Investment Newbie Guide: It's hard to leave the Bull Market, but preserving profits is the key

The author of this article shares experiences and lessons learned in the Crypto Assets market to help Newbie investors better understand market dynamics and plan their investment strategies rationally in a Bull Market. The article is based on an article by Placeholder partner Chris Burnisk, compiled and translated by Foresight News. (Background: Avoiding the four strategies of fear of missing out, teaching you to stay focused on trading in a Bull Market) If your friends contact you and ask about BTC, Ethereum, and other Cryptocurrencies, it's not easy to guide them given the current market conditions (BTC is approaching $100,000). Especially when they are inexperienced rookie investors. Here are some lessons I have learned over the past decade. Make sure that the actions they take are their own responsibility. You may have more experience and knowledge, but that does not mean you are always right. No one understands everything happening in this market. If someone claims to understand everything, they are definitely lying. You can try to explain to them the stage we are in within the market cycle. For me, we have been in this Bull Market cycle for 2 years now (pictured at the bottom of the image in November 2022). Calculated from the bottom 2 years ago, BTC has risen over 6 times, ETH has risen over 4 times, and SOL has risen over 30 times. The painful truth is that as Token prices rise, people's attention will increase, and this attention will eventually turn into buying power. Therefore, the more prices rise, the more attention people pay, and the more follow-up potential returns there are. However, generally speaking, the later we enter the 'attention cycle,' the more disadvantageous our position becomes. So the best time to get on board is often when no one is interested, but that was 2 years ago. What if they are eager to buy Tokens now, even if it's not the best time to get on board? Keep it simple: Personally, if they are rookies, I would tend to recommend holding a certain proportion of BTC, ETH, and SOL (50/25/25%), letting them take care of other risks. At the very least, if they mess up 'getting on board / selling at the top,' they will still have a certain amount of digital funds. If they choose smaller coins, encourage them to learn and keep the risk below 10% of the total allocated funds. Based on the current 'get on board' price, if they double their investment, encourage them to withdraw their principal at that time, ensuring profits at the same time. Later, if their funds have tripled, they can cash out all funds, or if they are willing to take more risks, cash out the profits they have earned twice, maintaining the remaining funds (cost), but try to make them understand the crazy big dump that may occur in a Bear Market. (If they are staunch BTC supporters and never want to sell, that's okay, but they must be prepared to face difficulties at some point). Dumping in a Bear Market is due to panic and fear of dumping, but it becomes relatively difficult to exit in a Bull Market. Sometimes if they feel they sold too early, they will hate you, but they will thank you later. They also need to be careful that if they choose to take profits and then re-enter the market, reinvesting those profits, if the market continues to rise, it will lead to fear of missing out - this idea usually leads to adverse consequences. Because if the market suddenly collapses, they may eventually find that they need to pay more tax on the realized profits than the assets left in their hands (this situation often occurs). Every sale of a Crypto Asset is a taxable event, even if it involves an asset swap. Once I start cashing out, I plan to deposit it in a secure interest-bearing account in TradFi, for 12 to 18 months - high-yield Crypto stablecoin accounts are not considered cash holdings, as there are still Crypto market risks in these accounts, and the leverage accumulated in a Bull Market may leave you with nothing. First, I will settle my tax liabilities, and then I will start looking for new investment opportunities again. This usually happens when people lose their minds due to panic, or ideally, when the market cools off and people become indifferent (which often happens more than 12 months after the market peaks). Although exchange-traded funds (ETFs) and potential sovereign country buying behavior may mean that BTC will not experience too severe a Bear Market in the future, every time a Bull Market arrives, people find various reasons to prove that it will rise to absurdly high levels or claim that there will be no Bear Market. The 'super cycle' is always a collective delusion. I can see the reasons for the cycle repeating (peaking in the fourth quarter of 2025), as well as the reasons for extending the cycle and breaking the four-year pattern. Although we may undergo integration after the inauguration of the new U.S. president, I do not believe in the idea of shortening the cycle. This is merely the post-traumatic stress disorder (PTSD) caused by the Bear Market trauma. That being said, structurally, anything that rises at a speed of 100 times is prone to experiencing at least an 80-90% retracement at some point - mainly due to too many profitable positions. If SOL rises to $800 in this cycle, it may fall to $80-160 in the future (e.g., 2027). So if someone buys in at $240 and holds firmly, they will lose money in the upcoming Bear Market. It's challenging for people to realize this during the frenzy of a Bull Market, but since you have experienced it, you can now educate them. Based on the current price (SOL has risen over 30 times from the low point), no one can get rich or make crazy returns from it, but they will see others making significant profits, making it difficult to resist temptation. If you tell them not to buy but wait because the 'final collapse' will bring prices below current levels, they will feel pain because depending on the asset, prices still have 2-5 times or even higher upside potential until they peak, making everything very unstable. Finally, I would like to further explain that many inexperienced investors tend to think more in terms of dollars ($) rather than multiples (X) or percentages (%) when considering investments. For example, if you say SOL could rise to $1000, they might think, wow! That would increase the value of each SOL by $760! However, rising from $8 to $240 only increases the value of each SOL by $232. What they fail to realize is that rising from $8 to $240 is a 30x increase, while rising from there to $1000 is only a 4x increase. Understanding this is crucial for investors. Related reports: Speculation patterns have changed under the appearance of a Bull Market: Entertainment value determines future trends. Attention is everything, unique stories of this Bull Market and the involvement of Generation Z are key. Viewpoint: The 'top signal' of this Bull Market has failed, and the new market maker has not yet arrived. The article 'Investor Newbie Guide: Exiting a Bull Market is difficult, but preserving profits is the key' was first published on Dynamic Area BlockTempo, the most influential Blockchain news media.