To make money in a bull market, you need to first understand these two basic strategies

Source: Talk Li Talk Wai

Recently, many new partners have followed the Talk Li Talk Wai public account, and we receive new messages every day. I have noticed that many people may have rushed into this circle without any patience to read historical articles or e-books. They tend to directly ask what coins they should buy now or how much XX coin will rise.

Over the past few years, I have seen too many newcomers who only entered the market during a bull market, yet a significant proportion of them ended up losing money during that same bull market. One of the viewpoints we often express in previous articles of Talk Li Talk Wai is that for newcomers, there are two crucial points to remember after entering this field: first, preserve your capital; second, do not engage with what you do not understand.

However, very few people can truly understand and implement these two points. Many newcomers come in with the intention of making quick money or even getting rich overnight. Any advice that hinders their path to wealth is often disregarded, or they may seem to understand it theoretically but fail to execute it in practice.

There is a difference between speculation and investment. Simply put, if you enter the cryptocurrency market with a speculative mindset, your success will depend not only on luck but also on your ability to acquire and process information, the accumulation of knowledge in your focused area, and your personal cognitive level. On the other hand, if you approach the market from an investment perspective, the key to success lies more in the relatively mature investment strategy you build based on your knowledge accumulation and cognitive level.

However, different people may have different backgrounds, experiences, and capital sizes… Therefore, there is almost no perfect strategy that suits everyone. A so-called mature investment strategy is relative and needs to be understood in parts. In this issue, we will continue to discuss two basic strategies.

1. Strategy Based on Time Frame

This should be easy to understand. The so-called time frame means we first need to clarify whether our investment plan is short-term or long-term.

In other words:

What do you consider short-term: a few days, a few weeks, or a few months?

What do you consider long-term: a few months or a few years?

Different people may have different interpretations of this. I remember a while ago, a friend bought a certain altcoin that halved in value, and he messaged me, frustrated, saying that the XX altcoin he was holding long-term had halved, and he felt he couldn't hold on anymore, asking if he should cut losses or switch positions.

I asked him: How long have you held this coin?

He said: I bought it two weeks ago.

Then I was puzzled; apparently, holding for two weeks was considered long-term for him. However, in such situations, I generally do not provide specific guidance on switching positions. First, my personal principle is not to give any specific buy or sell guidance on trading. Second, I cannot accurately predict market trends or the price movements of any coin. Third, I have no obligation to be responsible for others' gains or losses. The only advice I can offer is to have the other party quickly list three reasons for buying this coin in the first place. If they can quickly list them and they seem persuasive, then continue to hold patiently for a while; otherwise, consider reducing their position and conducting a necessary review and summary.

Regarding the time frame, my understanding (i.e., the strategy that suits me) is:

In the long term, I generally operate on a bull-bear cycle, meaning that 4-5 years is my small investment cycle. What I mean by long-term is the continuous accumulation of this small investment cycle. For example, in the past few years, my main operation has been quite simple: I used 80% of my capital to dollar-cost average into BTC over 20 months (buying once a month). I have shared the specific operations in previous articles of Talk Li Talk Wai, so I won't elaborate further here.

In the short term, I generally consider 6-12 months as the minimum time unit. For this short-term operation, I mainly split 10% of my capital to buy some altcoins, but my trading frequency is relatively low, meaning I might not make many trades in a year, and I strictly control the number of altcoins held to no more than five. For instance, I bought a bit of FET on May 30, 2023, a bit of SOL on September 10, 2023, a bit of AVAX on November 12, 2023, and a bit of BANANA on August 4, 2024. I have mentioned these operations in previous articles of Talk Li Talk Wai, so I won't go into too much detail here.

The main purpose of buying these altcoins in the short term is to maintain a certain sensitivity to trading, and ultimately, the goal is to convert everything into BTC.

In summary, different people may view or consider the dimension of time differently, so try to find a time frame strategy that suits you. If you are very optimistic about the future of the cryptocurrency industry and plan to invest long-term, what you may need is patience and strict trading discipline. If you only hope to speculate during a bull market, then don't just think about making big money; also consider how to respond if you lose money. It's best to find some indicators (like MACD, Fibonacci, etc.) that can directly assist you in making judgments and strictly implement a profit-taking/loss-cutting plan. If you don't have a high probability of certainty, don't easily leverage yourself.

