Although the current market is good, when the bull market ends, most people will lose money. They make preventable mistakes and lose life-changing fortunes. So, here are 15 mistakes to avoid in a bull market (and how to prevent them):
1. Don’t take profits. No one cares what your portfolio peaked at. What matters is what you have left at the end of the cycle.
If you feel like an investing genius or are taking screenshots to show off your gains, it’s time to take profits. Taking profits means exchanging some currency into fiat currencies, stablecoins or tokens for long-term investment rather than plowing it into riskier projects. Make a cycle exit plan for yourself. Chances are you've picked up some bad habits during the last two years of bear markets. Strategies that work in a bear market don't work in a bull market.
2. Focusing on fundamentals rather than rising bull markets is speculative. Look for projects that: Can generate hype Have a simple, easy-to-understand story. Can people understand why prices will rise in the future? Too much fundamental analysis will ruin you.
3. Switch positions too quickly Remember how narratives in bear markets can appear and disappear in a matter of days? Why? Existing market + lack of new liquidity = rapid change of market hot spots. In a bull market, narratives last longer because there is more liquidity. Don't make yourself lose profits by changing positions frequently.
4. Momentum wanes Cryptocurrency total market capitalization prices have increased by 100% in the past few weeks. You think it's "too expensive" and you wait for a pullback that never comes. It will go up a further 10x because this is a bull market. Price is a narrative.
5. Riding the Trend You have to spot trends early, ride them as hard as possible, and get off before they stop. Spot the trend early (spot the wave) invest (ride the wave) make profits along the way and get out before the crash
6. Don’t think about crypto like retail investors Twitter does not equate to the entire crypto space. You end up with too many flywheels and governance issues that no one wants. You should spend time on Tik Tok, IG (Instagram), Reddit and YouTube. To understand ordinary people, you have to spend time with them.
7. Don’t narrow down the narrative and focus on 2-3 narratives. I know you want to "catch every opportunity on the upside," but if you spread yourself too thin, you won't have any advantage. I think the following sectors will do well in this cycle: AI RWA LRTfi Depin Meme Brc20 GameFi L1/L2
8. Pursuing too much income and staking tokens to obtain airdrop points? don't want. Deposit tokens to get an extra 8%? It’s not worth the risk of smart contracts. Remember those fools who deposited their tokens into Celsius to get an extra 5%? Don't do this, you want their interest and they want your principal.
9. Panic During Pullbacks There will be many pullbacks on the way to the highs. They are healthy and expected for the market. At this time, the leverage should not be too high, otherwise the position will be liquidated. Don't try to predict every pullback either.
10. Investing Too Diversified I’ve seen people post portfolios online before that have more than 25 tokens. You can’t keep up with that many projects. And if one of the coins goes up super high, you’re not going to get that much return on your total position. I think 5 - 7 tokens is the sweet spot.
Here is a simple portfolio for reference long-term holding: BTC, ETH or SOL narrative
1: Sector Alpha (leading) and coin descriptions that are likely to obtain excess returns
2: Sector Alpha (leading) and coin descriptions that are likely to obtain excess returns
11. Compare yourself It’s easy to feel like your profits are average compared to the profits of others on Twitter. There is survivorship bias in the market, don’t be too FOMO I’ve seen this happen countless times. Your coin can achieve 10 times the performance but you feel that your performance is not as good as others and then pursue 50 times the income, which ultimately leads to your failure and finally get 0 US dollars in profits. You may as well take profits gradually and don't compare too much. 3: Sector Alpha (leading) and coins that are likely to obtain excess returns
12. Don’t try to sell at the top. No one can time the top of a cycle perfectly. Many people have lost fortunes because they tried to sell the "top" but didn't time it right. solution? Just sell gradually during the rise.
13. Revenge Trading If I lose money at poker, I will continue playing and become more aggressive in trying to win my money back. But this rarely works. Don't do this in cryptocurrencies. When you are losing money and are emotional, it proves that now is not the time to trade.
14. Not stopping losses fast enough. No one has a 100% winning rate. It's okay to fail, but it's not acceptable to persist as a loser. Set some conditions before entering a trade. For example, if the price falls by more than 15%, stop the loss. You ask, “But what if I sell it and the price goes up?” But here’s the thing: What if you hold on to it and it goes to $0? What if it stays stagnant and you can allocate it to other 10x coins? There is an opportunity cost to your capital.
15. Understand investor psychology. Remember, the results are different in every cycle. We can have shorter or longer cycles. Stay flexible. One thing remains constant: human psychology. Understand the herd mentality and greed mentality. I know you're excited about rising markets. But I have seen countless people overestimate their abilities midway, resulting in profit taking. Keep things simple and keep a clear head.
