the four mistakes I have made in every bull market since 2017
Three crypto bull markets later, the mistakes have not changed shape. Only the size of the loss did. The same four, every time, in the same order.
I have traded four crypto bull markets. 2017, 2021, the brief 2024, and whatever cycle is starting now. The mistakes do not change. Only the size of the loss does.
The first time you make these, you think they are personal failures. By the third time you realise they are structural — the same four cognitive defaults firing in the same order, against the same incentive shape, every cycle. You can read about them in 1923 (Reminiscences of a Stock Operator), in 1949 (The Intelligent Investor), or in any honest trader’s journal from any bull market in any asset class.
Here they are. Same order, every time.
1. selling too early on the way up
You buy BTC at $8,000 in 2017. It hits $14,000. You sell half. Locking in some profit, you call it. The other half hits $20,000. You sell the rest. The post-tax return is 145%. You feel smart.
Six weeks later BTC is at $19,500 and you cannot get back in. The thing you bought at $8,000 you are unwilling to buy at $19,000. The asset has not changed. Your relationship to the price has changed.
The mistake is not “selling too early.” Selling is fine. The mistake is selling without a plan for re-entry at higher prices. You sold because the gain felt like enough. You did not pre-commit to what would make you a buyer again. So when the next leg came, your only framework for action was the old anchor, and the old anchor said the price was too high.
Anchoring to your cost basis is the structural defect here. The fix is to set a re-entry rule before you sell. “I will sell half at +75% gain, but I will buy back at any breakout above the previous sell price.” Most traders cannot bring themselves to do this because the rule requires admitting the future price will be higher than today.
2. buying back at higher prices
The second mistake is the back-half of the first. You sold at $20,000. You are watching from the sidelines as BTC consolidates around $19,000 and then breaks higher. At $24,000 you buy back. At $30,000 you add. At $40,000 you go all-in.
The price you paid in this re-entry is sometimes 5x your average original cost basis. The percentage return on the new capital is much worse than the percentage return on the original. You also tend to size the re-entry larger than the original — because you are catching up — which means the next correction punishes you more on the new capital than it would have on the original.
The mistake is sizing the re-entry relative to your conviction, not relative to your risk. Conviction is highest at the top, because the price action confirms it. Risk is also highest at the top, for the same reason. The trader who buys back biggest at the top is the trader who loses biggest in the correction.
The fix is to size the re-entry the same as the original allocation, or smaller. Never larger. The price moved against your initial sell; conviction does not justify increasing the bet.
3. holding too long on the way down
The peak goes in. The correction starts. The first 15% drop you discount as normal volatility. The 30% drop you discount as a buying opportunity. The 50% drop you discount as “I have been through this before, it always comes back.”
It does come back. Eventually. Sometimes after 24 months at much lower prices. The trader who holds through the whole drawdown — the I have diamond hands trader — sometimes survives and sometimes does not. The ones who do not are the ones who used leverage, or who needed the capital for living expenses, or who had a relationship that ended in the meantime because of the stress.
The mistake is not “holding through a drawdown.” Long-term holders do this and it works. The mistake is holding through a drawdown without a plan for capital preservation. You did not set a maximum drawdown threshold. You did not pre-commit to selling some at -40%. You did not have a rule for what would change your mind.
Pre-commitment is the answer. “If BTC drops 50% from peak, I sell 25% of the position, regardless of how I feel about the long-term thesis.” That rule does two things: it preserves capital for the next cycle, and it removes the requirement to make a decision under stress.
4. going to cash too late on the way down
The fourth mistake is the first mistake replayed at the bottom. You finally accept the bear. You sell everything at -75% from the top. Six weeks later the price is up 40% from where you sold. You did not buy back. By the time you do, the recovery is half done.
This is the symmetric error of selling too early on the way up. The same anchoring, the same lack of a re-entry rule, the same emotional override. The difference is that the loss compounds across both mistakes. The trader who sold too early at the top and bought back too late at the bottom paid two emotional taxes against the same trade.
The fix is the same as for mistake 1: a re-entry rule decided before the exit. “I will exit if BTC closes below 150-day MA for 30 days. I will re-enter if it closes above 150-day MA for 30 days.” Pick any rule, but pick it before the exit, not after.
the shape
All four mistakes have the same shape. The pre-committed plan is overridden by emotion at the moment of action. The emotion is different each time — greed at the top, fear at the bottom, FOMO at the breakout, denial at the drawdown. The structure is identical.
The fix is not “more discipline.” Discipline is a finite resource that depletes under stress. The fix is pre-commitment — decisions made when the market is calm that bind your behaviour when the market is not.
Every bull market I have traded, I have improved on one of these and made the others worse. I have never run a cycle without committing all four. The goal is not to eliminate them. The goal is to make their cost smaller each cycle.
If you are about to trade your first bull market, expect to make all four. Read this then. Read it again twelve months later when you are sure none of them apply to you. The third reading is the one that helps.