it is about one that is started investing in cryptocurrency and sometime my portfolio goes high and sometimes comedown I do not know to take profit.
what is yours strategy for taking profit?
For each method I use, I go with the way that has shown me from backtesting and forward testing to be the least risky without giving away too much of the profit.
But it’s a terribly difficult question, in trading.
I don’t think there’s a single “right answer”.
People’s attitudes to it also vary a lot, according to their degrees of risk aversion. The “most profitable” is not always the “best”, according to that.
I think the single big mistake to avoid is trying to take your profit according to where your stop loss was, in a “fixed proportion” or “fixed R:R”. Many people go wrong by doing that.
Overall, it’s better to try to determine it from chart-based parameters like support and resistance, or even just “round numbers”. My opinion, anyway.
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Either be a trader or hodler not both. Build a trade system to make money from the volatility or invest for the long term. I recommend the long term because 90% of people do not make money trading.
Less than 0.1% of cryptos will survive over a 5 year period so you have to choose the top assets. If you dont know what that is then just buy Bitcoin each month like how you would buy the SP500. Treat it as a 5 year investment and set price targets for yourself to take profit along the way.
If you truly know what your buying then you will not sell. Just like the people who bought Amazon back in the early 2000,s. Thats how you make money.
Chart-based parameters aren’t necessarily a different category from fixed R proportions, though, for example if you trade from range bar charts. It can be a way of combining the two. Some people even construct their charts from range bars specifically to resolve this question by being able to use a fixed R without “going wrong” as you describe…
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It’s the most difficult question in trading. Using a fixed r:r or a trailing stop or percentage / pips gain per trade are ways of avoiding answering the question - which is not to say they are wrong, but they are not the best answers.
The best answers lie in price action, in the charts, and I’m thinking specifically of the ability to draw meaning from candlestick bodies, closes and wicks.
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