A Veteran Trader's Bull Market Guide: The Higher the Leverage, the Earlier You Should Take Profits; Never Fully Exit a High-Potential Coin in One Move
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A Veteran Trader's Bull Market Guide: The Higher the Leverage, the Earlier You Should Take Profits; Never Fully Exit a High-Potential Coin in One Move
Never put yourself in a position where a trade going against you would result in a margin call.
Navigating Web3 tides with focused insightsAuthor: David G
Translation: TechFlow
David's Bull Market Profit Guide: How to Make Money and Avoid Getting Wiped Out
A bit more seriously today—sharing some hard-earned lessons I've learned over the years, in hopes that reading this will help you avoid a few pitfalls.
It's important to emphasize that the focus of this article is execution—specifically, how to actually pocket profits during a bull market. I won't be discussing research, analysis, or asset selection (those are relatively straightforward parts).
The three key elements for successful trading in a bull market are:
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Portfolio structure
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Leverage usage (when and how to use it)
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On-chain trading
Portfolio Structure
How you structure your portfolio largely depends on your capital size. Whether you have $100K, $1M, or $10M in assets, the following core principles apply.
First, your portfolio should be built around high-quality collateral assets. For me, that means BTC and SOL. During sideways or bear markets, when I sell assets, I typically convert into stablecoins ("stables"). But in a bull market, I prefer to reinvest profits into strong blue-chip assets I believe in. The advantage of BTC and SOL is that they're not only quality assets—they can also serve as collateral for borrowing, increasing capital efficiency.
Currently, my portfolio is almost entirely composed of BTC and SOL. But as the market cycle progresses, I'll gradually shift a larger portion into stablecoins to lock in gains.
Leverage Usage Strategy
(The following advice is aimed at beginners in leveraged trading. If you're already an experienced trader, feel free to follow your own strategy.)
First, forget the leverage advice you see on Crypto Twitter (CT). Leverage is simply a tool—to increase capital efficiency and seize asymmetric risk/reward (r/r) opportunities.
It’s crucial to understand that leveraging major assets (like BTC, SOL) is completely different from leveraging altcoins (smaller market cap tokens). For example, going long SOL versus going long a small-cap token with a $500M market cap may both seem like "longs," but the risks and execution strategies are entirely different. This may sound obvious, but many people overlook it.
A basic rule: Never let your altcoin leveraged exposure exceed 1x your portfolio value. This helps prevent excessive risk while still leaving room for meaningful gains.
For example: suppose you have $100K in assets denominated in SOL, used as margin for perpetual futures (perps). In this case, your long position in altcoins should not exceed $100K. Altcoins are extremely volatile—if you're not a top-tier trader, you could easily get liquidated. But even so, you'd still achieve a 2x portfolio long exposure ($100K in SOL + $100K in alts), which is already substantial. The key is to avoid greed.
For major assets (like BTC, SOL), in certain specific situations, you might go higher—say 3x to 5x leverage. However, this should only be done in scenarios where the risk is well-defined and the expected return is exceptionally high.
Key Points on Leveraged Trading
When using leverage, the most important principle is: The higher the leverage, the earlier you should take profits.
There’s much more to discuss about perp trading, but due to time constraints, I can’t go deeper here. I recommend following these excellent traders:
In addition, check out @CryptoCred's YouTube trading series for more practical trading techniques.
Finally, always remember: Never put yourself in a position where a single adverse move wipes you out. This is the most fundamental survival rule in trading.
On-Chain Trading: Capturing Hidden Gems in a Bull Market
Now comes the more exciting part. If your portfolio structure is sound, on-chain trading can deliver massive returns—but again, this only works if your structure is correct.
Why do I say this? Because many people are doing on-chain trading incorrectly. The core goal of on-chain trading is: pursuing outsized returns, not accumulating small profits to grow capital. In a bull market environment, your sole focus should be identifying opportunities that offer exponential upside. These are the kinds of opportunities that can truly transform your portfolio—and even your life.
In on-chain trading, your goal is to find and hold a few "super gems"—tokens that significantly outperform everything else. This may contradict traditional investment wisdom about "diversification," but as Warren Buffett said, "Diversification is for people who don’t know what they’re doing."
Crypto is a reflexive market—meaning once an asset starts performing well, it tends to attract more capital, making it perform even better. You only need one or two such super gems to change your life. That should be the central objective of your on-chain trading.
How to Manage Your Gem Positions
Once you’ve caught a big gem, never sell your entire position at once. Instead, gradually reduce your position during the uptrend while keeping a portion to participate in further upside.
For example, if you bought a token at a $5M market cap, you could sell 10% when it reaches $50M; another 10% at $100M; and another 10% at $250M. This way, you lock in profits incrementally while maintaining meaningful exposure.
Crucially, the upside potential of a true gem may far exceed your expectations—so always keep a portion to capture explosive future gains. Continuing the example: suppose by the time the market cap hits $500M, you've sold 70%, but decide to hold the remaining 30% until it reaches $3B. If it actually gets there, that final 30% could generate more profit than all your previous partial sales combined.
This is exactly the power of the "scaling out" strategy: locking in profits step by step to reduce risk, while preserving exposure to massive future gains. When dealing with gems, patience and strategy matter more than short-term profits—because catching one of these opportunities can completely transform your financial outcome.
Mental Preparation: Handling Price Volatility
The hardest part of holding a large position—especially when it makes up a significant portion of your portfolio—is coping with extreme price volatility. No matter how promising a token is, it will experience 50–70% drawdowns during its rise—and possibly multiple times. You must mentally prepare for this kind of movement and stay calm when it happens, avoiding panic selling.
Using the above strategies, you can better capitalize on on-chain opportunities in a bull market, capturing super gems while avoiding emotional decisions that cause you to miss out on huge gains.
Remember: in crypto, your returns come from your ability to endure volatility.
Most people cannot withstand wild market swings—that’s why they never achieve extraordinary success. Volatility is your friend. It’s precisely what makes crypto assets so attractive and profitable.
As you go through more cycles, you’ll gradually become accustomed to these violent swings. Eventually, you may even become numb to them—and perhaps less reactive to other emotional events in life. But that’s okay—at least you’ll be rich.
Mindset Management: The Real Battlefield of Trading
At its core, trading is a psychological battle—and your greatest opponent is yourself. If you can learn to execute your strategy at a high level, you won’t just succeed—you might achieve something extraordinary.
Staying mentally clear is essential. Whether it’s prayer, meditation, or walking, find what works for you and make it a daily habit to maintain focus and rationality in trading.
At the same time, stay humble. Always be prepared to lose everything—and even if you do, believe in your ability to rebuild.
Conclusion
In the crypto market, volatility is both a challenge and an opportunity. Only those who can endure it will seize the rewards and achieve great success. May you walk this path with clarity, humility, and confidence.
Good luck—and see you in the bull market!
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@d_gilz
