery in trading isn’t just about having a good strategy. It’s about sticking to a small group of assets where that strategy can actually work. When you stay focused, you develop a feel for the instruments you trade. You understand their rhythm.
I was taught to limit myself to a maximum of around 10 assets. That number isn’t sacred—you can expand later—but only after you’ve studied a new asset thoroughly. Throwing money at something you don’t deeply understand is a fast way to lose.
Staying disciplined and streamlined also protects you from exhaustion. Spreading your attention too thin is its own form of risk.
Protect your capital. Respect your circle of competence. Miss some opportunities on purpose. In the long run, that restraint is what keeps you in the game.
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