Top Trader Discusses Strategies for Profit Retention in Crypto Markets

According to BlockBeats, on December 18, top trader Eugene Ng Ah Sio shared insights on the challenges of retaining profits in the cryptocurrency market. He emphasized that while making money in the crypto market is one aspect, preserving those profits is another. Ng highlighted the importance of having a well-planned exit strategy to minimize losses when market cycles shift. He noted that those who claim to consistently profit in both bull and bear markets are exceptionally rare, suggesting that such traders belong to the top 0.01% globally. Ng provided a framework for evaluating investment performance based on the percentage of drawdown from the net asset value's peak. A drawdown of 0-20% indicates excellent defensive performance, though it might come at the cost of potential gains. A 20-30% drawdown suggests good management, with timely exits upon recognizing market shifts, resulting in minimal losses. A 30-50% drawdown is considered acceptable, implying that while not optimal, the investor likely secured reasonable profits. A 50-75% drawdown indicates holding positions for too long and failing to identify critical turning points at the end of a cycle. Finally, a drawdown exceeding 75% signals a significant error, necessitating a comprehensive evaluation of one's trading approach. Ng concluded by noting the inherent uncertainty in predicting the true extent of drawdowns before the start of the next cycle. Despite this uncertainty, he stressed the importance of having a plan in place to navigate market transitions effectively.