2. Strategy Based on Position Management

Actually, when discussing the time frame above, I have already mentioned my position management, which mainly adopts an 8:1:1 allocation strategy in this cycle, where 80% of the position is used for dollar-cost averaging into BTC, 10% is used for buying altcoins, and 10% is left untouched.

I remember in many previous articles of Talk Li Talk Wai, we have consistently advised to allocate at least 50% of the position to BTC, while the remaining 50% can be planned according to personal preferences. This way, even if the latter loses all, BTC will help cushion the blow, preventing you from losing all your capital too early and leaving this field.

Especially for newcomers who have just entered this field, many may not have a deep understanding of the term risk management. As one partner in the group said before: perhaps only after truly losing money and suffering significant losses can some people really understand what risk management means.

Good position management is actually one of the most important aspects of risk management. It is not an exaggeration to say that once you have done a good job in position management, it is not too late to discuss safety awareness, wallet security, and other matters.

Recently, many messages in the public account have been asking me what altcoins to buy now. For some messages, I will respond and say: If you really want to participate, consider buying some BTC first. If you want to buy altcoins, you can consider buying some ETH, SOL, or some leading projects under popular narratives. Whether for buying or selling, it should be done in batches, not all at once, while also implementing a profit-taking/loss-cutting plan.

However, some individuals seem to disagree with my vague responses, saying: What you mentioned is too expensive; I have little capital and can't afford it. Do you have any cheap coins to recommend, preferably something that can increase tenfold?

I: The "cheap" coins you mentioned do exist, like DOGE, PEPE, WIF, but I don't know if they can increase tenfold next. Perhaps a 50%-100% increase next year is still possible.

Then the other party said: I don't care for coins that only double; isn't the point of entering this coin circle to buy something that can at least increase tenfold? Otherwise, why would I enter this coin circle?

I: …

Although I have seen many similar messages and questions, I still feel a bit helpless each time I see them. Unfortunately, the market is not run by me, and it is not a small shop; otherwise, I wouldn't suggest cutting prices for these people. In the future, if I encounter similar questions, I will refrain from responding, as replying to these questions seems to waste time without any practical significance.

There is another type of person who, after entering this field, may have listened to recommendations from certain teachers or KOLs, invested heavily in some altcoins or meme coins, and then got stuck. They leave messages asking me: I am fully invested in altcoins and stuck; should I switch positions now? What coin should I switch to in order to break even?

For this type of question, I actually have no answer. Besides admiring their courage to go all-in on altcoins, I have nothing more to say. The only advice I can give is: calm down and seriously think about your position management issues.

Additionally, there are those who enter this circle because they encountered a so-called "noble person" who was eager to help, leading them to a shady exchange and getting scammed, or even falling into a pig-butchering scheme or participating in a Ponzi scheme. They then message me asking if I can help find the corresponding scammers or project parties to get their invested money back. For such questions, I can only say: I am just a small blogger and do not have that kind of power. If you encounter such issues and the amount is small, consider it a "tuition fee." If the amount is large, you should report it to the police, or if it's inconvenient to report, just treat it as a very expensive "tuition fee."

So, why do I always consider position management to be very important?

Because it directly determines whether you can earn money in this field for a long time. Unless you believe you are the chosen one or consider yourself a gambling god, you should honestly plan your positions and not easily trust those so-called perpetual profit masters. Don't envy those netizens or group friends who became rich overnight, and don't casually ask others (especially strangers) what coins you should buy to get rich. In my cognitive framework, those who have such thoughts are likely far from truly making money in the long term.

Continuing with my example, although I also bought SOL in this cycle, I did not choose to go all-in. From the current market trends, it seems I missed the opportunity to acquire more wealth. If I had chosen to go all-in on SOL instead of hoarding BTC, I would probably be very happy now, right? But… there are no "ifs." I had 100% confidence in hoarding $20,000 in BTC but lacked the confidence (or courage) to go all-in on $20 in SOL. In other words, only strategies that suit you are the best, not possibilities that you cannot even confirm.

