Get off the mountain!
When you've got a 2 o’clock turnaround time, you don’t stay longer!
Not following your rules can have grave consequences; sometimes it can even cost you your life.
Are you following your rules? Are you taking some profits? You know, I can’t think of any kind of trading or investing that doesn’t have some sort of built in rules that demand some kind of profit taking after significant run-ups.
We have seen a 4x in STEEM in a little over a month, and a better than 15x in BTS!
One way to “keep things in balance” is by “scaling out” a portion of your total position. Scaling in and scaling out are very effective ways to average buys and sells. When selling, you chose a basic target area where you would be comfortable taking something off the table. Maybe it’d take a new all time high for you to get interested, maybe it’d take a 10x, but whatever you decide, you then follow the plan and start selling in small increments at regular price intervals until you've sold what you have decided to sell.
So let’s say that you’re a long term holder, and that after taking your position to 100% at recent lows, you're now thinking you want to hedge a little bit against the possibility of a market wide correction sooner rather than later, and you decide to reduce your total exposure to STEEM by 25% once it gets above new recovery highs. One simple strategy is to sell 5% at each of the Fibonacci targets shown on the chart below.
If you get all those trades off, great, and if not, no big deal, you’d take what you can get, gladly hang on to the rest, and you’d also have some dry powder to buy back more STEEM on a correction. And a big smile on your face as well. 🙂
What about the other 75% of your position? If you’re a STEEM super bull like me, you might do the same at new all time highs when we get a 10x, or wait for a 20x, which, by the way is where I’d start getting interested in selling again; although it will probably take a 50x off of lows before I sell again, IF we were to see that before we see a correction.
That’s talking about STEEM of course - something we’re all super bulls on and none of us would mind being bagholders with.
What about something you’re not as sure about? Something you’ve got huge profits in but you’re still not 100% sold on?
Are you following your rules?
Or are you risking staying too late and getting trapped on the mountain with a storm coming in?
Disclaimer: This is not investment or trading advice – it is simply a discussion of one basic profit taking strategy using STEEM as an illustrative example.
The old saying....
Bulls make money, bears make money, hogs get slaughtered....
Dont be a hog.
There are two approaches:
The first is to do what you suggest which is very smart and worthy for all to consider.
The other is to look at this very long term with the understanding that 10 years from now, blockchain technology will be huge and things will be much higher than today. That said, there will be ups and downs...especially in crypto which is extremely volatile. It is possible to see a 70% pullback in a short period of time....can you handle that?
If not, then an alternative might be in order.
Especially with my BTS, I take that and put it in a drawer and I'll check back in a few years. I'm monitoring what is going on but up or down on a regular basis does not matter to me. It is 2020...2021...2022 that I am looking at.
My personal choice is to scale out of some of the tokens that I think are going to have a tough time continuing a high multiple run. I already took some BTC and ETH off the table and rolled them into both of our top choices, BTS and STEEM. I have a point in mind for BTC and LTC where I will remove a bit more.
No doubt about it. The time frame being looked at changes everything. And time frame is often dictated by mastery and time available. The better you are at something, the more likely you'll do it more often, provided you have time available for it. Everyone must seek their own individual balance. I don't have the expertise to day trade, nor the time. On the other hand, intermediate term swing trading is something I'm fairly successful with and it can be done with the limited time I have for it. That having been said, I'm still a 75% long term player, so I naturally lean towards your thesis, but I have that 25% trader inside of me. I think I can parlay that 25% into even more STEEM and BTS over the years than just holding. My split is similar to what @steembusiness mentioned in the comments of my Buy Low, Sell High post. In taking that one step further, I'm actually looking forward to providing liquidity on BitShares in both those markets: inventory that's been sold is to be bought back. Liquidity is much needed over there and people who provide it should find it rewarding. The only difference between me and an MM for all intents and purposes is my short to intermediate term time frame instead of a full-time job and an intra-day time frame. Nevertheless, that's still only with 25% (or so) of my portfolio while the other 75% is buy and hold just like you.
BTW, from a short term standpoint, right now just might be a good time to be careful with selling too much BTS. Did you see this? https://steemit.com/bitshares/@stan/aussie-summer-arrives-breaking-bitshares-news I smell something big.
Excellent @cryptographic.
I am glad you are fairly adept and had success at some swing trading. You are correct, you will be enriched by doing it. Personally, I havent had the success you had so I just stay away.
As for BTS, thanks for the 411 but not a single token will be sold by me....I agree there is a lot big going on with it along with STEEM. @stan mentioned that there were going to be some announcements in the first quarter....he knows something.....there are some big players who are probably looking at the BTS blockchain.
I will read the articles you linked...I hadnt see them.
By the way, the AriseBank deal was welcomed news.
