Bull runs are a perfect opportunity to make juicy profits by taking advantage of the constant increase in the price of an asset. These trends generally do not happen out of the blue but are formed little by little into higher maximums after each accumulation range, where capital is “pooled” and then upward distribution begins.
However, it is necessary to highlight that bull runs are not a direct line towards a new higher price, especially if we are talking about volatile assets such as cryptocurrencies and/or gold. In general, after reaching higher points and hitting some resistances, the price can drop violently and thus, we will miss out on better opportunities to position our orders, which is why we must be patient. In this opportunity, we are going to review 4 secrets to trade bull markets successfully.
Disclaimer: this guide shouldn’t be considered investment advice. All the information provided by AltSignals and its writers is not professional advice and was created for educational purposes only. Never invest more than what you are able to lose and always request help from a professional financial advisor.
Determine accumulation ranges
Accumulation ranges are areas where the price can lateralize or oscillate between resistances and supports for a certain period of time, in an attempt to “accumulate” capital. During bull runs, this money will always break this range to the upside (overcoming resistance levels) and hit new higher highs.
Although waiting for the price to break resistances and obtaining our gains is a relatively safe decision, there is no reason not to place orders while the price touches support levels and rejects it, since it will probably return towards resistance and you will be able to earn profits during said movements.
Wait for pullbacks to trade bull markets
As we have seen in the current Bitcoin bull run, where the price quickly reached $12,000 levels and immediately afterwards collapsed to 10,500, thus dropping $1,500 in a matter of minutes. This liquidated many long orders that had been positioned with stop loss at levels between $10,600/11,300. This usually happens in crypto because market makers are able to detect liquidity pools in stop losses of multiple positions, which are usually the same depending on leverage and price fluctuations.
Since the exchange does not have enough money to pay all those people who are leveraged and whose Take Profit levels are betting on an upward path, the market is always going to seek to liquidate these positions at some point. To trade bull markets, we must be active to trade right after the pullback, thus taking advantage of minimum price levels and winning bigger runs.
Always choose a sell price (target price/take profit)
If you don’t set a price target, it’s like you’re not trading at all. It is useless for you to buy an asset and for the price to rise excessively (giving you huge profits) and then return in a pullback, leaving you now with losses. Each trade must have its stop loss and take profit levels to ensure profits and stop possible losses.
It does not matter if the price increases beyond our TP and we miss this route because, as mentioned above, there will always be pullbacks where we can re-enter positions.
Do not let FOMO take over your emotions
The FOMO (Fear Of Missing Out) is probably one of your biggest enemies during a bull run. Basically, the FOMO makes you panic just thinking that the price of an asset will increase dramatically and you are not buying, which will make you miss a tour that you don’t even know will exist. Thus inexperienced traders will enter a very high price level and are easy prey for liquidations, as a bull-run does not mean that the price will have no pullbacks nor will it look for previous support levels before taking a good leap to the upside.
Without a doubt, traders must overcome the FOMO and keep a cold mind when it comes to placing orders during bull-runs, in order to choose the exact entry points according to the next market movements. Otherwise, we will be another victim of the liquidations when trading bull markets.