Altcoins may indeed offer huge short-term returns, but they often come with significant risks. Since my risk tolerance is relatively low, I have not chosen to go all-in on any altcoins in the past, and I certainly won't do so in the future. For example, in the last bull market of 2021, aside from some leading projects that outperformed BTC, such as ETH rising about three times and SOL increasing 79 times… many altcoins also had impressive gains. However, in the bear market, most altcoins plummeted by 85%-95% or even more. The ICP I bought for $100 in the last cycle even dropped to $3 at one point, but I only bought a small position of $50,000 and later just left it alone.

Although I know that in this new bull market, some altcoins will eventually outperform BTC, I still decided to hoard BTC with 80% of my position. I know I will miss some bigger opportunities, but to me, missing such potential opportunities is not the most important thing. The most important thing is to seize those opportunities that should not be missed. Altcoins can accumulate wealth in the short term, but Bitcoin can ensure the long-term safety of that wealth, and I will always prioritize safety.

As for the specific classification of position management, we have mentioned this topic multiple times in previous articles, so we won't elaborate too much here. Interested friends can search and review historical articles. Here, we will simply recap and explain:

- For capital over $1 million

You should prioritize safety and adopt a relatively conservative position management strategy. For example, allocate 80% of your position to projects like BTC, ETH, and SOL, with the specific allocation ratio depending on personal preference, to maintain the overall safety and relative stability of your assets.

Then, you can split the remaining 20% into N parts, such as $3,000-$5,000 each, and conduct research based on your time and energy to buy some mid-to-low market cap projects for short-term trading operations. If some of the money from this operation incurs losses, don't worry too much. If you successfully make money, promptly take out the profits to keep them untouched or reinvest them into the aforementioned BTC positions.

After such basic configuration and operations, along with reasonable profit target setting (don't tell me you want to earn tenfold in a year after buying BTC; however, if you extend the time frame to ten years, then tenfold is still possible), by sticking to a complete cycle, your assets should easily increase to a level of $3-5 million or more. Moreover, as time goes on, pay attention to accumulating your BTC holdings while appropriately lowering your profit multiple targets to achieve greater long-term asset safety.

- For capital under $100,000

If your capital is between $10,000 and $100,000, you can directly refer to the examples above. The core idea is still to allocate a large proportion of your position to mainstream crypto assets like BTC.

Here, let's focus on an example for capital under $100,000:

At this point, your position management should assess the relationship between risk and return. You can refer to traditional financial concepts, which can be divided into conservative, balanced, and aggressive categories.

If you are conservative, you might consider allocating 50% of your position to BTC, 30% to projects like ETH and SOL, and the remaining 20% to buy leading project tokens under popular narratives.

If you are balanced, you might consider allocating 30% to BTC, 30% to projects like ETH and SOL, and the remaining 40% to buy leading project tokens under popular narratives.

If you are aggressive, you might consider allocating 30% to BTC, 30% to projects like ETH and SOL, and the remaining 40% to buy low market cap project tokens or meme coins.

Of course, these are just my personal examples, and you can adjust and optimize the specific ratio based on your situation. For instance, if you only have $1,000, you might choose to ignore BTC trading for now and directly research low market cap altcoins or meme coins. However, try to avoid participating in Ethereum chain transactions and instead choose chains with low gas fees like Solana or Base; otherwise, frequent trading gas fees will consume a significant portion of your capital.

If you do well in this regard, after a complete cycle, the overall potential (opportunity) could be 5-10 times (or even more), but you must also control the number of coins in your position. My suggestion is to keep it to a maximum of 20; otherwise, you may spend a lot of time and energy researching or monitoring projects. Of course, your ultimate goal should also be to accumulate your BTC holdings. The money you earn should not be used to buy more altcoins but should also focus on increasing your BTC holdings.

If you currently do not know which category you belong to, I suggest not buying anything; buying may lead to losses. If you have time and energy, you can learn more about some knowledge or concepts in the crypto field or participate in and experience some projects. Opportunities will always be there; this industry is still in a relatively early stage, and there is no need to rush in and expect to make big money (the actual result may be losing money).

In summary, whether your capital is $1 million or $1,000, although the strategies may be completely different, the core logic of investment is actually consistent: to achieve a balance based on time frame and position management: maximizing returns + minimizing risks.

