Here are 11 most important things you should avoid to protect your portfolio
Most people will end this bull run with $0 despite parabolic price action.
Reason: Repeating common mistakes and not doing proper risk management
Risk management is one of the most important skills in crypto.
I have seen people making $0 ➡️ $1M and then back to $0
This happened in the past cycles and it will happen again
So, let's get started so that you can retire rich this bull run
1) Chasing high yields
There's a saying in crypto: If you don't know the source of the yield, you're the yield.
As the bull run progresses, several protocols will offer crazy yields like 100%-200% to attract new users and prop up their TVL.
Do you remember Anchor Protocol?
It used to provide 20% APY on UST and became the top DeFi protocol in no time.
People put their life savings into it, and in the end, it all went to zero.
So, keep this in mind before chasing those yields.
2) Locking up your portfolio
Never stake your entire portfolio during a bull run.
During the blowoff top, most tokens crash 40%–50% after peak
Also, the majority of tokens have a 3-4 week lock-up period, so you won't be able to sell them.
Keep a portion of it for staking and the remaining in your cold wallet.
3) No exit strategy
During an uptrend, people start thinking that there won't be a top
Last cycle, people bought $ETH at $200, $BTC at $4,000, and several other tokens at a very cheap level.
But they didn't sell it due to their unrealistic expectations.
All this happened because they had no exit strategy.
If you want to become rich, set a target for profit-taking and don't miss it.
You can keep a moonbag in case the market pumps more, but never keep the entire portfolio as a moonbag.
4) Following cult leaders
Most people buy, sell, and trade based on their cult leader opinions.
Last cycle, several people got rekt simply due to $500K BTC and $20K ETH predictions.
This cycle, it'll be no different
As BTC will pump towards $100K, big accounts will start calling for $500K-$1M.
They'll even call HFSP and other things just to stop you from selling.
Remember, those people have one address to show and several addresses to dump while preaching WAGMI and HODL.
5) Chasing every narrative
In the crypto market, narratives change at lightning speed.
Two weeks ago, people were talking about DOG memecoins.
Then, the entire CT became bullish on #CAT memecoins.
And now they think #AI memecoins are the meta of this cycle.
In every big narrative, only a handful of tokens give huge gains, and usually they're the earlier ones.
Just like other narratives, those who'll buy every new AI memecoins in hope of overtaking $GOAT will most likely get rekt
So, stick to only a few ones, and you'll do good.
6) High leverage trading
Excessive greed kills portfolios.
On CT, most traders only show their profitable trades to lure retail into leverage trading.
Even the most sophisticated investors usually get caught up in greed and start taking high leverage to retire early.
And then the most predictable things happen.
The market takes a 20%-30% dump, and all those leverage traders get rekt.
In a bull run, you can easily 10x-15x your portfolio in spot, so focus on finding good coins rather than going 100x.
7) Holding too many coins
Lower the portfolio; lower the tokens should be in your portfolio.
Holding too many coins usually diminishes your overall returns.
Pick 2-3 narratives and then bet on 3-4 tokens from each one.
Every day, new projects claim to be the next BTC, ETH, $SOL, or $TAO.
Don't listen to their words; watch their actions, and then position yourself.
8) Keeping funds on CEXes
If there's one thing you should learn from Mt. Gox, FTX, and WazirX, there's no such thing as too big to fail.
It costs $50-$60 to buy a cold wallet, so buy one and keep your long-term holdings there.
Believe me, there's nothing worse feeling than watching the market go up while your funds are stuck onto CEXes.
9) Not verifying news
There's no better time than bull run to spread fake news.
Last cycle we had #Litecoin Walmart Partnership, Apple BTC buy and several other fake news.
This cycle could be even worse, so verify the source before taking any action (buy/sell).
10) Clicking on the scam links
Every week, there's news regarding funds getting stolen.
Reason: Not checking the link before clicking on it.
Always double or triple check it, as it only takes a few extra seconds but will protect your hard-earned money.
11) No plan after exit plan
Most people's exit plan is to sell and keep their portfolio in stables.
Those who have been in this space for > 1 year know that stablecoins are not very stable.
In 2020-21, people made crazy gains only to put that into UST (an algorithmic stablecoin).
You can do a few things to minimize this risk.
A Diversify among a few stablecoins (not more than 15% into one stablecoin).
B Convert some of that into cash and spend on yourself.
C Invest a portion of that into real estate, precious metals, etc.
That's the wrap!
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