There are no uniform rules on how long to take profits in the market, but there are strategies that will help you find the perfect moment. For example, for long-term investments, hodling and DCA (Dollar Average Cost) are the best strategies. Choose strategies that fit your investment goals and don't let your emotions influence your judgment.
The cryptocurrency market is actively developing, and experienced traders must prepare a strategy and know a number of nuances to determine the best moment to buy or sell. In the article we will consider this topic in more detail where.
When to withdraw profits from cryptocurrency
For long-term investment, experts usually recommend the HODL strategy in combination with the DCA, since there is no single correct formula for determining the time in the market. If you want to sell cryptocurrency for profit, do your due diligence to assess the long-term value of a particular coin. Sometimes, especially if it's a coin that you believe in, it makes sense to consider rigging.
It is also recommended to focus on optimal profit. There is no need to reach the finish line every time in order to significantly increase your investment portfolio. Instead, you should withdraw part of the profit in the range of about 30%. Focusing on a smaller increase, rather than a 50% or 100% profit, ensures that you don't experience a 20-40% retracement which is entirely possible in a dynamic crypto market.
Another advantage of this disciplined approach is that profits can be accumulated by transferring them to other coins that are just starting to move. This will result in a large total return on the portfolio.
Finally, we recommend selling only when you have other investment opportunities that you have researched well and want to invest your money. There are two dangerous psychological states for investors (FOMO and Uncertainty, Doubt - FUD), and it is important not to fall prey to them.
How to maximize profit when withdrawing
Now we offer to consider four strategies that will help maximize profits, and withdraw them intelligently and reasonably.
sell small parts
To improve profits, sell 5-10% of the assets at once, depending on the size of holdings in a particular cryptocurrency. If an asset has gained more than 30% in price since you bought it, consider selling a small percentage each week.
Since the crypto market is volatile, it is recommended to place a sell order in parts, depending on the state of the market. You should not sell all assets at once (unless the coin reaches the target price, everything goes according to plan), as you may lose potential profits in the future. You can also save a portion of the assets in HODL.
Keep profit in stablecoins
If the cryptocurrency has reached your target price or if you don't know what to do after making a profit, consider holding funds in stablecoins. Thus, you can use it to generate passive income in liquidity protocols and other DeFi projects. In addition, you can continue to survive in the cryptocurrency market by distributing profits to stablecoins that are not affected by the ever-changing market situation.
Stablecoins also make it easier to buy other coins when fiat currencies are difficult to use.
Selling and then buying when pulling back
Also consider a proper trading strategy to maximize profits from a cryptocurrency with long-term value. For example, when a particular cryptocurrency is in an uptrend, consider selling some and using the profits to buy more when the price drops.
Entries and percentage of profits
You can also maximize profits by placing coins on Binance Earn or choosing other investment products on Binance.
In addition, there are many third-party DeFi protocols with the possibility of passive income, but they must be chosen carefully.
Profit from investing in new coins
Many experienced traders use the strategy of investing in new coins or ICOs (Initial Coin Offerings) to achieve a high reward ratio. Initially, the trader keeps most of the wallet in major currencies such as Bitcoin (BTC) or Ethereum (ETH). After making a profit from the initial investment in the main coins, they then use a part of it to buy innovative coins.
For example, a trader sells 1 BTC for 1.5 BTC (the equivalent in US dollars) and invests a small portion of his profits, such as 0.2 BTC, in a new currency or ICO that can provide a good return.
The strategy is good for those who want to build a portfolio of major coins, but want to invest a small share of it in innovative coins with great potential.
Buy Cryptocurrency on Binance
On Binance, you can buy cryptocurrency in three main ways with low fees:
Fund a fiat account and convert fiat currencies into digital assets, such as stablecoins. Replenishment is available in different ways, depending on the currency - electronic wallets, cards, bank transfers.
Purchase from a built-in peer-to-peer marketplace from other users.
Summing up all of the above, the main thing is to understand when to sell cryptocurrency for profit, so as not to miscalculate. However, the trading strategies and procedures presented are not a one-size-fits-all formula and you should do your own research before engaging in any activity in a volatile and speculative market.
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