08-29-2021, 07:11 AM
Let's talk about Exit Strategies and Profit Taking!
<!-- SC_OFF --><div class="md"><h1>Introduction:</h1> <ul> <li>Having experienced how deceitful, insanely volatile and punishing a full blown crypto Bear market can be back in 2018, I'll be the first to tell you how vital a planned Exit strategy is in order to <strong>maximize profit and minimize losses</strong>. So let's dive in.</li> <li>Many, including myself, believe we follow the lengthening 4 year cycle with a current bull market, where we for example will see a 2nd top in late 2021, or most likely early-mid 2022 before a probably Bear market.</li> <li>A "Black swan event" beforehand, such as stock-market crash, increased interest rates or the dreaded Infrastructure bill smashing the stable coins can incite a sudden bear market.</li> <li>Not taking profits, trying to time the top (spoiler: you will not), being to greedy or too attached to your investment (echo chambers) are the most common, and yet severe mistake us rookies do.</li> <li>The charts will not go up in a straight line forever, and <strong>there will come a time somewhere in the future where we go downwards before going up again.</strong></li> <li>The goal should in most cases be to have a predetermined Step-by-Step Strategy, that you can live with yourself should it go further than you expected, crash more/before you expected.</li> <li>If you can <strong>sell high and buy in lowe</strong>r, you increase your position and gains. <strong>More Sats, baby!</strong></li> </ul> <h1>When you invest, you should already have decided what you want:</h1> <ol> <li>What is your realistic price target/expected top? Is it in % gain, or is it a $ or Sats your goal?</li> <li>How much gain will satisfy you? How much loss can you take before you close the position/admit your mistake?</li> <li>Which do you consider high or low risk?</li> <li>Which are your short term holds? Which are long term holds?</li> <li>Are you taking profits from Alts into BTC? Crypto into gold/metals, stocks or FIAT?</li> <li>How do you want your portfolio to look like once the bear market happens? 20% BTC, 10% ETH and rest FIAT? 50% gold and 50% stabile coins?</li> <li>When do you <strong>Enter again</strong> for the next cycle?</li> </ol> <h1>Thoughts on strategy:</h1> <ul> <li>Many start by taking out their initial investment as a start, but this typically leads to more riskier and often bad decisions with the rest of your crypto trying to time the top.</li> <li>Many investors will keep 5-10% of their holdings, just in case of a bigger up-cycle or because they firmly believe in the project.</li> <li>By DCA (dollar-cost averaging) OUT you will most likely "time" the top better than you ever would trying to find the peak</li> <li>Hence, most "expert" investors recommend the predetermined step-by-step plan, for when and how much profits you are going to take.</li> <li>This is typically done with limit/stop orders that is set beforehand, as the market progresses.</li> </ul> <h1>And make the "profit taking road" ready!</h1> <ol> <li>When the time comes, make sure to have your assets on the exchange or wallet needed to take profit. Have in mind many exchanges will "crash" when we get to the top!</li> <li>Do you have enough gas in your e.g. BTC, ETH or BNB etc. account to cover potential insane Tx/swap fees of the thousands or millions trying to use the network?</li> <li>Does your bank approve FIAT deposits from your exchange?</li> <li>Have you calculated the tax implications?</li> </ol> <h1>As an example, here is my current Exit Strategy for BTC (this is getting long, so simplified):</h1> <ul> <li>I believe might see a BTC peak $150 - 200k, then a drop potentially back to 60k.</li> <li>My upside trigger of limit orders will be when BTC is closing in on $90k.</li> </ul> <ol> <li>20% sell at 88 k</li> <li>20% at 98 k</li> <li>10% at 108 k</li> <li>10% at 118 k</li> <li>10% at 128 k</li> <li>10% at 138 k</li> <li>10% at 148 k</li> <li>10% to try to time the peak or HODL in cause of crazy upcycle (not decided).</li> </ol> <ul> <li>My downside of stop loss from a unexpected "early" peak/downtrend:</li> </ul> <ol> <li>If BTC - 25% from presumed peak, 35%</li> <li>If BTC - 50%, sell rest of assets but leaving 10% of BTC.</li> </ol> <ul> <li>I will buy/DCA on the way down again, hopefully increase my BTC position by >2 times.</li> </ul> <h1>Closing:</h1> <ul> <li>I'd love constructive feedback on my strategy, and by any means feel free to share your BTC or ALT-coin Exit Strategy! Hopefully we can inspire some of the new Redditors, and all learn something new.</li> </ul> <p><strong>EDIT 1:</strong></p> <ul> <li>I did not expect all these downvotes. I'd like to explain why "forever HODL" might not be the smartest thing. Back in 2018-2019 I had the same mentality as many of you "<strong>NEVER SELL, ILL HODL UNTIL I DONT HAVE TO SELL"</strong>... and sat and watched <strong>my portfolio decline with 90-95% of its peak value</strong>. I still have <strong>not forgiven myself</strong> (it's horrible) for not having an Exit Plan. I could have EASY 2-3 x my current positions and now gains! You want MORE crypto? This is the way.</li> </ul> <p><strong>Edit 2:</strong></p> <ul> <li>I'm still looking for inspiration to modify my strategy by going through the comments. No one have a profit taking strategy for BTC, ETH or Alts? Come on guys!