Written by: David G, Moonshot Consultant
Compiled by: Yuliya, PANews
This article is a practical guide on how to profit in a cryptocurrency bull market while avoiding risks. It elaborates on trading strategies and risk management methods from three core dimensions: portfolio structure, leverage use, and on-chain trading.
1. Investment portfolio structure
The construction of the investment portfolio needs to be adjusted according to the scale of funds, but there are several core principles to follow:
Focus on high-quality collateral
It is recommended to focus on high-quality assets like BTC and SOL;
Switch to stablecoins during volatile or bear markets;
In a bull market, use profits to supplement positions in mainstream cryptocurrencies;
Dynamic adjustment strategy
Currently maintain nearly 100% allocation in BTC and SOL;
As the bull market cycle progresses, gradually increase the proportion of stablecoins;
2. Leverage usage guide (beginner's advice)
Set aside traditional views on leverage from social media and see leverage as a tool to improve capital efficiency.
Differentiate treatment
The leverage strategies for mainstream coins and small-cap coins should be completely separate;
Using leverage on SOL is completely different from using leverage on a 500M market cap token;
Basic principles
The total leverage for small-cap cryptocurrencies should not exceed 1x (e.g., $100,000 SOL as margin, the long position in altcoins should not exceed $100,000);
Mainstream cryptocurrencies can use 2-5 times leverage at specific times;
The higher the leverage, the earlier the profit-taking should be;
Never engage in 'betting your entire fortune' trading; leave yourself an exit.
3. On-chain trading strategies
Pursue excess returns
Focus on opportunities that may bring huge returns rather than daily profits;
Do not overly pursue the accumulation of small transaction profits (as Warren Buffett said, diversification is the protection of the ignorant);
Position management
Avoid trading with a full position;
Adopt a tiered reduction strategy;
For example: sell 10% at 50M, then sell another 10% at 100M, and so on;
Risk control
Volatility management
Be mentally prepared for a 50-70% pullback;
View volatility as an opportunity rather than a threat;
Maintain emotional stability and avoid panic decisions;
Summary
Successful trading depends more on psychological factors, the biggest opponent is yourself. Through reasonable portfolio allocation, cautious leverage use, and correct on-chain trading strategies, one can achieve considerable returns in a bull market while effectively controlling risks. Remember: volatility is an important source of profit in the cryptocurrency market, learning to coexist with it is the key to success.
