How to Take Profits on Crypto Gains (foolproof method)
Tolerance and someone with money to lose dont we all wish we had money to lose. Then we have a short term trader with a high risk, tolerance who doesnt have money to lose and then on the other side of the spectrum, we have long term traders. So this is a long term holder who would like to profit off of price swings if at all possible, and then we have a long term holder with a high conviction in crypto. Just the technology of crypto no plans to sell – or this could be a long term trader – who is investing a relatively small amount into cryptocurrencies at least relative to either their net worth or their investment portfolios. Also a note about the patreon. We are now completely sold out if youd like to get a spot in the future when we open back up to be a part of my buy alerts and my private community that have put me up more than 100 in under six months on my crypto positions, You can join my free discord that is linked in description, and i will send a notification out there once there is more availability, so were going to start here with the short term side and then were going to work our way to the long term side and Youll find that there are strategies for each and every situation here so starting on the short term side. This is the short term trader, looking for the fastest return possible, a high risk tolerance and they have money to lose.
This would be someone who has maybe a stable set of investments, and then this would be the the money that they play with on the side. So this is someone betting on price wings, not the long term success of a project you care more. Whether a crypto goes up 10 than what it does five years from now. First, you need to determine the gain that youre looking for and ive said this a million times ill say it again. You always need a plan when you buy something you need to set a plan as to what youd be satisfied with. Are you looking for a five percent gain? Are you looking for a 15 percent gain? Are you trying to do a moon shot and get 100 percent setting this up ahead of time will make decisions much easier later on when those profits are actually there when youre theyre in your portfolio, and you have the ability to sell and capture some of those Profits, so here are your options. First off is a limit order. I like this one because it takes out some of the psychology, so what you can do with a limit order is place, an order ahead of time to sell your asset at a predetermined price. So if you said i want to sell this asset, when i make 15 percent, you could set a limit order at 15 percent up when it hits that price it automatically sells. You dont even have to think about it.
Its great you dont have to have any psychology here so heres an example. You buy apecoin at five dollars, youre shooting for a 20 return. So you set a sell limit order at six dollars once it hits six dollars it sells. You make that 20 easy enough. The downside is that your order is not guaranteed to be filled just the nature of limit orders, depending on where the price sits at and where it stays at. Not all limit orders are always completely fulfilled, so thats, just one thing to keep an eye out for another option. Here is something that i just personally call chunks, mostly because i just like the word chunks and youll, see youll see why its fitting. So this is where you sell a percentage of your holding at predetermined tiers of price increases. Of course, this takes a little bit more work. You might need to bust out a spreadsheet or two and do a little bit of calculations, but its a solid strategy. So heres an example: you invested one thousand dollars into booty coin, ten dollars per coin, but you want to avoid your inner greed, so you set up this schedule ahead of time and you tell yourself im going to stick with this schedule, no matter what my greed Tells me in the future so heres an example you bought at 10. You could say: im gon na sell fifteen percent at eleven dollars – fifteen percent at twelve dollars – thirty percent at thirteen dollars – fifteen percent at fourteen dollars – fifteen percent at fifteen dollars – and if it goes up more than that, youll just keep ten percent and ride it out.
For the foreseeable future, that way, you know your gains are captured. I dont know how many people have told me, oh, if only i i sold on this peak and made a little bit money thats how you capture those gains. Now, if you are long term on a position, if you believe something is going to ultimately be much higher five 10 years from now im of the belief that its better just to sit long term and be patient, but that isnt the case for everyone. So theres an option for you now lets move on to the next option. This is a short term trader with a high risk tolerance, but they dont have money to lose. As i have written here. This is not ideal. This is the highest risk. This is the yolo folk. These are the people who are betting, their whole paycheck or their whole retirement on some moonshot. This is not smart, but i know some people do this. This craziness. I would never recommend anyone does this, but here is a strategy to help combat this. Of course, none of this is financial advice. With this, you want to determine the gain and the loss that you can accept, given that theres no new information, meaning knowing everything you know now about your investment, what loss can you accept? What gain can you accept is that 10 is that 20? Is that 50 decide that right now always have a plan? Now here are your options, so we have the existing strategies that weve already talked about.
