On April 22nd, the Bitcoin Cash (BCH) jumped by almost 20%, reaching $1400 level briefly. As the BCH price action chart shows, the BCH/USD pair had a meteoric rise from about $545 in early April to about $1400 by 4/22. And as the chart shows, it has a potential to rise up to $1800, until it hits a major resistance level.
Then the question is: Is this the right time to take 100% profit, or split the profit levels as the price continues to grow?
How and when to take profits from cryptos?
Just as in FX trading, one needs to be disciplined in Cryptocurrency trading also. For example, before taking any trading decisions one needs to be familiar with the general market trend of the subject pair, as well as recent peaks and valleys. In particular, cryptocurrencies are highly volatile, so a little understanding of some of the charting tools, such as, Fibonacci retracements would be helpful too!
Price action charts also help! However, one can use price action charts in order to devise a ‘Dollar Cost Averaging (DCA) Scheme,’ for buying and partial profit taking for selling. The DCA scheme is the time honoured mechanism by which seasoned traders accumulate coins, while taking partial profit as the price is increasing helps to systematically book profits.
Make Coin Volatility and Diversification Work for Profits.
There are probably more than three hundred coins, ICO offerings, Blockchain investments and cryptocurrency futures. Furthermore, all of these instruments are highly volatile and reach peaks and valleys in the price at different times. The price values of these coins are also extremely diverse. They range from a fraction of a dollar to several thousand dollars. With such diverse pool of investments to choose from, one can always book a profit in a highly appreciated currency and reinvest back in the currency that is undervalued.
However, this requires a disciplined approach to rotating currency investments, such that your portfolio is always on a positive trend.
Long term Crypto Investments.
Short term or long terms investments in the crypto space refer to different time scales compared to equity investments. A year is a very long term holing period in the crypto world. In that respect, holding the premiere five currencies for a long term appreciation is also a strong possibility. Recall that in 2017 – the price of Bitcoin had jumped from about $1000 in January 2017 to about $20,000 by December 2017.
Reach out to Advisors at Platinum Trading Institute:
The Platinum Trading Institute (PTI) advisors can also teach you on how to devise a prudent profit taking strategy.
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