15 Mistakes You Need to Avoid During Bull Markets

Forward the Original Title：守住利润：牛市中你需要避免的 15 个错误

Despite the current good market conditions, most people will end up losing when the bull market ends.

They will make some preventable mistakes, thus losing the wealth that could have changed their lives.

Therefore, here are 15 mistakes to avoid during bull markets (and how to prevent them):

1. Don’t Take Profits

No one cares about the highest price of your investment portfolio; what matters is what you retain at the end of the cycle.

Below is a systematic example that you can adjust according to your risk tolerance.

Tips:

1. If you feel like an investment genius or are about to take a screenshot to show off your gains, then it’s time to take profits.
2. Taking profits means converting some coins into fiat currency, stablecoins, or tokens for long-term investment, rather than putting them into higher-risk projects.
3. Set up a plan to exit the market at regular intervals for yourself.

You may have developed some bad habits during the bear market of the past two years. Strategies that worked in a bear market may not apply in a bull market.

Here are some examples of bad habits…

2. Focus on fundamentals rather than uptrend

Bull markets are all speculative.

Look for projects that meet the following criteria:

1. can generate hype
2. Have a simple, understandable narrative. Can people understand why the future price will rise?

Too much fundamental analysis can ruin you.

3. Changing positions too quickly

Do you remember how narratives in the bear market would appear and disappear within days?

Why? Because of the existing market supply + lack of new liquidity = rapid shifts in market sentiment.

In a bull market, narratives last longer due to more liquidity. Avoid frequent position changes that can erode your profits.

4. Diminishing Momentum

In the past few weeks, the total market capitalization of cryptocurrencies has risen by 100%.

You might think it’s “too expensive” and wait for a pullback that never seems to come.

It will rise another 10x because it’s a bull market.

Price is a narrative.

5. Riding Trends

You must identify trends early, ride them as much as possible, and exit before they stop.

Identify trends early (catch the wave)

Invest (ride the wave)

Profit all the way and exit before the crash

6. Think Beyond Retail Investors

Crypto Twitter does not represent the entire crypto space. You’ll end up caught in too many echo chambers and governance issues that no one wants.

You should spend time on TikTok, IG (Instagram), Reddit, and YouTube. To understand the common person, you must spend time with them.

7. Don’t Narrow the Narrative

Focus on 2-3 narratives.

I know you want to “catch every upward opportunity,” but if you spread yourself too thin, you won’t have any advantage.

I believe the following sectors will perform well in this cycle:

1. AI
2. RWA
3. LRTfi
4. Depending on
5. Meme
6. Brc20
7. GameFi
8. L1/L2

8. Chasing Excessive Returns

Staking tokens for airdrop points? Don’t.

Depositing tokens for an extra 8% return? Not worth the risk of smart contract failure.

Remember those fools who deposited tokens into Celsius for an extra 5% yield?

Don’t do that. You want their interest; they want your principal.

9. Panic During Pullbacks

There will be plenty of pullbacks on the way to the top. They’re healthy for the market and to be expected.

Don’t leverage too high during these times, or you’ll get liquidated.

Also, don’t try to predict every single pullback.

10. Overdiversification in Investments

I’ve seen people online with investment portfolios comprising over 25 tokens.

You can’t keep up with that many projects.

Moreover, if one token sees an exceptionally high increase, you won’t gain as much return on your overall position.

I believe 5 - 7 tokens strike the best balance.

Here’s a simple investment portfolio for reference:

1. Long-Term Holds: BTC, ETH, or SOL
2. Narrative 1: Sector Alpha (Leading project) and coins with potential for outsized returns
3. Narrative 2: Sector Alpha (Leading project) and coins with potential for outsized returns
4. Narrative 3: Sector Alpha (Leading project) and coins with potential for outsized returns
   

11. Pursue Comparison with others

It’s easy for people to feel their profits are mediocre compared to others on Twitter.

The survivorship bias exists in the market, so don’t FOMO too much.

I’ve seen this scenario countless times.

Your coin could achieve a 10x return,

but you feel like you’re underperforming compared to others,

then you chase a 50x return, ultimately leading to your failure

and ending up with $0 profit.

Consider taking profits gradually and avoid excessive comparisons.

12. Don’t try to Sell At the Top

No one can perfectly time the peak of a cycle.

Many people lose wealth because they try to sell at the “top,” but the timing is off.

The solution? Sell gradually during the uptrend.

13. Revenge Trading

If I lose money in poker, I’ll keep playing and become more aggressive to try to win back my money. But this rarely works.

Don’t do this in cryptocurrency. When you’re losing money and emotions, it’s proof that it’s not the time to trade.

14. Slow to Stop Losses

No one has a 100% success rate. Failure is okay, but persisting as a failure is not acceptable.

Set some conditions before entering a trade. For example, set a stop loss if the price drops more than 15%.

You might ask, “But what if I sell it and then the price goes up again?”

But the reality might be:

What if you hold it and it becomes $0?

What if it remains stagnant while you could allocate it to another coin that increases by 10x?

Your capital has an opportunity cost.

15. Understand Investor Psychology

Keep in mind that results vary from cycle to cycle. We can have shorter or longer cycles.

Stay flexible.

One thing remains constant: human psychology. Understand the herd mentality and greed mentality.

I know you’re excited about rising markets. But I have seen countless people overestimate their abilities midway, resulting in profit taking.

Keep things simple and keep a clear head.

Disclaimer：

1. This article is reprinted from [marsbit]. *Forward the Original Title‘守住利润：牛市中你需要避免的 15 个错误’.All copyrights belong to the original author [Edgy]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.