Written by: David G, Moonshot Consultant
Translated by: Yuliya, PANews
This article is a practical guide on how to profit in a cryptocurrency bull market while mitigating risks. It elaborates on trading strategies and risk management methods from three core dimensions: portfolio structure, leverage usage, and on-chain trading.
I. Portfolio Structure
Building a portfolio needs to be adjusted according to the scale of funds, but there are several core principles to follow:
Focus on high-quality collateral
It is recommended to primarily hold high-quality assets like BTC and SOL;
Convert to stablecoins during volatile or bear markets;
Use profits to supplement mainstream coin holdings during a bull market;
Dynamic adjustment strategy
Currently maintain a nearly 100% allocation in BTC and SOL;
Gradually increase the proportion of stablecoins as the bull market cycle progresses;
II. Leverage Usage Guide (Advice for Beginners)
Set aside traditional perceptions of leverage from social media and view it as a tool to enhance capital efficiency.
Differentiate treatment
Leverage strategies for mainstream coins and small-cap coins should be completely separate;
Using leverage on SOL is entirely different from using leverage on a token with a market cap of 500M;
Basic principles
Total leverage for small-cap coins should not exceed 1x (e.g., $100,000 SOL as margin, altcoin long positions should not exceed $100,000);
Mainstream coins can use 2-5x leverage at specific times;
The higher the leverage, the earlier the profit-taking should occur;
Never make trades that risk "putting your entire fortune on the line"; always leave yourself an exit strategy;
III. On-Chain Trading Strategies
Pursue excess returns
Focus on opportunities that may yield significant returns rather than daily profits;
Do not overly pursue the accumulation of small trade profits (as Warren Buffett said, diversification is the protection of the ignorant);
Position management
Avoid trading with a full position;
Use a tiered reduction strategy;
For example: sell 10% at 50M, then another 10% at 100M, and so on;
Risk Control
Volatility management
Be mentally prepared for a 50-70% pullback;
View volatility as an opportunity rather than a threat;
Maintain emotional stability and avoid panic-driven decisions;
Conclusion
Successful trading relies more on psychological factors; the biggest opponent is oneself. By implementing a reasonable portfolio allocation, cautious leverage usage, and correct on-chain trading strategies, one can achieve considerable profits in a bull market while effectively controlling risks. Remember: volatility is a significant source of profit in the cryptocurrency market, and learning to coexist with it is key to success.
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