The cryptocurrency market is highly volatile and prone to ups and downs. And this is the reason why many day traders formulate both buying and selling strategies in an effort to maximize their profit potential.
The following profit-taking strategies can help crypto traders not only overcome their emotions through proper planning but also gain the confidence they need to make money, regardless of market conditions. However, to attain success, it is important to keep in mind that every strategy is highly individualized, so it must be flexible and market-driven.
A loss can be led to impulse decisions that have nothing to do with your strategy. Despite feeling as if everything is going wrong, it is crucial to remain calm. As a beginner, it can be a bit overwhelming, which can make it very tempting to react. However, developing sound trading psychology contributes significantly to the decision-making process of any trader.
It is common for short-term traders seeking fast returns to have a higher risk tolerance than long-term traders. To succeed in this, you need to make use of technical analysis since it plays an important role in managing risk and choosing the best entry and exit strategy relevant to you. Having a set entry and exit strategy reduces the risk of making irrational decisions due to emotions and prevents second-guessing. It is, therefore, an important component of your trading plan.
Moreover, be prepared to sell on the way up and on the way down, and always remember the adage coined by Bernard Baruch, one of America’s wealthiest men for half a century: “I made my money selling too soon.” Yes, sometimes you should sell some assets rather than hold on to them when the market begins to decline.
The house money effect describes how traders will take on greater risk when reinvesting profit earned through trading than they would in savings or wages. It is common for people to separate trading income from other income, which can cause confusion in their mental accounting.
By taking your initial investment, you can save yourself the risk of over-risking. Once a trade reaches an initial price, traders should cash out half of its value. This helps to keep your greed under control, even after you take out an initial investment, you should set price targets to manage risk.
Price targets: Traders can sell a percentage when they double their initial investment, a second percentage when they triple, and so forth. It’s not necessary to set these objectives in stone, but rather to give or take a zone and then fulfil them. Also, each asset a trader invests in may have its own set of guidelines.
By incorporating technical analysis, many investors enhance their profit-taking strategies. Another useful tool is the Average True Range (ATR) indicator, which gauges the volatility of the instrument being traded.
While investing in crypto can be a volatile journey, by diversifying your portfolio, you can create an asset allocation plan that reflects your level of comfort with risk and the potential gains you expect. Cryptocurrency investors can also consider stable coins, such as Tether, which are pegged to a fiat currency like the dollar, so they don’t fluctuate as much as coins, altcoins, and tokens.
AximTrade gives you an edge with a wide array of 35+ cryptocurrencies to choose from, allowing you to diversify your portfolio. AximTrade allows crypto traders and advocates to deposit and withdraw using USDT(TRC20), USDT(ERC20), and BEP-20 from anywhere in the world in a matter of seconds. AximTrade takes 0% commissions for cryptocurrency withdrawals.
The spread and margin requirements for crypto trading with AximTrade are among the lowest comparing other trading platforms. Traders are also given access to a wide range of tools and trading instruments in order to execute their trades with an informed perspective. As a result, you will be able to generate impressive earnings and reduce the risks associated with the volatile nature of cryptocurrencies.
Original Article: Is This The Right Time For Crypto Trading | Crypto Crash
Disclaimer: This post is from Aximdaily and it is considered a marketing publication and does not constitute investment advice or research. Its content represents the general views of our editors and does not consider individual readers’ personal circumstances, investment experience, or current financial situation.
The following profit-taking strategies can help crypto traders not only overcome their emotions through proper planning but also gain the confidence they need to make money, regardless of market conditions. However, to attain success, it is important to keep in mind that every strategy is highly individualized, so it must be flexible and market-driven.
1. Do not engage in Emotional Trading.
Emotions are often the cause of many bad trades. Bitcoin is more attractive to traders if it is $65,000 in November 2021 than if it is $35,000 in January 2022. It is common for crypto traders to see red on their portfolios today, which makes them wonder if they can even recover their money. Hopefully, if they stick around for quite a while they can definitely recover the money they spent.A loss can be led to impulse decisions that have nothing to do with your strategy. Despite feeling as if everything is going wrong, it is crucial to remain calm. As a beginner, it can be a bit overwhelming, which can make it very tempting to react. However, developing sound trading psychology contributes significantly to the decision-making process of any trader.
