Bull Market Guide: 6 Trading Rules to Improve Your Trading Success Rate

Author: @game_for_one , Crypto KOL

Compiled by: Felix, PANews

Many crypto people have many concerns, such as worrying that this is the last cycle in the crypto field, uncertainty about how long the upward trend can last, and social pressure from others' poor performance. A series of fatal flaws undermine many people's decision-making:

• Distraction: Chasing every hot trend instead of focusing on trading
• Pessimism and hesitation: Uncertainty leads to weak action, inaction, and even non-participation in a meaningful amount of time.
• Lack of confidence: Lack of due diligence on projects to build the confidence needed to stick with them amid volatility
• Lack of profit-taking strategy: Completely closed positions at the lowest price of Bitcoin due to fears that the trend is over

Based on this, the following recommendations are made:

Narrow your focus

Stick to trading specific assets within one or two chains.

Choose your game: on-chain or off-chain.

If you think you can do anything, you are fooling yourself. Optimize to focus on your trade size, strength, and the highest ROI given the current market conditions. Once you take that into account, you will most likely have a clear idea of where you should trade and what you should do.

Develop a trading strategy

Know when to invest, trade or speculate. Most people confuse these, a simple framework:

• Investment: Based on the theoretical level, backed by fundamentals and technical aspects. Information asymmetry will give you an advantage, and the market you bet on will be repriced within 1-3 months.

• Trades: Focused on technicals, catalysts or narratives (e.g. events, announcements). These trades last less than 2 weeks but can turn into investments if price/narrative feedback reinforces.

• Speculation: Carefully calculated gambles, trading moves driven by news (think Musk tweeting about a market move). These trades are short-lived and disappear after a few hours or days.

Stick to the plan

Create a clear trading plan:

• Market Cap: Know Your Range

• Profit taking: Rules for adjusting your positions, don’t abandon them out of fear

• Valuation: How big can the asset be and how quickly can it be achieved?

• Plan failure: A breakdown in fundamentals or technicals - know when and how to lighten your position (partially or completely). It could also be due to broader market moves or based on dates (e.g. uncertain macro data is coming out, which could be a good time to take profits, knowing you will be able to buy back in at a lower price)

Know yourself

Identify your weaknesses: lack of experience, skill gaps, optimism/pessimism bias, poor scale management, or lack of time.

If there is a weakness in the game that is more than others, skip it. Trade in the areas where you have an advantage.

Continuous Improvement

Reflect on each transaction: Which ones succeeded, which ones failed, and why? Was it a process/decision-making problem, or was the decision good at the time but the result bad? The goal is to make fewer mistakes in transactions, make comprehensive analysis and make continuous adjustments to increase the success rate of transactions.

If you skip this step, you won’t make any progress and will end up in a mental/profit rut later in your trading journey.

Don’t work in isolation

Trustworthy market friends are essential. They will give you the courage to take responsibility and help you make up for your weaknesses.

The best arrangements are mutually supportive—you cover their weaknesses and they cover yours.

Quality over quantity: More friends isn't always better. You need high-success, trustworthy friends you can count on who are at the same or higher level than you in the games you play.

Stay connected with other stakeholders outside of the niche you focus on. They will help you understand macro trends, cycles, and other events you are currently focusing on. This will ultimately feed back into your overall perspective and trading.

Related reading: Data explains how Bitcoin holders behave after reaching new highs?