5 Ideas on Making Money in a (Bitcoin) Bull Market
Are you going to make money this time, or will you watch other kids have fun?
In the previous article, I wrote about why I suck at trading bull markets. This time, we’ll look at what I should have done instead. Think of these as some general guidelines to keep you on track.
Listen, bull markets should not be overanalyzed and are not for thinking.
They should be milked as there is a short window to make the most money. Keep things simple and don’t overthink. I keep repeating the same thing to myself and always end up trying to outsmart the market and ending up making less money than if I had just bought and held some Cryptocurrencies through the bull cycle. Will this time be any different?
How does one make money in a bull market?
Bull market money maker number 1: Buy every dip
I mean, it’s pretty self-explanatory, really. Buy the dip. How deep a dip? Well, that will depend on the market, part of the cycle, and the instrument you’re trading.
I would measure the dips on your preferred trading instrument, pair, and exchange (if crypto) and make an educated guess. I would then layer my orders in that vicinity. Just remember, it’s hard to bet big when buying blood because you don’t know how low it will go. How do you manage risk?
In 2017, I bought every 20-30 % dip in large-cap alts and a 10-20% dip in Bitcoin. In later phases, we hardly got any good dips unless something was terribly wrong.
Bull market money maker number 2: Buy the new thing
I won’t spend much time on this. Every cycle has its favorites. ICOs, De-FI, NFTs, AI, Chains, Exchange coins… The coins that make the most money in a segment that is popular this cycle. Figure out what that is, and long the biggest winners (not the losers!).
If they show strength before the full-blown bull, they will do well when it comes. Just don’t forget that gravity comes for all these shitcoins eventually!
Bull market money maker number 3: Buy the breakouts
That’s a classic. When a range, your favorite pattern, or the old ATH (all-time high) is breached on a closing basis (not just a wick) - market buy!
Don’t wait for a retest, as they often don’t come. That is true for bull markets only; don’t long every breakout in ranging markets because you’ll just be “the liquidity” for whales.
Bull market money maker number 4: Buy the first pullback
When things are popping all over the place, and you’ve missed the initial pump, the market gods usually give us a good profit on the first pullback. Every sequential pullback is more risky, so keep this in mind. Check the charts to see how deeply your chart tends to pull back before thrusting forward one more time.
I like playing pullbacks of 50% (of the breakout) on altcoins and roughly 30% on Bitcoin when they are pumping out of ranges.
Bull market money maker number 5: Hodl!
It’s challenging to beat just holding Bitcoin or some pumping altcoin through a bull cycle. It’s also tricky to get the timing right. For most, the simplest strategy is the best: buy quality and just hold it. Again, we’re talking about bull markets, not bear or ranging ones.
Here are five short tips for you regarding bull markets:
Don’t overthink things (“Don’t be like Mike,” a.k.a. me). KISS.
Do not touch the red button - don’t short! Long only.
Always manage risk because things can go wrong.
Take profits, and if you’ve made good money, take it out of the market because you will find a way to give it back.
All bull markets end one day. Don’t jump of to soon, but don’t overstay your welcome, either.
Enough talk. Let’s see if this is indeed the start of a great bull market, or will we pay for this latest FOMO in tears and blood? After all, the chart looks great, ETF should be around the corner, and Bitcoin halving is in about six months. If there were ever a time to be bullish, it would be now.
Still, keep in mind no two cycles are exactly alike, and unexpected things can and do happen in the market. I’ve written about my bearish thoughts in previous articles. Let this one be bullish for a change.
Have fun out there!
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