Countdown to the current bull market? 4 aspects of building and optimizing trading strategies

Source: Talking about Li and Talking about the Outside

If we take January 2023 as the starting point of this bull market, then as of now, this bull market has lasted almost 890 days. If we take October 2023 as the starting point of this bull market (that is, based on Bitcoin's price breaking through the high of 2022), then this bull market has also lasted almost 595 days. As shown in the figure below.

Additionally, from an overall trend perspective, Bitcoin's movement in this bull market is somewhat similar to that in 2021. If you enjoy the idea of "carving a boat to seek a sword," then the following two scenarios may continue:

One scenario is similar to the movement around September 2021, where Bitcoin may enter a new correction, such as pulling back to around $95,000, and then making another surge, which could push it above $150,000. After a brief frenzy from some altcoins, the market may then enter a new bear market cycle.

The other scenario is similar to the movement around November 2021, where Bitcoin may break through its historical high again, and after a brief frenzy from some altcoins, the market may enter a new bear market cycle.

However, I have noticed that some people online believe that Bitcoin will reach $200,000 by the end of this year. We consider this to be a very optimistic prediction. In other words, if Bitcoin really can reach $200,000 by the end of this year (for example, reaching $211,000 around the end of September), then the subsequent bear market cycle could see Bitcoin's bottom around $50,000 to $60,000 (perhaps around the fourth quarter of 2026), and in the next bull market, Bitcoin's price could potentially reach $350,000 to $400,000 (perhaps by the fourth quarter of 2028 or the second quarter of 2029).

Of course, all of the above is merely a casual guess based on the idea of "carving a boat to seek a sword." The market is difficult to predict accurately, as no one knows if any new black swan events will occur next. But regardless of which path Bitcoin takes next, and whether it reaches the $200,000 that some believe, if you still believe that history can rhyme, then it seems that the time left for this bull market cycle is not much, perhaps only a few months.

What we really want to express here is that each bull market cycle does not continuously present a parabolic rise; it always includes relatively healthy declines (corrections). If you have not made any money in the past 600 days of this bull market cycle, or if you initially made money but then lost it, then you should seriously consider and optimize your trading strategy moving forward.

In simple terms, the market cannot sustain a bull market, and a bull market cannot truly allow most people to make money. This is a harsh reality we must accept. Do not try to predict the so-called precise top during a bull market; the most important thing during a bull market is to seize the right opportunities to take profits in batches, rather than always thinking about perfectly selling at the top.

Moreover, if you firmly believe in the long-term narrative of a particular asset (such as Bitcoin), then as long as you extend your investment horizon and avoid unnecessary trading, the probability of losing money seems relatively low. However, as someone who has been through this, I can say that while it is easy to say, it is indeed quite difficult to do, because I have seen too many people enter this field with the fantasy of treating it as their ATM, hoping to quickly achieve large gains from small investments.

If we focus on a long-term investment perspective, we can still optimize and improve our trading strategies gradually through some methodologies, such as:

1. Mastering Necessary Basic Knowledge

I remember that many comments previously asked questions like: What do you think about the XXX coin I bought? Can I hold XXX coin for the long term? How high can XXX coin go? And so on.

Then I sometimes counter-question the person, asking if they can list three simple reasons for buying this XXX coin. The result is that the vast majority of people cannot articulate why they bought this coin; they basically bought it after hearing a recommendation from a certain teacher, or because they saw someone say it has potential, or because they felt the project's promotional material was impressive…

The outcomes for most of these people are predictable: either they end up losing their principal, or they are completely scammed and their positions go to zero. The number of people who can truly make money based on so-called teacher recommendations or personal luck is very few.

Some people hear that trading is risky, so they plan to engage in airdrops or play on-chain finance. As a result, some who want to do airdrops spend every day searching for various airdrop tutorials on Twitter or Google, only to end up confused, interacting with N new projects and consuming N GAS without achieving any real results, ultimately just buying a bunch of useless NFT images or clicking on numerous influencers' referral links to boost their points ranking. Meanwhile, those who want to engage in on-chain finance jump into various pools, only to find that the high APY advertised was never received, and they ended up becoming liquidity providers. They were attracted by the high yield, while the other party was actually focused on their principal, and some even fell victim to phishing, leading to their wallet assets being completely drained.

In this field, if you are merely investing, you don't need to learn any overly complex techniques, but you should prioritize mastering some necessary basic knowledge. For example, if you enjoy finance, the basic knowledge you should at least grasp includes:

• The concepts of DEX and CEX, and the differences in their financial product models

• What single-coin finance and dual-coin finance (impermanent loss) are

• What lending finance is, along with some corresponding platforms and methods (like Aave, etc.)

• What liquidity mining is, along with some corresponding platforms and methods (like Uniswap, etc.)

• What staking is, along with some corresponding platforms and methods (like Lido, etc.)

