When entering a new market, you should first learn how it works. Then think about how to make money. At the beginning, everything is unfamiliar, so you will have to pay the tuition fee. But after a period of exploration, you will be able to successfully turn losses into profits.
If you are a beginner, you don’t have to make the same mistakes I did. Here are 7 cryptocurrency tips that I have summarized to help you succeed in the next bull market cycle:
Reduce quantity and focus on key points
Many people like to diversify their investments. Diversified investments are certainly a good way of investment, but they can only preserve wealth but not accumulate wealth.
Indeed, if you know that your investments are spread across 15-20 projects, even if one of them dies, it will not have much impact on your portfolio, and you can still sleep well at night.
But it is difficult to grow wealth this way. For example, if you like 25 projects, then just make some big high-return bets on the top 6-7 projects that you think are most promising.
It is much easier to manage 6-7 locations than 25 locations.
Don’t sell the winners
This is one of the biggest mistakes a lot of people make, when you see one of your tokens go up big and another one doesn’t perform well, so you sell the best performing token… but this increases your risk on the losing token, so it’s not a good idea.
Let your “winners” run and take off in the next bull run! Nothing is more heartbreaking than selling a coin after it has 2x’d, only to see it go 10x again in the next few months.
So when do you take profits? When the price reaches your sell target or your non-crypto friends start calling and asking what token they should buy.
In a bull market, we must understand the principle of "hype > fundamentals"
Pumpamentals refer to factors that drive token prices up rapidly, such as narratives, catalysts, or some favorable factors, but have nothing to do with fundamentals.
In the last bull run, XRP’s market cap reached $80 billion, which would not have been possible without its extremely active community. There are many other tokens that have also reached extremely high valuations due to their strong toilet flush effect.
Although fundamentals will eventually become the main factor driving price increases, in my opinion we are still far from that point. Therefore, instead of focusing only on finding projects with the strongest fundamentals, it is better to try to understand what factors make retail investors buy a certain token and find the simple logic of retail investment.
In a bear market, these things are most important:
Fundamentals
Generate income
Product-market fit
But in a bull market, Pumpamentals become extremely important.
Community spiritual leader
Social media hype
Narrative fit with market
Powerful marketing
Previously, I shared more thoughts on "Pumpamentals" in this thread:
Write your investment thesis
This may seem boring, and not something many people would do. But as Louis Cooper said in the tweet below, writing can help you build investment conviction.
It can also help you better understand your investment and identify gaps in your knowledge. In addition, forcing yourself to write analysis articles before buying tokens will also make it easier to avoid investing due to FOMO.
Review your portfolio every 1-2 months
Unless you are buying BTC or ETH, you should never "buy it and forget it." Cryptocurrencies move extremely fast, with most projects disappearing within two years of their launch.
Therefore, I recommend reviewing them regularly.
When reviewing projects in my portfolio, I check for some of the following things:
The team's recent progress
On-chain indicators (revenue, expenses, TVL, etc.)
Community strength (is anyone on X talking about the project?)
Roadmap (What’s the next step for your investment?)
As George Soros said: "What matters is not whether you are right or wrong, but how much money you make when you are right and how much you lose when you are wrong."
The only way to minimize losses is to cut losses early when fundamentals change.
Keep an open mind to new ideas and perspectives
Here's a way to increase your chances of success: invest in unpopular, misunderstood projects before everyone starts talking about them.
In a bull market, saying "this will never work" without doing some research may be the most costly mistake you can make.
Constantly trying new things will bring you great rewards, and you may even get some airdrops as a result.
If you can't easily change your bias when new and important information emerges, then you are just a project community member, not a real investor.
Be comfortable with the fact that sometimes you are wrong. The greatest traders have no ego problems saying “my analysis was wrong, I screwed up.”
Develop an exit strategy
Those who did not make a profit in the last bull market swear that they will make a profit next time, but it is easy for people to be immersed in the excitement of the bull market.
At the top of every bull market, 90% of the influential people said we would go higher and we had just started. Sell shaming became common and those who profited were called fools.
So you need to develop an exit strategy and make sure you stick with it.
Selling is not easy, and you probably won't sell at the exact top, but at least you can be sure to lock in some profits and not have survived the brutal bear market in vain.
A good exit strategy should include the following two points:
When to profit
When to cut losses
Here's a great thread on how to create an exit plan:
Okay, that’s all for today.
Finally, the first thing I suggest to everyone is to invest/trade according to the strategies and rules determined by their previous market experience. As the saying goes: "A trader without a systematic guideline is a gambler."
It is difficult to accumulate wealth, but it is easy to lose it, which is why a clear strategy is needed. #BTC #ETH #etf #BNB🔥 $BTC $ETH $BNB
