Investing in any financial asset can be a tricky exercise, but this is especially true for the rapidly evolving cryptocurrency market, which comes with its own unique set of pitfalls and challenges.

A popular saying is that it takes 10,000 hours to master a skill and become an expert. In cryptoland times, this is measured in market cycles, which put every trader through a few roller-coaster rides of volatility as a crash course in market navigation.

Here are five important lessons every trader should learn when it comes to investing in cryptocurrency bull markets.

Rule #1: No one has ever gone bankrupt by taking profits

Since the early days of crypto, the community has prided itself on its “hodl” nature, with the volatility in the price of Bitcoin (BTC) and other tokens shaking coins from paper hands and into those of true believers who make up today crypto-aristocracy.

Few like to talk about the “not your keys, not your crypto” movement, partly because liquidity and the speed of money are important factors in a healthy functioning market, but also because the simple fact of holding on as the market rises and then falls has resulted in fortunes made on paper that simply fade with the onset of a bear market.

When a cryptocurrency has made significant gains, especially if the price has gone parabolic on a near-vertical line on its trading chart, the best thing to do is to take profits and allocate those funds either to stablecoins or to different assets whose trading cycles are not exhausted.

The thing is, nothing keeps going up forever, and in the cryptocurrency market, the fall can often be as quick and as hard as the rise.

If selling a token is difficult due to personal attachments and a long-term bullish outlook, it is worth considering that after a parabolic move and a consolidation phase, it is possible to acquire even more of tokens with the funds collected once the dust settled. .

Rule #2: Don’t FOMO – there’s always another room

An experience almost every crypto investor has had is wanting to buy a particular coin and resisting, only to see it take off like a rocket the next day and go on a two-week moonshot that sees its price increase tenfold.

At this point, FOMO – the fear of missing out – kicks in and becomes so strong that a large market order is placed and filled at the top of the market. The result is usually an unexpected pullback where the newly opened position loses half of its value in just a few hours as early holders follow rule #1 and take profits.

Don’t FOMO!

Once a room has started to go parabolic, just look sideways. Mentally congratulate those who have caught up in the rally and repeat the following: “There is always another token.”

A quick survey of past bull markets will show boatloads of token pumps and token dumps in both bull and bear markets, proving that there is no shortage of opportunities to jump into high-flying projects early and register gains. solid gains amid fast-paced hype cycles. which the cryptocurrency market is known for.

Rule #3: It won’t be like the last time

Technical analysts often like to claim that crypto follows a series of predictable cycles, which they use to validate certain pieces of their trade. Maintaining this perspective allows them to apply past market cycles to the current price chart as a means of predicting what is to come next.

In 2021, this belief led to year-long proclamations that Bitcoin would hit $100,000 and beyond, but it broke above $69,000 and limped through the end of the year with no sign. of the long-awaited summit.

Over the year the market was compared to the 2017 bull rally, then the 2013 rally and finally a combination of the two rallies as chartists struggled to explain what part of the cycle the market was in. and where he would go next.

Ultimately, the 2021 rally saw a unique double top, unlike any previous market cycle, and could possibly extend into 2022, in line with some’s prediction that the four-year cycle is getting longer.

The main point to remember is not to expect the market to work the way it has before and focus on trading the market you have. Follow price trends and be sure to keep Rule #1 and Rule #2 in mind.

Related: US Senators Lummis and Gillibrand Reveal They’re Working on Bipartisan Crypto Legislation

Rule #4: Play Trend Cycles Carefully

In every crypto bull cycle, there is a sector that comes out of nowhere to dominate the headlines and produce 100x gains.

2021 has seen the rise of memecoins, the arrival of non-fungible tokens (NFTs), and the advent of gambling to win, much to the chagrin of Bitcoin maximalists and those “in it for the tech”.

When new trends like these start to emerge in the cryptocurrency market, it is wise to keep in mind the power of the cryptocurrency hype cycle and, if possible, be a little exposure to some of the tokens in this sector that have yet to start moving.

This is strictly a mostly short-term game and is more often than not a case where rule #1 is applied in full, as the vast majority of newcomers to the altcoin market break out during the first year.

Rule #5: Don’t Spend All Your Time Focusing On The Crypto Market

This final rule is intended to help maintain a healthy life balance and peace of mind. There is much more to life than investing in cryptocurrencies or any other market.

Just as all investment portfolios should be well-diversified, so should your day-to-day experiences around the world.

A vast majority of big crypto moves happen within days or weeks, and the rest of the year is full of sideways markets and long-range trading.

Do a decent amount of research, make your choices, follow rule #1, then use some of those profits in other parts of life to have more fun and diversify your experience to better enjoy the most prized possession. of all: time.

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The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.