encryptionBull Market Making Money Ultimate Guide! Seasoned Trader teaches you 3 major strategies, how to avoid Get Liquidated?

David's Bull Market Money-Making Guide: How to Make Money and Avoid Get Liquidated

Today, I will be a little more serious and share some of the experiences I have summarized through painful lessons over the years. I hope that by reading this article, you can avoid some pitfalls.

It is important to emphasize that the focus of this article is execution - that is, how to truly pocket the profits of a bull market. I will not discuss research, analysis, or asset selection (which are actually relatively simple aspects).

The three key elements to successful trading in a bull market are:

The structure of the investment portfolio

Using leverage (when to use it, how to use it)

on-chain operation

Investment Portfolio Structure

The construction of the investment portfolio largely depends on the size of your capital. Whether your assets are $100,000, $1 million, or $10 million, the following core principles apply.

First of all, your investment portfolio should be based on high-quality collateral assets. For me, this means BTC and $SOL. In a volatile market or Bear Market, when I sell assets, I usually choose to convert to Stable Coin (stables), but in a Bull Market, I prefer to use profits to acquire more mainstream assets that I am optimistic about. The advantage of BTC and $SOL is that they are not only high-quality assets, but can also be used as collateral for borrowing, thereby improving capital efficiency.

Currently, my investment portfolio is almost entirely composed of Bitcoin and $SOL. However, as the market cycle progresses, I will gradually convert a higher proportion of assets into stablecoin to lock in profits.

Leverage Usage Strategy

(The following suggestions are suitable for Newbie in Margin Trading. If you are an experienced trader, you can operate according to your own strategy.)

First of all, forget about the advice you saw on Margin Trading on Crypto Twitter (CT). Leverage is just a tool used to enhance capital efficiency and seize opportunities when the risk/reward ratio (r/r) is asymmetric.

It is important to note that Margin Trading with mainstream assets (such as BTC, $SOL) and AltCoins (Tokens with smaller Market Cap) are completely different strategies. For example, going long on $SOL and going long on a small coin with a market cap of 500 million dollars may seem similar on the surface, but the risks and operational methods are completely different. This may seem simple, but many people are not aware of it.

One basic rule is: never leverage your altcoin exposure beyond 1 times the portfolio's Market Cap. This can help avoid excessive risk while preserving enough profit potential.

Take an example: Suppose you have $100,000 in assets, denominated in $SOL, and you use it as Margin for futures trading (perps). In this case, your long positions on altcoin should not exceed $100,000. Because altcoin prices fluctuate greatly, if you are not a top trader, you are likely to get liquidated. But in this example, you can still achieve a 2x investment portfolio exposure ( $100,000 of $SOL + $100,000 of altcoin), which is already a very substantial return. The key is not to be greedy.

For mainstream assets (such as BTC, $SOL), at certain times, you can choose higher leverage exposure, such as 3-5 times. However, it should be noted that this strategy is only applicable in scenarios with clear risks and extremely high expected returns.

Key Points of Margin Trading

When using leverage, the most important thing is: the higher the leverage, the earlier you should take profit.

Although there is much more to discuss about Perptual Futures (perp) trading, I cannot delve into it here due to time constraints. I suggest following these excellent traders:

@Awawat_Trades

@Tradermayne

@LomahCrypto

In addition, you can also watch @CryptoCred's YouTube trading series to learn more practical trading skills.

Finally, always remember: never put yourself in a position where you will Get Liquidated once you Reverse the trade. This is the most basic rule of survival in trading.

on-chain transactions: capturing Promising Crypto in the Bull Market

The next part is more interesting. If your investment portfolio is structured reasonably, blockchain transactions may bring you extremely high returns, but please note that this is only applicable when your structure is correct.

Why is this so? Because many people are mistakenly conducting on-chain transactions. The core goal of on-chain transactions is to pursue excess returns, rather than accumulating capital through small profits. In a Bull Market environment, the only thing you need to follow is to seize the opportunities that can bring huge returns. Because these opportunities are the key to truly changing your investment portfolio scale, and even changing your life trajectory.

In on-chain transactions, your goal is to find and hold a few 'super promising cryptos' that can far surpass other assets. This may contradict the concept of 'diversified investment' emphasized in traditional investments, but as Warren Buffet said, 'Diversification is for the weak.'

The encryption market is a reflexive market, which means that when an asset begins to perform well, it often attracts more funds inflow and becomes even better. You only need one or two such super Promising Cryptos to change your life, which should be the core goal of your on-chain transactions.

How to handle the Position of potential coins

Once you catch a high potential coin, never close all positions at once. You should gradually reduce position during the rising process while keeping a certain portion to continue participating in potential upward space.

For example, if you buy a certain Token at a market value of 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. Gradually lock in profits in this way while retaining sufficient upside exposure.

It should be noted that the potential of Promising Crypto may far exceed your imagination, so be sure to keep a portion of your position to achieve greater profits in future surges. Continuing with the example above, suppose you have sold 70% of your position when the market capitalization reaches 500 million, but decide to keep the remaining 30% and wait until the market capitalization reaches 3 billion before selling. Then, if it really rises to 3 billion, the profit from the remaining 30% may exceed the total profit from your previous partial sales.

This is the meaning of the 'drop' strategy: reduce risk by gradually locking in profits while retaining a portion of the 'Position' for potential larger gains. When it comes to potential coins, patience and strategy are often more important than short-term gains, because once you seize such an opportunity, it may completely change your investment outcome.

Mental Preparation: How to Deal with Price Fluctuation

The most difficult part of holding a large Position, especially when it represents a significant proportion of your investment portfolio, is how to deal with dramatic price Fluctuation. No matter how excellent this Token is, it will definitely experience a 50-70% pullback during the upward trend, and may even occur multiple times. You need to be mentally prepared in advance, accept such Fluctuation, and remain calm when it occurs, and not panic dumping easily.

By using the above strategies, you can effectively seize the opportunities of on-chain transactions, capture super Promising Crypto in the Bull Market, and avoid missing potential profits due to emotional decision-making.

Remember, in the crypto market, your profits come from your ability to withstand fluctuations.

Most people cannot afford the large Fluctuation of the market, which is also why they cannot achieve great success. Fluctuation is your fren, it is the core of why encryption assets are so attractive and profitable.

As you experience more and more Fluctuation, you will gradually adapt to these drastic fluctuations. Eventually, you may become numb to these Fluctuation, and even the emotional responses to other aspects of life may weaken. But it's okay, at least you will become wealthy.

Mindset Management: The Real 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, you can not only succeed, but also achieve great accomplishments.

Keeping a clear mind is key. Whether it's through prayer, meditation, or taking a walk, find a way that works for you and make these activities a daily habit to help you stay focused and rational in trading.

At the same time, stay humble. Always be prepared to lose everything, but even if you really lose, believe that you can stand up again.

Summary

In the crypto market, Fluctuation is both a challenge and an opportunity. Only those who can withstand Fluctuation can seize the opportunity and achieve great success. May you always stay alert, humble, and confident on this path.

Good luck to you, see you in the bull market!

[Disclaimer] The market carries risks, and investments should be made with caution. This article does not constitute investment advice, and users should consider whether any opinions, perspectives, or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at one's own risk.

This article is authorized for reprint from: "Deep Tide TechFlow"

Original author: David G

'encryptionBull Market Making Money Ultimate Guide! Seasoned Trader teaches you 3 strategies, how to avoid Get Liquidated? ' This article was first published in 'encryption City'.