It is common for short-term traders seeking fast returns to have a higher risk tolerance than long-term traders. To succeed in this, you need to make use of technical analysis since it plays an important role in managing risk and choosing the best entry and exit strategy relevant to you. Having a set entry and exit strategy reduces the risk of making irrational decisions due to emotions and prevents second-guessing. It is, therefore, an important component of your trading plan.
2. Bearish markets create the rich.
Take a look at today’s market from the perspective of the top investors. It will be a delight for him/her to see the crypto price decline. How does that work? It is because they are experienced in taking profits both up and down markets. Since most traders are unlikely to time the exact top or bottom, laddering in and out can help secure gains. Even if traders leave some money on the table, they won’t lose their capital since profits are taken.Moreover, be prepared to sell on the way up and on the way down, and always remember the adage coined by Bernard Baruch, one of America’s wealthiest men for half a century: “I made my money selling too soon.” Yes, sometimes you should sell some assets rather than hold on to them when the market begins to decline.
3. Take out the initial investment first.
Some crypto traders may make a good decision to withdraw their initial investment immediately after the value of the crypto asset skyrocket despite the cry of crypto investors to HODL. It’s generally a positive step, but be aware that it may unleash the “house money” effect.The house money effect describes how traders will take on greater risk when reinvesting profit earned through trading than they would in savings or wages. It is common for people to separate trading income from other income, which can cause confusion in their mental accounting.
By taking your initial investment, you can save yourself the risk of over-risking. Once a trade reaches an initial price, traders should cash out half of its value. This helps to keep your greed under control, even after you take out an initial investment, you should set price targets to manage risk.
4. Importance of Take-Profit Orders
The decision to take profits is ultimately a personal one based on a trader’s personal risk profile, strategy, and goals. Here are some examples:Price targets: Traders can sell a percentage when they double their initial investment, a second percentage when they triple, and so forth. It’s not necessary to set these objectives in stone, but rather to give or take a zone and then fulfil them. Also, each asset a trader invests in may have its own set of guidelines.
By incorporating technical analysis, many investors enhance their profit-taking strategies. Another useful tool is the Average True Range (ATR) indicator, which gauges the volatility of the instrument being traded.
5. Diversify your trading portfolio
Staying on the profitable side with cryptocurrency trading requires portfolio diversification. It is common for successful crypto traders to mix higher-risk cryptos with blue chips such as Ethereum, Bitcoin, and other altcoins such as Binance Coin, Ripple, Terra, and so on. When an asset starts to outperform, the investor rebalances by taking profits to avoid overexposure to riskier positions. Some may even retain a small amount of capital if the particular coin continues to rise.While investing in crypto can be a volatile journey, by diversifying your portfolio, you can create an asset allocation plan that reflects your level of comfort with risk and the potential gains you expect. Cryptocurrency investors can also consider stable coins, such as Tether, which are pegged to a fiat currency like the dollar, so they don’t fluctuate as much as coins, altcoins, and tokens.
Trade Crypto with A Trusted Platform
Trading Crypto is now easy when you choose AximTrade. Simply open trading account with AximTrade and take advantage of both the crypto and forex markets with the best trading conditions and lowest capital you can invest.AximTrade gives you an edge with a wide array of 35+ cryptocurrencies to choose from, allowing you to diversify your portfolio. AximTrade allows crypto traders and advocates to deposit and withdraw using USDT(TRC20), USDT(ERC20), and BEP-20 from anywhere in the world in a matter of seconds. AximTrade takes 0% commissions for cryptocurrency withdrawals.
The spread and margin requirements for crypto trading with AximTrade are among the lowest comparing other trading platforms. Traders are also given access to a wide range of tools and trading instruments in order to execute their trades with an informed perspective. As a result, you will be able to generate impressive earnings and reduce the risks associated with the volatile nature of cryptocurrencies.
Original Article: Is This The Right Time For Crypto Trading | Crypto Crash
Disclaimer: This post is from Aximdaily and it is considered a marketing publication and does not constitute investment advice or research. Its content represents the general views of our editors and does not consider individual readers’ personal circumstances, investment experience, or current financial situation.
