In my first few months into cryptocurrency, my portfolio was in the red, costing me a significant amount of money. There were several reasons for this, the main one being that at the time I had no idea how the market worked.
But after a period of time, I successfully turned from a loss to a profit.
If you’re a beginner and don’t make the same mistake I made, here are 7 crypto tips I’ve put together to help you succeed in the next bull market cycle:
Reduce quantity, focus on focus
Many people like to diversify their investments. Although diversified investment is a good investment method, it can only preserve wealth, but cannot 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 investment portfolio, and you can still sleep well at night.
But it is difficult to achieve wealth growth in 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 the most promising,
It's much easier to manage 6-7 locations than 25 locations.
Don’t sell “winners”
This is one of the biggest mistakes that a lot of people make, when you see one of your tokens going up and the other token is underperforming, so you sell the best performing token... But this approach Increases your risk on failed coins, so it's not a good idea.
Let your "winners" run and take off in the next bull market! There’s nothing sadder than selling a token after it’s gone up 2x, only to have it go up 10x in the next few months.
So when do you take profits? When the price has reached your sell target or your non-crypto friends start calling you asking what tokens you should buy.
In a bull market, you must understand the principle of "hype>fundamentals"
Pumpamentals refers to the factors that promote the rapid rise of token prices, such as narratives, catalysts, or certain benefits, but have nothing to do with fundamentals (fundamentals).
During the last bull run, XRP's market capitalization reached $80 billion, which would not have been possible without its extremely active community. There are many other coins that have also reached sky-high valuations due to their powerful flushing toilet effect.
While fundamentals will eventually be the main driver of higher prices, in my opinion we are still far from that point. Therefore , instead of just focusing 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 matter most:
·Fundamentals (fundamentals)
·Income generation
·Product market fit
But in a bull market, Pumpamentals become extremely important.
·Community spiritual leader
·Social media hype
·Narrative and market fit
·Powerful marketing
Previously, I shared more thoughts about "Pumpamentals" in this thread:
Write your investment thesis
This seems boring and not something many people would do. But as Louis Cooper says in the tweet below, writing can help you build investment conviction.
It can also help you better understand your investment targets and identify gaps in your knowledge. Additionally, forcing yourself to write analytical articles before buying a token makes it easier to avoid investing out of FOMO.
Review your portfolio every 1-2 months
Unless you are buying BTC or ETH, you must not "buy and forget" . Cryptocurrencies develop at an extremely fast pace, with most projects disappearing less than two years after their launch.
Therefore, I recommend reviewing them regularly.
When reviewing projects in my portfolio, here are some things I check:
·Recent progress of the team
·On-chain indicators (income, expenses, TVL, etc.)
· Community strength (Is anyone talking about the project on X?)
·Roadmap (What’s next for the project you’re investing in?)
As George Soros said: "What matters is not whether you are right or wrong, but how much you make when you are right and how much you lose when you are wrong."
The only way to minimize losses is to take action early when fundamentals change.
Stay open to new ideas and perspectives
There’s one 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 is probably the most expensive mistake you can make.
Keeping trying new things can be very rewarding, and you might even get some airdrops for doing so.
If you cannot easily change your biases when new important information becomes available, then you are just a project community member, not a true investor.
Accept that sometimes you will be wrong. The greatest traders have no ego issues when it comes to saying, "My analysis was wrong, I screwed up."
Develop an exit strategy
People who did not make profits in the last bull market swear that they will make profits next time, but it is easy to get immersed in the excitement of the bull market.
At the top of every bull market, 90% of the influential people say we’re going higher, and we’re just getting started. Selling shaming became a common phenomenon, and those who made profits were called fools.
So you need to develop an exit strategy and make sure you stick to it.
Selling isn't easy, and you probably won't sell at the exact top, but at least you can make sure you lock in some profits and don't survive a brutal bear market in vain.
A good exit strategy should include the following two points:
·When to take profit
·When to cut losses
Here is a great topic on how to create an exit plan:
Okay, that’s it for today.
Finally, the first thing I suggest to everyone is to invest/trade based on strategies and rules determined by your previous market experience. As the saying goes: " A trader without systematic principles is a gambler ."
It's hard to build wealth and easy to lose it, which is why a clear strategy is needed.
