One of the greatest indicators for success and longevity in crypto is the ability to take profits. The question I hear most often from newer people entering the space is “when should I sell?” . Well I am going to provide to you a basic strategy to take profits on various positions, remember in the end it is up to you to decide and once you make the choice you must be able to live with it.
All this strategy requires is charting tool such as tradingview.com, dextools.io or dexscreener.com just as long as you are able to chart the token and record your entry you are able to implement this strategy. Although I do want to preface by saying that the longer the coin or token you are trading has been trading for the better because it gives clearer price indicators.
I will give A very simple example and explain the steps
I buy $1,000 worth of bitcoin at $40,000.
Now that I have my selected token I will use trading view tools on the left hand side of the screen third one from the top and click on the Gann and Fibonacci tools and then scroll to the second option called Trend-Based Fib Extension.
Once you have chose this tool you will have to choose three parameters but really only two are important. Once having chosen the Trend-Based Fib Extension the first parameter is where your entry is placed the second parameter will be set at the next swing high and the third needs to be further along the X- axis but matching your entry along the Y-axis to help you visualize the target price points
The extension will help people who lack the experience or conviction to better see price points at which to take profits general rule of thumb is
“when an investment doubles, I most often withdraw 30% (60% of initial).”
It may take several years to build a $1M net worth.
But it only requires one bad decision to lose it all.
Just a reminder that you should take some profits from time to time.
My profit-taking rule: when an investment doubles, I most often withdraw 30% (60% of initial).
— Route 2 FI (@Route2FI) January 14, 2022
Profit taking is one of the areas in crypto that is not emphasized enough this will determine your success and longevity on the space. This strategy is a very simple and basic strategy recommended to all people getting started and the Fibonacci sequence is recognized by many traders for setting trading levels.