As I write this, I suddenly remember two interesting little things.

One is that a few days ago, a new partner followed the Talk Li Talk Wai public account and directly messaged saying: I have no money but want to join your group. I feel that the $55 entry fee for your group is too expensive; can you invite me to the group to learn first, and I will pay you back when I make money later?

How should I put it? There are many ways to get something for free; for example, you can research how to get airdrops or how to play arbitrage, etc. Alternatively, you can consider joining other bloggers' free circles for learning and communication. There is no need to expect to get something for free everywhere.

Another is that I remember a while ago, a new partner messaged asking: Is it illegal to do self-media like you now? I also want to do one, but I don't know if it's allowed. How much money can you make doing this self-media?

I don't know if doing self-media in the crypto space is illegal, but I know there are many such self-media outlets now. To be clear, as long as you are not using self-media to engage in illegal fundraising, pyramid schemes, or providing deposit and withdrawal services under the guise of crypto, then theoretically, sharing your personal views on this field is not illegal. Although our management is stricter compared to some Western countries, we still have basic freedom of speech here.

Many people always have high aspirations but lack effective execution. If you believe in something, go for it; if you don't, then don't. Many choices are that simple. For example, BTC has been called a scam by many people over the past decade, but that hasn't stopped BTC from increasing over 1.5 million times (158460270.98%). Throughout this process, buying and selling BTC has been free; no one can stop you from holding BTC.

As for whether doing self-media is profitable, it depends on your original intention and purpose. I don't know about others, but perhaps some crypto bloggers can earn millions or tens of millions a year through self-media. However, compared to the time and energy I personally invest, Talk Li Talk Wai is basically not profitable. Doing this is more based on my personal hobby and interest. If I only hoped to make money through this self-media, I probably wouldn't even be able to pay my property fees. My core focus is still on hoarding coins (trading).

In short, the articles of the Talk Li Talk Wai public account are aimed at everyone. There are no entry barriers or limits on the number of followers; everyone can read and freely leave comments for communication under the articles, which can basically meet the learning or communication needs of most people. However, the maximum limit for the group is only 500 people, which is not aimed at everyone. The group serves more as a "bridge" and "connection," mainly to meet the needs of a small number of people, allowing those who need it to find like-minded individuals for deeper communication. The public account does not need to set any entry barriers or do any liquidity management; having 10,000 followers or 100,000 followers makes no essential difference to me. However, the group needs to set a basic threshold for filtering and also requires liquidity management to maintain a certain level of activity.

Whether trading, doing self-media, or managing a group, we need to think about the essence or underlying logic of these activities and clarify our ultimate purpose or goal in doing them. The crypto market currently has millions of tokens; we need to understand where the market's liquidity comes from and how to choose based on time frame and position management. There are many self-media bloggers focused on the crypto market, and there are various forms of groups as well. Different bloggers or groups may have their own characteristics. For example, the characteristic of Talk Li Talk Wai is long articles + methodology, which is more suitable for those who are patient and cannot directly provide you with so-called wealth codes or secrets to getting rich. Therefore, you should consider what you need most right now and only follow those bloggers or groups that can help you. Many people have not made money on BTC, but you cannot blame BTC for not being freely tradable. Many people complain about certain bloggers being foolish, but you cannot blame these bloggers for hindering your freedom of thought.

Many times, people choose to envy others' fate or good luck while neglecting themselves. We cannot change what has already happened, but we still have the opportunity to make our own choices about the future. Sometimes, choice is more important than effort, but we also need to strive to preserve learning and maintain thinking; only then do we have the opportunity and ability to make choices. Choice is not about luck or gambling; it is a result derived from personal experience, knowledge accumulation, and resource integration.

Note: The above content is merely personal opinions and analyses for learning and communication purposes and does not constitute any investment advice. Any projects or websites mentioned in the article have no direct interest relationship with Talk Li Talk Wai (Talk Li Talk Wai does not accept any advertisements from project parties). Please evaluate the safety of corresponding projects or websites on your own. Investment always carries risks; do not enter situations you do not understand, and do not play in situations you cannot afford to lose.