How to make money in a bull market and avoid going bankrupt?

Written by: David G , Moonshot Consultant

Compiled by: Yuliya, PANews

This article is a practical guide on how to profit and avoid risks in the cryptocurrency bull market. The article elaborates on trading strategies and risk management methods from three core dimensions: portfolio structure, leverage use, and on-chain transactions.

1. Portfolio Structure

Portfolio construction needs to be adjusted according to the size of the fund, but there are several core principles to follow:

• Mainly high-quality collateral

• • It is recommended to focus on high-quality assets such as BTC and SOL;

  • Convert to stablecoins during volatile or bearish markets;

  • Use profits to replenish mainstream currency holdings during a bull market;

• Dynamically adjust strategies

• • Currently maintains close to 100% BTC and SOL configuration;

  • As the bull market cycle progresses, the proportion of stablecoins will gradually increase;

2. Guide to using leverage (suggestions for beginners)

Put aside the traditional understanding of leverage on social media and think of leverage as a tool to improve capital efficiency.

• Differentiate

• • The leverage strategies for mainstream coins and small-cap coins should be completely separated;

  • Using leverage on SOL is a completely different trade than using leverage on a 500M market cap token;

• Basic principles

• • The total leverage of small-cap cryptocurrencies should not exceed 1x (e.g., with a deposit of $100,000 SOL, the long position of altcoins should not exceed $100,000);

  • Mainstream currencies can use 2-5 times leverage at certain times;

  • The higher the leverage ratio, the earlier the profit should be taken;

  • Never make a deal that "bets everything on you", always leave yourself a way out;

3. On-chain transaction strategy

• Pursuit of excess returns

• • Focus on opportunities that could lead to big gains, rather than day-to-day profits;

  • Don’t be obsessed with accumulating profits from small trades (as Warren Buffett said, diversification is the protection of ignorance);

• Position Management

• • Avoid full position trading;

  • Adopt a step-by-step reduction strategy;

  • For example: sell 10% when it is 50M, sell another 10% when it is 100M, and so on;

Risk Control

• Volatility Management

• • Be prepared for a 50-70% pullback;

  • View volatility as an opportunity rather than a threat;

  • Keep your emotions stable and avoid panic decisions;

Summarize

Successful trading depends more on psychological factors, and the biggest opponent is yourself. Through reasonable portfolio allocation, prudent use of leverage and correct on-chain trading strategies, you can effectively control risks while making considerable gains in the bull market. Remember: volatility is an important source of profit in the cryptocurrency market, and learning to live with it is the key to success.