You could have that limit order. You could set a sell limit order at a specific price or you go with the chunks method. Now here are some new strategies, a trailing stop loss. This one is really interesting and can be really helpful. This is setting a sell order at a percentage below the prevailing rate. Now, here is an example: you buy bitcoin at one dollar and you set a 10 percent, trailing stop loss. What this means is, if the price hits 90 cents, it will automatically sell your position, meaning your losses are capped at ten percent. If bitcoin goes up to two dollars, then your trailing stop loss if its still set at ten percent would then sell your position if it goes down to a dollar eighty, so, no matter what the price goes up to. If it drops down ten percent, it will sell that position now. There is a downside here, because most exchanges do not have this feature, in fact, theres no big, crypto exchanges that have this feature just yet and of course you have to pay taxes on all your gains, as you would with any of these strategies. Now the next option is playing with house money. Youre, probably familiar with this strategy, so well make this one quick after making a profit, this is simply pulling out your initial investment in just letting the profits ride. That, of course, is a great strategy to feel like youre losing nothing.
But, of course, if your profits are there, you are still losing money. Just doesnt. You dont quite have the emotional attachment to that money when its only gains that youre losing now lets go to the long term strategies here. The first one is a long term holder that would like to profit off of the swings and volatility if possible. As i have written here, this is basically everyones goal, but it is far easier said than done far easier. Its very hard to time the market, especially when youre emotionally attached to an investment like a long term holder typically, is if youre a long term. Holder is generally because you feel like its going to do very, very well in the long term, so youre very attached to buying and selling. But in order to do this, you want to keep an eye on volatility, support and resistance levels, meaning understand the charts and where prices tend to trend and decide how much of your position youre long on and how much youre trading with now. One thing that ive found is a good strategy here is to have two separate accounts. One account with your long term position that youre just never going to touch and then maybe another account that has your tradable position and your tradable position is usually going to be a smaller position. But then that way, youre never touching the long term, youre not going to dip into that, and you can kind of have some fun trades on the side.
Thats. One way that you can do this so here are your options, so we first have our existing strategies that can still work the limit order, the chunks just smaller chunks. In this instance you know – maybe youre not going to sell off 15 to 30. Maybe you sell off five percent or three percent if there is a sharp increase in price, that can be a pretty good strategy, especially with how volatile cryptos can be, and then, of course, playing with house money except you can just take out a smaller amount again. Now for new options we could have dollar cost average out. A lot of people will talk about dollar cost averaging into a position which is basically just making set purchases over a period of time. So, for example, instead of buying a thousand dollars of bitcoin today, you could buy a hundred dollars every week for 10 weeks and that flattens out the volatility. Now you can do the opposite of that in order to take profits and flatten out that same volatility. Instead of selling a thousand dollars today, you could sell 100 every week for 10 weeks, as i have written here, sell x dollars on regular intervals. This will hedge against volatility, and then we have the last type of trader. This is a long term holder of crypto or its someone who is investing a relatively small amount of their net worth or their investment portfolio into crypto. This is the easiest mentally.
Basically, you do the work ahead of time. You do all of your due diligence. You check and double check, and you tell yourself hey. I want to hold this for five or ten years and then you really dont have to think a whole lot about it if you dont want to after that point, but you do have options so, with our existing strategies, we have dollar cost average out so lets Say you love the position that youre in youre up 200 percent on some long term position but youre like hey. I want to slowly pull out 50 a month. You could dollar cost average out in that position. That doesnt mean that you hate that position. Another option would be selling a portion if you need to buy something so youve been holding something for 10 years. You want to go buy. I dont know a four wheeler, a jet ski something like that. You could just simply sell a portion of that. Just make sure that you account for your taxes on this, then of course total just holding as long as you feel you need to hold for this tech. The thing about crypto is, we really dont know where this is going to be in 10 years from now, and we dont know whos going to be the top dog, but all i can tell you is itll be extremely exciting. I hope that this video helps you capture some juicy profits.