David's Bull Market Money-Making Guide: How to Make Money and Avoid Liquidation
Today is a bit serious, sharing some experiences I have summarized over the years through painful lessons, hoping you can avoid some pitfalls by reading this article.
It is important to emphasize that the focus of this article is on execution—how to truly pocket the profits of a bull market. I will not discuss research, analysis, or asset selection (these are actually relatively simple parts).
The three key elements to successful trading in a bull market are:
Portfolio Structure
Using Leverage (When to Use, How to Use)
On-Chain Operations
Portfolio Structure
The way you build your portfolio largely depends on your capital scale. Whether your assets are $100,000, $1 million, or $10 million, the following core principles apply.
First, your portfolio should be based on high-quality collateral assets. For me, this means Bitcoin and $SOL. In a volatile market or bear market, when I sell assets, I usually choose to convert to stablecoins (stables), but in a bull market, I am more inclined to use profits to acquire more mainstream assets that I am optimistic about. The advantage of Bitcoin and $SOL is that they are not only quality assets but can also be used as collateral for lending, thereby enhancing capital efficiency.
Currently, my portfolio is almost entirely composed of Bitcoin and $SOL. However, as the market cycle progresses, I will gradually convert a larger proportion of my assets into stablecoins to lock in profits.
Leverage Usage Strategy
(The following suggestions are suitable for beginners in leveraged trading. If you are already an experienced trader, you can operate according to your own strategy.)
First, forget the advice about leveraged trading that you see on Crypto Twitter (CT). Leverage is just a tool to enhance capital efficiency and seize opportunities when the risk/reward ratio (r/r) is asymmetric.
It is important to note that leveraging mainstream assets (such as Bitcoin, $SOL) and altcoins (tokens with smaller market caps) are completely different strategies. For example, going long on $SOL and going long on a small coin with a market cap of 500 million may appear to be the same "long" on the surface, but the risks and operational methods are completely different. This may seem simple, but many people do not realize it.
A basic rule is: never let your altcoin leverage exposure exceed 1 times your portfolio market value. This can avoid excessive risk while also retaining enough profit space.
For example, suppose you have $100,000 in assets, priced in $SOL, and you use it as margin for futures trading (perps). In this case, your long position on altcoins should not exceed $100,000. Because altcoin prices are highly volatile, if you are not a top trader, you are likely to get liquidated. But in this example, you can still achieve 2 times portfolio long exposure ($100,000 in $SOL + $100,000 in altcoins), which is already a considerable profit. The key is not to be greedy.
For mainstream assets (such as Bitcoin, $SOL), at certain specific times, you can choose higher leverage exposure, such as 3-5 times. However, it is important to note that this strategy is only applicable in scenarios where the risks are clear and the expected returns are extremely high.
Key Points of Leveraged Trading
When using leverage, the most important point is: the higher the leverage, the earlier you should take profits.
Although there is much more to discuss about perpetual contract (perp) trading, due to time constraints, I cannot elaborate here. I recommend following these excellent traders:
@Awawat_Trades
@Tradermayne
@LomahCrypto
In addition, you can watch @CryptoCred's YouTube trading series to learn more practical trading skills.
Finally, please always remember: never put yourself in a position where you will be liquidated if the trade goes against you. This is the most basic survival rule in trading.
On-Chain Trading: Capturing Potential Coins in a Bull Market
Next comes the more interesting part. If your portfolio structure is reasonable, then on-chain trading may bring you extremely high returns, but please note that this is only limited to situations where your structure is correct.
Why do I say this? Because many people are incorrectly conducting on-chain trading. The core goal of on-chain trading is to pursue excess returns, not to accumulate principal through small profits. In a bull market environment, the only thing you need to focus on is capturing those opportunities that can bring huge returns. Because these opportunities are the key to truly changing the size of your portfolio and even altering the trajectory of your life.
In on-chain trading, your goal is to find and hold a few "super potential coins" that can far surpass other assets. This may contradict the traditional investment philosophy of "diversification", but as Warren Buffet said, "Diversification is the act of the weak."
The crypto market is a reflexive market, which means that when an asset starts to perform exceptionally well, it often attracts more funds to flow in, thus becoming more exceptional. You only need one or two such super potential coins to change your life; this should be the core goal of your on-chain trading.
How to Handle Positions in Potential Coins
Once you seize a large potential coin, never liquidate all at once. You should gradually reduce your position during the upward process while retaining a certain portion to continue participating in potential upside.
For example, if you buy a token when its market value is 5 million, you can sell 10% when it rises to 50 million; sell another 10% when it rises to 100 million; and sell another 10% when it rises to 250 million. In this way, you gradually lock in profits while retaining enough upside exposure.
It is particularly important to remind that the upside potential of potential coins may far exceed your imagination, so be sure to leave a portion of your position to capture greater profits during future surges. Continuing with the above example, suppose you have sold 70% of your position when the market cap reaches 500 million, but decide to keep the remaining 30% to wait for the market cap to reach 3 billion before selling. Then, if it really rises to 3 billion, the profits from this remaining 30% may exceed the total profits from all your previous gradual sales.
This is precisely the meaning of the "gradual selling" strategy: by gradually locking in profits to reduce risk while retaining a portion of the position to participate in potential larger gains. When facing potential coins, patience and strategy are often more important than short-term profits, because once you seize such an opportunity, it may completely change your investment outcome.
Psychological Preparation: How to Cope with Price Volatility
The hardest part of holding a large position, especially when it makes up a significant portion of your portfolio, is how to cope with sharp price fluctuations. No matter how great this token is, it will definitely experience a 50-70% retracement during its upward process, and it may happen multiple times. You need to be mentally prepared in advance to accept such volatility and remain calm when it occurs; do not panic sell easily.
By following the above strategies, you can more effectively utilize the opportunities in on-chain trading, seize super potential coins in a bull market, and avoid missing potential profits due to emotional decisions.
Remember, in the crypto market, your returns come from your ability to withstand volatility.
Most people cannot withstand the significant volatility of the market, which is also why they cannot achieve great success. Volatility is your friend; it is the core reason why crypto assets are so attractive and profitable.
As you experience more and more volatility, you will gradually adapt to these dramatic fluctuations. Ultimately, you may become numb to these fluctuations, and even your emotional responses to other aspects of life may diminish. But that’s okay, at least you will become wealthy because of it.
Mindset Management: The True Battlefield of Trading
Trading is ultimately a psychological battle, and your biggest opponent is yourself. If you can learn to execute trading strategies at a high level, then not only will you succeed, but you may also achieve great accomplishments.
Keeping a clear mind is key. Whether it's praying, meditating, or walking, find a way that suits you, make these activities part of your daily routine, and help you stay focused and rational in trading.
At the same time, remain humble. Always be prepared to lose everything, but even if you do lose, believe that you can stand up again.
Summary
In the crypto market, volatility is both a challenge and an opportunity. Those who can withstand volatility can seize opportunities and achieve great success. May you always remain clear-headed, humble, and confident on this path.
Good luck, see you in the bull market!
[Disclaimer] The market has risks, and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Invest accordingly at your own risk.
This article is reprinted with permission from: (Deep Tide TechFlow)
Original Author: David G
"The Ultimate Guide to Making Money in the Crypto Bull Market! Experienced traders teach you 3 major strategies to avoid liquidation!" This article was first published in "Crypto City"
