Trading in cryptocurrencies is still relatively new territory but, to be honest, it isn’t very much different from trading on the stock markets. For most people, it is just about getting over the initial fear of investing in a currency that you can’t really see or touch, and with no regulatory body around to ensure that you don’t go completely bankrupt.
Likely, once you actually get into the game and get a feel of how it works, you will see that you can actually gain liquid assets from your crypto. Here we discuss one way of earning on your crypto investments, which is called Taking Profits.
What is Taking Profits?
The term taking profits is used in the crypto market exactly like it is used in the stock market. It means that you sell a portion of your investment while it is showing an upward trend.
How do I make sure that I don’t lose money while taking profits?
Well, here’s the good news, you will never lose money when taking profits. For example, if you bought a coin for $10 and sold it for $15, you made a profit of $5. Granted the coin might go up to $20 or even $30 and $40, and you could have earned more if you waited a day or two, but you never actually lost money. (This is why following a plan like the ones CryptoStops offers help to maximize profits).
By following these simple steps, you can actually maximize your profit taking on the coins that you have invested in:
Understand your coin: As with any investment, you need to know what you are putting your money into. Yes, Bitcoin (or even part of a Bitcoin) is always a good idea, but there are numerous other cryptocurrencies on the market that are performing well. Shop around look what has been doing well consistently, and then make a wise investment.
Set a profit point: Once you have understood the general trend of the coin you have, you can decide when you think it will be a good idea to sell it. Now, remember, taking profits is not waiting to sell when the coin reaches its upper limit. There is no way of knowing what the upper limit is. You need to decide at what value during the upward trend you will be willing to sell your cryptos. For example, if you buy a coin for $50, you could decide to sell as soon as it hits the $100 mark. And because you have been studying the coin, you should be able to predict with some certainty that the value will double in about a month or so.
Decide on what percentage you will sell: When taking profits, you never cash in the full amount but just a percentage of what you own. You can set the percentage depending on what you feel comfortable with. For example, you might decide to sell 10% if the coin appreciates by $20, or 25% if the coin doubles in value.
Regardless of how much you do earn, you taking profits is all about gains. Once you have made a profit you get to decide what you do with the extra cash. So, remember, don’t hold all your cryptocurrencies.
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