Just read the article...makes me wish I had 18 months following @stan (only been here 4).
If this wasnt Christmas weekend with family obligations I would spend all weekend reading all his posts so I could find out what he is talking about lol.
@cryptographic,
Or are you risking staying too late and getting trapped on the mountain with a storm coming in?
It happens to me not once, it happens few times. One of the biggest problem of mine is I don't get an idea about when to sell! I hodl some coins and loss huge as you said they were at the peak! So, what today you shared is pretty awesome strategy!
Friend, I personally don't know you! But I could sense a great trader, analyzer, crypto genius and best financial adviser though you! Coz every article of yours learnt me how to survive in this high fluctuation market place! You are truly amazing friend! Thank you very much for sharing this article with us!
Cheers~
You're not alone. It's human nature, and a challenge we all must face. I'm extremely happy to hear that my little tidbits of knowledge are helping you to learn, but there's really nothing all that great about it, and certainly no genius involved - I'm just sharing what someone else shared with me before. What goes around, comes around, and it's important to give back what you've received. Over the years I've had many fine teachers and I only aspire to be a little like them. Great to know that you're profiting from my posts, and thanks for your participation, comments and insights as well!
@cryptographic,
For me you are genius! I could learn a lot from you! Now i am managing a crypto profile with lots of diversification! Without you, how could I learn those things and this new strategy also great! How many times I had to suffer just after sell all coins and it finds a new peak! So, basically this is great! Thank you for sharing your knowledge with us, with your guidelines and tips, I already made 200% ROI in last 2 weeks of time :D
Cheers~
Hello @cryptographic,
One simple strategy is to sell 5% at each of the Fibonacci targetsBuy in dip, hold it & sell it in the rally. So far that's what I learn. Today you gives me a nice tip. Fibonacci targets, looks a best module to make huge profit by holding and selling them at right time. Extraordinary good post & very useful technique for all crypto holders. Thank you.
~@mywhale
You find some neat tips about using similar Fib measurements on the buy side that I wrote about just 3 months ago starting here: https://steemit.com/trading/@cryptographic/btc-fib-retracements-and-more As I tried to outline there, they're a very helpful TA tool. If you want to see how things turned out, I'll leave it to you to look at the follow-ups. 😎
@cryptographic - Sir this is a valuable article for me... I see lots of my country people now trying to buy BitCoins & other Alt coins... But Sir most of them are trying to buy them at the peak... It can be grow more, but to me it's a risk... The forgot the basic rules of trading Sir... If they follow your articles atleast they understand what mistakes they made... Sir I have no good knowledge about Fab chart... But Sir, today I understood it's a useful strategy to all of us... Keep this work up Sir... You are guiding us to be future millionaires or billionaires club Sir...
Wish you a Merry X'mas Sir...
+W+ [UpVoted & ReSteemed]
You make sure to keep telling them than only DUMB bulls buy the highs!
Merry Christmas to you too.
@cryptographic this is an extremley great post and could not have been made in a better time. What you have said about the bull run of bts and steem, this has happened to many other cryptos, and your explanation to follow some rules is a great strategical way of thinking, first of all to take some profits, and second, to be prepared for a downward, and buy in cheaper prices.
This one is very related to your previous post of https://steemit.com/investing/@cryptographic/buy-low-sell-high were you speak more focused on portfolio rebalancing.
We need to makle priorities and follow some rules, as you explain very clearly, so we are better prepared for downward situations. Afterall, selling after a high bull ran, or after a 10 or 20x , only takes us a small amount of the investments, and gives us a lot of leverage to bid for cheap prices.
Upvoted and resteemed!
Regards, @gold84
This seems like a good way to stay safe, but right now I feel really bad selling my hard earned Steem :)
That's okay. If you're not comfortable selling, then you're really bullish long term and adopting a strategy closer to that of @taskmaster4450, and, as I also mentioned, to 75% of my overall strategy too. We all have our own time limitations, risk tolerance levels, etc., and you're probably very correct in thinking that the risk of big upside surprises are much greater than those for downside surprises. And, unless you're really good at trading, you'll probably do much better long term just holding, even if you have to live though some serious drawdowns. Just be sure you never find yourself force liquidating at lows and always be sure you can cover up to a 100% loss - even in an unprecedented bull market!
Wow, you had such a nice prediction, if I would have sold yesterday and bought back today, I would have earned some good cryptos. Next time I'll know!
Another excellent article as always.. :)
Excellent analysis. Thank you for sharing your knowledge with us. I look forward to reading more of your work now that I’m following you.
Thanks and praise 🙏
Great to hear that and I'll do my best not to disappoint. 😌
I think cryptocurency is batter than bank
Yeah, it's not a bad idea at all!
cheers
@cryptographic. Thanks for good information sharing.