tradingturnover

Post 19 | Trading 59 Coins Was Not Diversification: 61.29% of Turnover Sat in Four Markets

I traded 59 pairs during the month, which looks diversified at first. Sorting by notional turnover shows a different picture: $RIVER
about 160,377.70 USDT, $ETH USDC futures about 105,893.46 USDT, $VVV , and $BTC USDC futures about 81,235.79 USDT.

Together, those four markets generated about 434,348.69 USDT, or 61.29% of the total 708,711.29 USDT turnover. A large number of symbols does not mean that risk or transaction costs are evenly distributed. The account result was still dominated by a few high-turnover markets.

False diversification creates another problem: every new symbol has different liquidity, maintenance-margin brackets, funding, spread, and news risk. When trading is too fast, adding symbols increases breadth but not research depth.

A more useful review uses three percentages for each symbol: share of turnover, share of fees, and share of net PnL. If one symbol repeatedly combines high turnover with high losses, reduce its trading frequency before adding a 60th market to "diversify" attention.

Based on my own trading data. Not financial advice.

#ConcentrationRisk #TradingTurnover #Diversification #FuturesReview #TradingDiscipline