Beware of trading traps. How to get out of this bull market unscathed?

Author: Temmy Source: X, @Only1temmy Translation: Shan Ouba, Golden Finance

Remember when I first entered the cryptocurrency field a few years ago, the game looked difficult. But now the competition is even more intense, and we are in an extremely competitive stage.

The main pain points of this bull run include:

- Dramatization of VCs

- Suppression by the SEC

- Cultural coins

- Bad token economics of projects

- High FDV projects

We have to be careful because how can a startup that has not yet achieved significant success be valued in billions without a perfect product? Although no one seems to care, I think we should care because we love cryptocurrencies. It hurts to see a project with solid utility but a bad token economics model being backed by top VCs.

To be honest, I don't know what went wrong in this space, but whatever it is, we need to re-examine and think about how to change the world with blockchain and cryptocurrency. Otherwise, we will continue to drift.

Back to the point, this bull market is complicated, and if you are not careful, many users will eventually withdraw their funds.

I have witnessed this situation firsthand, so I can testify. To get good liquidity in this bull market, you must understand the difference between gambling, trading and investing.

- Gambling: throwing money at a project and hoping it will soar.

- Trading: involves strategy, timing and understanding of market trends.

- Investing: believing in the fundamentals of the project for a long time.

If we confuse these, we are setting ourselves up for failure.

Focus on the goal

As a cryptocurrency enthusiast, you should know why you are here and focus on it, because each of us has different goals. Also remember that a bull market is a once-in-a-lifetime opportunity, but also a trap if you’re not careful. People often hold on too long, expecting the market to continue to rise, only to see their gains wiped out when the market corrects. This is a harsh lesson that many people, including myself, learned in the last cycle. Consider the stories from previous cycles. Some knowledgeable traders were convinced that the bull market would never end, and they watched their portfolios swell and then collapse. They believed in their projects, tokens, and exchanges. They worked hard, interacted with the market, provided liquidity, staked tokens, participated in governance votes, and so on. They were like cells that drove the growth of the protocol. But they didn’t cash out, and that was their fatal mistake. Strategies to Avoid Drawdowns To avoid drawdowns in this round, I think the following measures can be taken: 1. Keep learning from others’ mistakes: Some mistakes include not believing in your own beliefs, not taking action, not taking profits, and so on.

2. Set Clear Profit Targets: If you want to succeed here, decide when to take profits. Whether it's a 20%, 50%, or 100% gain, having a plan helps avoid emotional decisions.

3. Diversify Your Portfolio: Don't put all your eggs in one basket. Spread your investments across different projects to mitigate risk.

4. Stay Informed: As a crypto investor, you must stay informed about market news, project developments, and macroeconomic factors because, as the saying goes, "Where your treasure is, there your heart should be also."

5. Don't Be Greedy: It's tempting to wait for the next big rally, but markets are unpredictable. Sometimes, it's better to lock in smaller, certain gains. Taking profits should be an important part of your strategy.

Planning for the Future

As the market heats up, it's easy to get caught up in the frenzy and forget that "what goes up must come down." Start planning now. Consider taking profits in the "after months" because now is the time to buy, not sell. This market is different than 2021, and it will test your resolve and your strategy. But with careful planning and disciplined execution, you can avoid the pitfalls of a drawdown.

Stay sharp, stay informed, and most importantly, take profits in a timely manner. This bull market could be your greatest opportunity, as long as you play it right.