How to get a good exit after making profits!!
Did you just follow my $SOL short entry at $145 and now is sitting on unrealized profit? Have no idea when to close postion, what to do? Well then here is the guide on the art of taking profit.
First, I am assuming your entry price is moderately far from the current price. long/short/spot doesn't matter, and you are in profit.
In this case, there are a few things you can do to achieve the same goal: Secure profit, obviously don't let the unrealized PNL slip away, but at the same time try not to miss any potential profits.
Usually this type of approach is "greedy" and does not work well (Maximizing profits), but in this context since you are already guaranteed to win it is possible.
So the steps you have to take?
1. Set an SL above the mark price but below your entry. This SL would be a stop loss but will still be a profit. Keep pushing SL lower as market dumps if you are short to secure profits. and vice versa for longs. Works even better if you know how to set a grid SL. Use scaled order or just use the "Split SL" mode. Very easy.
2. Use trailing stop. Dont know what this is? Click on it and go to the help page provided by Binance. I am not explaining this to you. The info is already provided.
3. Turn on cross/hedge mode. add all of your unrealized PNL to the existing position, and adjust SL near your entry point, keep doing this. Note that this may significantly increase your profits but may also lose all of your profits. However it has no risk of loss. Best works when market is going completely one side to your favor.
Note that only No. 1 and No. 2 works for intermediate level traders. These 2 methods guarantee profit with no need for micro management. You can live life, all happy, and if SL hits then you still made $$..
But No. 3 is the "Dark Magic Scalping Method". DO NOT do this if you dont trade 24hours a day like me. Needs extensive knowledge and skills. Also a lot of time to just sit and watch the chart.