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Risk management is crucial to avoid quick losses when the market reverses.
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Technical analysis helps identify market trends and establish trading strategies.
A bull market is every Cryptocurrency investor’s dream, but the reality is often disappointing: according to data from BexBack’s chief analyst, up to 75% of traders lose money in a bull market. A bull market should be the best time to take profits, so why don’t most traders take advantage of the opportunity? Today, we’ll delve into the reasons behind this phenomenon and share strategies to avoid becoming part of this 75%.
Why do 75% of traders lose money in a bull market?
1. Chasing the market: the trap of emotional trading
In a bull market, many traders fall into fear of missing out (FOMO) and blindly chase rising prices. However, when prices correct slightly, they panic and sell, resulting in the classic “buy high and sell low” mistake.
2. Lack of risk management
Excited by the strong momentum of a bull market, many traders neglect the importance of managing risk. They may invest too much in a single trade or fail to set stop loss orders, leading to quick losses when the market reverses.
3. Reliance solely on spot trading
Bull markets rarely follow a straight upward line, and corrections and volatility are common. Many traders who rely solely on spot trading miss out on profit opportunities during downturns and instead passively wait for prices to recover.
4. Improper use of leverage
While leverage is a powerful tool for increasing profits, its misuse or lack of understanding can lead to significant losses. Trading with high leverage can result in margin calls or liquidation even with small market fluctuations.
How to avoid becoming part of the 75%?
To achieve stable profits in a bull market, traders must adopt the right strategies and manage risks effectively:
1. Create a clear trading plan
Set your trading objectives, risk tolerance and stop-loss/target levels before entering the market. Stick to your plan and avoid making emotional decisions.
2. Use futures trading
Unlike spot trading, futures trading allows traders to profit from both bull and bear markets. Corrections during a bull market provide excellent opportunities and futures trading allows you to capitalize on these movements.
3. Use leverage wisely
Leverage amplifies both profits and risks. Beginners should start with a lower leverage (e.g. 10x or 20x) and gradually increase it as they gain experience.
4. Practice with a demo account
For beginners, it is essential to practice your trading skills before investing real money. Find an exchange that offers a demo account so you can practice futures trading and leverage strategies in a risk-free environment.
5. Apply technical analysis
Learn how to use technical indicators (such as MACD, RSI, etc.) to identify market trends and establish trading strategies based on key support and resistance levels.
6. Choose the right trading platform
A stable and secure trading platform with solid tools and support significantly improves your chances of success.
Which exchanges offer demo accounts?
It is very important that exchanges are simple and offer a demo account. For most novice and inexperienced traders, this is an effective way to avoid losses. He BexBack exchange It is recommended to use demo trading before making real profits until you are sure that you have established a stable and profitable trading system. As a professional cryptocurrency derivatives trading platform, BexBack offers complete support to traders. What are its advantages?
Conclusion
If you don’t want to be part of the 75% of those losing money, try BexBack today. Register now to claim your 100% deposit bonus, 10 BTC demo account and $50 bonus and use professional tools and strategies to take advantage of every opportunity in the bull market.
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