Let’s say your $100 trade hits your long-term profit target of 400%, but you still think the price might climb even higher. That lingering feeling—wanting to catch more gains is called FOMO (Fear of Missing Out).
To avoid the double-edged regret of either losing profits or missing further gains, here’s a simple strategy to hedge against both scenarios.
Step 1: Secure Your Profits
Take out $300 from your profits, leaving you with $100 in play. Here's how to manage the rest:
Place $60 in spot trading.
Use the remaining $40 for a short position in a futures contract, but with a low-risk 1x leverage (stick to 1x for safety).
By hedging the market this way, you’re protected whether the price continues to pump or drops sharply.
If the price pumps further:
Your futures trade may get liquidated, but you'll still have $120 (as your spot trade doubles).
If the price drops by half:
You’ll have $30 left in spot (60/2) and $80 from your short position (40 x 2), totaling $110.
The Key? Let the market do its thing. When the inevitable panic sell hits, you’ll be ready with gains in hand to capitalize on others’ fear.
This way, you can avoid the FOMO trap while ensuring you’re well-prepared for whatever the market throws your way!
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