Author: The DeFi Investor, DeFi Researcher Translation: Shanoba, Golden Finance

In the first few months after I started dabbling in cryptocurrency, my portfolio didn’t perform well. There were several reasons for this, such as the fact that I didn’t understand how the market worked at the time. After a while, I managed to start making a profit.

However, the mistakes I made at the beginning cost me a lot of money. Especially if you’re a beginner, you don’t have to repeat the mistakes I made.

Here are 7 crypto tips that can help you succeed in your next bull cycle:

Bet less and focus on key items

Many people are obsessed with diversification. Diversification is good, but for value preservation, not wealth creation. In fact, it’s easier to sleep peacefully knowing that your investments are spread across 15-20 projects, and even if one of them fails, it won’t have much impact on your portfolio.

But it is very difficult to create wealth in this way.

Conversely, if you like 25 projects, then it’s much easier to manage 6-7 projects effectively than 25 just by making some high stakes on the top 6-7 projects that you think are the most promising.

Don’t be in a hurry to sell

This is one of the biggest mistakes many people make.

If you see the price of one of your tokens soaring and another underperforming, it’s never a good idea to sell the top-performing token and increase your exposure to the lower-performing token.

Keep your tokens flying! In the next bull run, things get even crazier.

There’s nothing more painful than selling a token after it has doubled and then seeing it multiply another 10x over the next few months.

When to sell, when the price reaches your expectations or when your non-crypto friends start calling to ask what token you should buy.

In a bull market, market sentiment > fundamentals

Market sentiment refers to the factors that can quickly drive the price of a token up, but it has nothing to do with fundamentals. XRP reached a market capitalization of $80 billion in the last bull run. This would not have been possible without its very active and fanatical community. There are many other coins that have reached extremely high valuations due to their strong market sentiment.

I think fundamentals will eventually be the main driver of prices, but in my opinion, we are far from that.

So, instead of just focusing on finding projects with the strongest fundamentals, try to understand what makes retail investors buy a certain token.

In a bear market, these things are the most important:

*Fundamentals *Income

• Product-market fit

But in a bull market, market sentiment becomes very important:

• KOL
• Social media hype narratives
• Market fit
• Powerful marketing

I previously shared some thoughts on market sentiment in this post:

Write down your investment ideas

Writing your argument when investing is very helpful, which helps to better understand your investments and identify gaps in your knowledge. In addition to this, it is easier to avoid investing based on FOMO (fear of missing out) when you force yourself to write your argument before buying the token.

Review your portfolio every two months or monthly

Unless you buy a BTC or ETH, buy and forget about a bad strategy. The crypto space is growing rapidly, and most projects become irrelevant less than 2 years after their launch. That’s why I recommend reviewing them regularly.

Some of the things I check when reviewing a portfolio include:**

• Recent progress of the team
• On-chain metrics (revenue, fees, TVL, etc.)
• How strong the community is (does anyone talk about the project on X?)
• Roadmap (what’s next for the project you’re betting on?)

As George Soros said, “What matters is not whether you are right or wrong, but how much money you make when you are right and how much you lose when you are wrong”.

The only way to reduce your losses is to cut off your losses early when the fundamentals change.

Stay open to new ideas and perspectives

One way to increase your chances of success: Invest in unpopular, misunderstood projects before everyone starts talking.

Saying “that’s definitely not going to work” without doing your research is probably the most costly mistake you can make in a bull market. Constantly trying new things can be hugely rewarding.

In addition to that, by doing so, you may also get some airdrops.

Also, if you can’t change your biases when there is important new information, you’re more of a project community member than a real investor.

Good traders don’t get laughed at when they say, “My analysis was wrong, I screwed up.”

Develop an exit strategy

Anyone who did not make a profit in the previous bull market will swear that they will not miss the next bull market, but the frenzy of falling into a bull market can lead to errors in judgment.

At the peak of every bull market, 90% of influencers say that we will continue to rise, and we are just getting started. Selling humiliation became commonplace, and those who profited were called fools.

That’s why you need to develop an exit strategy and make sure you stick to it. It’s not easy to sell, and you probably won’t sell at the highest point. But at least you can make sure you’ve locked in some profits and aren’t in a brutal bear market with nothing to gain.

A good exit strategy should include the following:

When to make a profit

When to stop loss

Here’s a great plan on how to make an exit plan:

Link to original article

That’s all for today.

Overall, one of the things I recommend the most is a strategy and a set of rules for investing/trading based on your previous market experience.

As the famous saying goes: “A trader who doesn’t have a set of rules for an advantageous system is a gambler”.

It is very difficult to build wealth, and it is easy to lose it.

That’s why a clear strategy is needed.

Source: Golden Finance