</li> </ul> <p>​</p> <p>​</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Tiltnes"> /u/Tiltnes </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/pdgsn5/lets_talk_about_exit_strategies_and_profit_taking/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/pdgsn5/lets_talk_about_exit_strategies_and_profit_taking/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><h1>Introduction:</h1> <ul> <li>Having experienced how deceitful, insanely volatile and punishing a full blown crypto Bear market can be back in 2018, I'll be the first to tell you how vital a planned Exit strategy is in order to <strong>maximize profit and minimize losses</strong>. So let's dive in.</li> <li>Many, including myself, believe we follow the lengthening 4 year cycle with a current bull market, where we for example will see a 2nd top in late 2021, or most likely early-mid 2022 before a probably Bear market.</li> <li>A "Black swan event" beforehand, such as stock-market crash, increased interest rates or the dreaded Infrastructure bill smashing the stable coins can incite a sudden bear market.</li> <li>Not taking profits, trying to time the top (spoiler: you will not), being to greedy or too attached to your investment (echo chambers) are the most common, and yet severe mistake us rookies do.</li> <li>The charts will not go up in a straight line forever, and <strong>there will come a time somewhere in the future where we go downwards before going up again.</strong></li> <li>The goal should in most cases be to have a predetermined Step-by-Step Strategy, that you can live with yourself should it go further than you expected, crash more/before you expected.</li> <li>If you can <strong>sell high and buy in lowe</strong>r, you increase your position and gains. <strong>More Sats, baby!</strong></li> </ul> <h1>When you invest, you should already have decided what you want:</h1> <ol> <li>What is your realistic price target/expected top? Is it in % gain, or is it a $ or Sats your goal?</li> <li>How much gain will satisfy you? How much loss can you take before you close the position/admit your mistake?</li> <li>Which do you consider high or low risk?</li> <li>Which are your short term holds? Which are long term holds?</li> <li>Are you taking profits from Alts into BTC? Crypto into gold/metals, stocks or FIAT?</li> <li>How do you want your portfolio to look like once the bear market happens? 20% BTC, 10% ETH and rest FIAT? 50% gold and 50% stabile coins?</li> <li>When do you <strong>Enter again</strong> for the next cycle?</li> </ol> <h1>Thoughts on strategy:</h1> <ul> <li>Many start by taking out their initial investment as a start, but this typically leads to more riskier and often bad decisions with the rest of your crypto trying to time the top.</li> <li>Many investors will keep 5-10% of their holdings, just in case of a bigger up-cycle or because they firmly believe in the project.</li> <li>By DCA (dollar-cost averaging) OUT you will most likely "time" the top better than you ever would trying to find the peak</li> <li>Hence, most "expert" investors recommend the predetermined step-by-step plan, for when and how much profits you are going to take.</li> <li>This is typically done with limit/stop orders that is set beforehand, as the market progresses.</li> </ul> <h1>And make the "profit taking road" ready!</h1> <ol> <li>When the time comes, make sure to have your assets on the exchange or wallet needed to take profit. Have in mind many exchanges will "crash" when we get to the top!</li> <li>Do you have enough gas in your e.g. BTC, ETH or BNB etc. account to cover potential insane Tx/swap fees of the thousands or millions trying to use the network?</li> <li>Does your bank approve FIAT deposits from your exchange?</li> <li>Have you calculated the tax implications?</li> </ol> <h1>As an example, here is my current Exit Strategy for BTC (this is getting long, so simplified):</h1> <ul> <li>I believe might see a BTC peak $150 - 200k, then a drop potentially back to 60k.</li> <li>My upside trigger of limit orders will be when BTC is closing in on $90k.</li> </ul> <ol> <li>20% sell at 88 k</li> <li>20% at 98 k</li> <li>10% at 108 k</li> <li>10% at 118 k</li> <li>10% at 128 k</li> <li>10% at 138 k</li> <li>10% at 148 k</li> <li>10% to try to time the peak or HODL in cause of crazy upcycle (not decided).</li> </ol> <ul> <li>My downside of stop loss from a unexpected "early" peak/downtrend:</li> </ul> <ol> <li>If BTC - 25% from presumed peak, 35%</li> <li>If BTC - 50%, sell rest of assets but leaving 10% of BTC.</li> </ol> <ul> <li>I will buy/DCA on the way down again, hopefully increase my BTC position by >2 times.</li> </ul> <h1>Closing:</h1> <ul> <li>I'd love constructive feedback on my strategy, and by any means feel free to share your BTC or ALT-coin Exit Strategy! Hopefully we can inspire some of the new Redditors, and all learn something new.</li> </ul> <p><strong>EDIT 1:</strong></p> <ul> <li>I did not expect all these downvotes. I'd like to explain why "forever HODL" might not be the smartest thing. Back in 2018-2019 I had the same mentality as many of you "<strong>NEVER SELL, ILL HODL UNTIL I DONT HAVE TO SELL"</strong>... and sat and watched <strong>my portfolio decline with 90-95% of its peak value</strong>. I still have <strong>not forgiven myself</strong> (it's horrible) for not having an Exit Plan. I could have EASY 2-3 x my current positions and now gains! You want MORE crypto? This is the way.</li> </ul> <p><strong>Edit 2:</strong></p> <ul> <li>I'm still looking for inspiration to modify my strategy by going through the comments. No one have a profit taking strategy for BTC, ETH or Alts? Come on guys!</li> </ul> <p>​</p> <p>​</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Tiltnes"> /u/Tiltnes </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/pdgsn5/lets_talk_about_exit_strategies_and_profit_taking/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/pdgsn5/lets_talk_about_exit_strategies_and_profit_taking/">[comments]</a></span>Kind Regards R