Why are you still losing money when you are clearly in a bull run?

Many people think that during a bull run, the crypto market rises across the board and that buying with closed eyes will make a profit, but the reality is that many people still lose a lot. Behind this, there are many pitfalls that are easy to fall into.

1. Timing of Entry and Position Management Errors

The rise of a bull run is never a straight line; fluctuations are the norm. Many people follow the trend and buy coins that have already risen significantly. For example, if a coin rises from 10 dollars to 50 dollars, and you jump in at 50 dollars, once it retraces to 40 dollars, you would directly lose 10 dollars.

Position control is equally critical: some people start with a small position to test the waters, and when they see the price surge, they increase their position at a high level, raising the average cost of their holdings, which amplifies losses during corrections; even worse, some operate with a full position directly, and when the price drops, they want to average down but have no funds left, leaving them to watch their losses expand helplessly.

2. Misuse of leverage accelerates losses.

Leverage is a double-edged sword. In a bull run, some people blindly use 10x, 20x, or even higher leverage in an attempt to amplify their profits. However, the volatility of virtual currencies is enormous, with daily fluctuations of 10%-20% being quite common. If one buys on margin with 10x leverage, a 10% drop in price will lead to liquidation, and even if there is a subsequent rebound, they would have already exited the position. Many people have been liquidated due to excessive confidence and leverage during a bull run, ultimately falling victim to minor fluctuations.

3. Choosing the wrong cryptocurrency, getting the direction wrong

A bull run does not mean that all cryptocurrencies rise together; most of the time, it is the mainstream coins that lead the surge, while altcoins perform unevenly. Some people chase high returns by specifically picking hot concept altcoins (such as "AI coins" and "metaverse coins"). These coins often have little actual value and rely on speculative hype for a short-term surge. Once the promoters exit, the prices can plummet rapidly, and it is common for those who chased the highs to lose 80%-90%.

Some people complain that mainstream coins are rising slowly, ignoring Bitcoin and Ethereum to invest in small altcoins, but when the small altcoins drop, the mainstream coins are still rising, resulting in missing out on both.

4. Take profit and stop loss are not in place

- Hesitation to take profits: Buying a coin at 10 dollars and it rises to 20 dollars, having made a double profit but greedily waiting for a higher point, ultimately it retraces to 8 dollars, turning profits into losses.
- Improper stop-loss: either set the stop-loss point too close (for example, sell if it drops by 5%), getting washed out by normal fluctuations; or simply not set a stop-loss, leading to expanded losses and an unwillingness to cut losses, resulting in deeper entrapment.

5. Frequent trading depletes the principal.

Some people think that there are many opportunities during a bull run, frequently trading all day long, but they overlook the accumulation of transaction fees. For example, with a fee of 0.1% each time and trading 10 times a day, the total fees in a year can exceed three times the principal. Worse yet, frequent trading is prone to mistakes; making a little profit can lead to losing everything due to a single error, ultimately resulting in a net loss.

6. Market chaos is hard to prevent.

- Manipulation by market makers: Market makers buy in at low prices, then push the price up to attract retail investors to follow suit, and finally sell at high positions, leading to a price crash, with retail investors left holding the bag.
- Misinformation: The project team spreads false good news (such as "coming to a major exchange"), influential figures hype it up, retail investors buy in at high prices, then the news falls through and the price plummets.

VII. Psychological factors magnify mistakes

In a bull run, greed and fear are magnified infinitely:

- Greedy people always think about selling at the highest point, missing the opportunity to take profits, turning gains into losses.
- Those who are fearful hesitate to buy at first, but when they see the price surge, they panic and enter at a high point without discretion, only to encounter a pullback right after buying, getting directly trapped.

It can be seen that making money during a bull run is not an easy task. Choosing the right coins, managing positions well, being cautious with leverage, setting profit-taking and stop-loss orders, reducing ineffective trades, and being wary of false information are all necessary to have a chance to profit. If these are not done well, a bull run can still lead to significant losses.