Diversification can help minimize risks in trading from "summary" of Reminiscences of a Stock Operator by Edwin Lefevre
Diversification is a key strategy that traders can employ to protect themselves from potential risks in the market. By spreading their investments across a variety of assets, traders can reduce their exposure to the fluctuations of any single stock or sector. This approach allows them to avoid putting all their eggs in one basket, so to speak. In the world of trading, risk is an ever-present factor that can lead to significant losses if not managed properly. By diversifying their portfolio, traders can help mitigate some of this risk and safeguard their capital. This strategy is based on the principle of not putting all of one's resources into a single investment, as doing so could result in catastrophic losses if that investment were to perfor...
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