Buying the dip is EASY, but knowing the right moment to take your profits can be a tough decision.
The reason is because you and I know that there’s a possibility for the price to keep going up.
That’s a TRAP.
Because there are times when I held onto coins when I was supposed to sell it and when the market price of the asset dips again, it’s too late to sell the asset because it’s no longer profitable.
The idea of “taking profits” is the most important part of trading or investing in any asset.
These is because you can invest money (capital) into a coin at a lower price and after it has successfully risen up over time(profits), you are actually losing money every time you don’t sell your coins to lock in the profits for yourself.
So, the question is how can you know the right time to Take profits. Here are some tips.
1) Fiat Exchange: If an investor puts in $1000 into a coin and after a period of time, the investment is now $10,000, these means her portfolio went up 10x, that money is not hers yet because only the value of the asset increased.
The smart thing to do is Sell the coins that was equivalent to the initial investment (in this case it’s $1,000) and then also sell 60% of the portfolio into a stable coin (which will be $6,000) and then trade the money which is $7,000 into Fiat.
The investor can leave the $3,000 in the market in the case that the price of the asset keeps going up.
2) Set Limits: Sometimes taking profits can be stressful especially because the price of an asset fluctuates very fast.
By setting limit orders on your investments, it’s an automatic way for you to take profits.
Investors can use the limit order feature to specify the percentage number of an asset to sell and at what price.
These means that once the market price goes up and hits that position, the order will be triggered and the asset will be sold for you.
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