After years of experience in the crypto market, I've learned that many retail traders make the same mistakes: holding onto losing positions out of stubbornness while selling their winners too quickly as soon as they see some profit. They focus on the immediate balanceâwhether itâs green or redâinstead of keeping an eye on market trends or volume. The result? Losses accumulate, and even when profits come, theyâre too small to make a significant impact.
Change the Approach: Hold onto Profits, Cut the Losses
The right strategy is the reverse: let your winners run and cut your losses swiftly. Hereâs the stop-loss and take-profit method I use:
When profits reach 15%, set a 10% trailing stop. If the market pulls back and your gains drop to 10%, lock in your profit and cash out.
If the price continues to rise, stay inâthe longer it rises, the bigger your gains.
On the downside, if your losses reach 5%, sell immediatelyâno emotions, no hesitation.
Why This Works
If you regularly secure 10% profits and limit losses to 5%, you only need a 50% success rate to stay profitable. Even with just half of your trades winning out of 100, your overall profit could reach 300%.
The Biggest Challenge is Mindset, Not Method
While this strategy is simple, itâs difficult to follow. The real challenge is managing your emotionsâresisting the urge to hold onto losers and staying patient with winners. Mastering your mindset is the key to success in the crypto market.