• Various yield aggregators, stablecoin finance strategies, structured products, restaking…

• Additionally, what on-chain tools or data can be used for financial assistance, and of course, the most important issue of protocol security assessment, etc.

In summary, you need to first clarify and learn some basic concepts related to finance, and then choose the products and methods that suit you best based on your preferences or risk tolerance, while continuously maintaining focus and research.

2. Optimizing Position Profit Strategies

In fact, regarding the topics of position management and trading strategies, we have already covered a lot in previous articles on Talking about Li and Talking about the Outside. In summary, the core message is simply: stay focused.

In past articles, we have shared that some people can achieve hundreds of thousands or even millions of dollars in profits through continuous small trades (for example, using trading bots) on hundreds or even thousands of MemeCoins, but this method is clearly not suitable for most retail investors.

For ordinary retail investors like us, focus often outweighs quantity. Don't think you need to buy everything (there isn't enough capital to allocate), and don't chase after whatever is trending. The optimal approach is to focus on 1-2 areas that you are most optimistic about.

If we look directly at the segmented categories in Coingecko, there are currently over 500 detailed areas in the crypto market, such as DeFi, RWA, AI, GameFi, DePIN, etc. The platform has listed over 17,000 projects (tokens), and one person's time and energy are basically insufficient to research all the projects in every field. Therefore, we should select 1-2 tracks that we are most optimistic about and delve into researching and tracking the project opportunities within them, while also keeping the number of projects (tokens) we buy and hold to no more than 5.

On this basis, we can further plan our positions based on our risk preferences, such as what proportion of the position is allocated to Bitcoin, what proportion is allocated to altcoins, and what proportion is allocated to MemeCoins…

Then, for each proportion, how much is for long-term investment, how much is for medium/short-term investment, what profit targets to set, and whether to establish clear take-profit/stop-loss points for medium/short-term investments…

In short, when we can maintain focus on specific matters, strictly execute our trading discipline within a system (that suits our trading strategy and indicators), and grasp the rules or rhythms of cycles, we will not be easily eliminated by the market.

3. Cultivating Specific Skills and Strengths

Everyone is an independent individual, and everyone has their own abilities or strengths. Once you have mastered the necessary basic knowledge and can optimize your position profit strategies well, the next step is to continuously upgrade yourself.

This may require considering your own interests, such as:

If you enjoy writing, then you might as well start a media channel like Talking about Li and Talking about the Outside, allowing you to regularly output your thoughts. Compared to input, output is a better learning method (i.e., output-based learning). Of course, if you are still quite shy and reluctant to share your thoughts publicly, you can first create a personal knowledge base on some note-taking platforms or share your insights within a specific circle.

If you enjoy speaking, you might also consider recording your learning results or thought summaries on some video platforms, or interacting with others through live streaming, gaining intellectual stimulation through continuous "face-to-face" communication.

If you enjoy data, you can try collecting various on-chain tools that you find useful and create a toolbox (such as tools for airdrops, arbitrage, finance, copy trading, whale watching, etc.) to conduct more targeted in-depth research on the market, projects, and other areas of interest, seeking those Alpha opportunities that others may not see for the time being.

If you enjoy technology, you might consider learning some basic coding or programming knowledge, or if you like candlestick charts, you can find some professional materials or books for necessary research… and so on.

In summary, in any field, if we want to avoid being eliminated by the market and continue to achieve profits or results, we need to persistently upgrade ourselves and stay ahead of others. Although sometimes, a person's luck may temporarily place them in a leading position, the ultimate competition is still about a person's level of professionalism. Instead of envying those who are ahead, it is better to build your own network.

4. Cross-Field Expansion

This point may be something that many people currently overlook. For example, some people may really enjoy the crypto field, but they simultaneously reject or look down upon the stock market, foreign exchange market, and other fields.

In the past, perhaps this mindset was workable, but now (and in the future) it seems it is not, because the current crypto market is no longer a niche retail market; it has begun to transform into a financial game involving more and more institutions (and even some countries).

We not only need to pay attention to changes within the crypto market itself, but also need to appropriately monitor the stock market (especially the US stock market), macroeconomics, and even international political situations. In other words, we can focus on executing trades specifically in Bitcoin, but merely understanding Bitcoin is not enough (even if you have thoroughly read the Bitcoin white paper and studied its code). To better achieve trading goals, you may also need to pay attention to trends in gold, the US stock market, and so on. Mastering one thing but failing to achieve effective profit targets is also a waste of time.

In addition to related fields, depending on individual time and energy, we can even consider expanding our knowledge or involvement in other fields.

Of course, besides the points mentioned above, there is one crucial aspect: maintaining physical health. This field operates 24/7, but our bodies need rest and moderate exercise. Do not sacrifice your health in pursuit of so-called potential profits.