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.
