EFFECTIVE PROFIT-TAKING STRATEGIES

[TradeCoinD2]

I. PROFIT-TAKING TIPS FOR TRADING

Each trading tool has its own advantages and disadvantages, so it's essential to use multiple tools to increase accuracy (although using too many can be counterproductive). This article will focus on profit-taking strategies without delving into how to use these tools extensively, so it will not be too lengthy.

1. PROFIT-TAKING BASED ON SUPPORT AND EMA:

Profit-taking based on support involves identifying areas with strong candle wicks followed by a pullback and a bearish reversal (in the previous timeframe). You would place a sell order right at that support zone.

Profit-taking based on Exponential Moving Averages (EMAs) (using EMA34 and EMA89) is effective on daily (D) or 3-day (3D) charts and even more accurate on weekly (W) charts.

For example, let's look at the 3D chart of BTC. You can see that since February 28, 2022, BTC consistently faces resistance when touching EMA34 or EMA89 on the 3D timeframe, even without considering fundamental analysis or economic conditions. In this case, you would consider taking profits when the candle reaches EMA34 or EMA89.

2. PROFIT-TAKING BASED ON RSI:

Profit-taking based on the Relative Strength Index (RSI) involves selling when the RSI enters the overbought region, typically above 70.
When using RSI for profit-taking, it's crucial to consider other resistance factors. Not every cryptocurrency reverses its trend just because the RSI enters the overbought zone.
Combining RSI with candlestick patterns and RSI patterns (such as bullish or bearish divergences) can result in a higher win rate.
For more detailed information on trading tools, you can refer to Aden Nguyen's cryptocurrency trading channel on YouTube.

3. PROFIT-TAKING BASED ON BOLLINGER BANDS:

The larger the timeframe (3D, W), the more accurate profit-taking using Bollinger Bands becomes.
Bollinger Bands consist of three lines: the Upper Band (UP), Middle Band (MB), and Lower Band (DN).
When the candle is in the upper half of the bands and rises, touching the UP line the uppermost line, it to revert towards the middle band (). In this case, you would consider taking profits when the candle reaches the UP line.
When the candle is in the lower half of the bands and rises, touching the MB line (the middle line), it relative to test it again. If the candle doesn't close above the MB line, it may revert to the lower part of the Bollinger Band, and you could consider taking profits at or near the MB line.

II. PROFIT-TAKING STRATEGIES FOR PRICE RECOVERIES (REBOUND):

1. PROFIT-TAKING USING FIBONACCI RETRACEMENT:

When a cryptocurrency experiences a strong price increase (e.g., x2, x3, x10) and shows signs of a potential reversal, you can use Fibonacci retracement levels (e.g., 0.236) to identify entry points for profit-taking (e.g., 10%, 20%, 30%...).
For example, if the chart shows that the price retraced to the 0.236 Fibonacci level after a significant pump, you may consider taking profits at the next Fibonacci level, such as 0.382 or 0.5.

III. TIPS FOR OPTIMIZING PROFIT-TAKING ORDERS AND EXECUTION:

To ensure that you don't miss out on profit-taking opportunities and to set orders effectively:

1. EASY-TO-EXECUTE ORDER PLACEMENT:

Identify your profit-taking zones from the tools mentioned earlier.
Analyze the order book (buy/sell orders) for the cryptocurrency pair you are trading. Look for where the highest selling volume is located and avoid setting your sell orders exactly at those levels. Set them slightly below or above those levels.
Use odd numbers (e.g., 0.1489 or 0.1449) instead of even numbers when setting profit-taking orders. For example, if your profit-taking zone is between 0.15 and 0.2, consider setting your sell order at 0.1489 or 0.1449.

2. OPTIMIZING PROFIT-TAKING FOR MAXIMUM PROFITS AND STABILITY:

To lock in profits, it's effectively to take profits at multiple levels and avoid the "buy low, sell high" myth, which is often more theoretical than practical
For instance, if you determine your profit-taking zone is between 0.15 and 0.25:
TP1: Take profit at 0.149
TP2: Take profit at 0.194
TP3: Take the rest at 0.249
By using these strategies, you can better manage your trades and increase your chances of maximizing profits while minimizing losses. Remember that trading involves risk, and it's important to continuously adapt your strategies to market conditions.

[surendertakyaan70]

To gain profit, we should set clear goals to take advantage of market fluctuations by making our own strategy. So that we can get profit from our fixed price in the market because the strategies allow us to increase profits while selling which helps in risk management by spreading our investment capital. And all market conditions are reevaluated. And our technical exit points are identified which is very important for us. It helps in taking emotional decisions in our prescribed plan.

[jeraldskie11]

In my opinion, using indicators for taking profits is not effective. Indicators really works but it's a little bit laggy where if you use in a trade solely you're likely to miss the 10% up of the profit if compared to pure price action confirmations, which is also true in taking profits. The possible area the price would rebalance is the nearest order block or fair value gap. Most importantly is to exit immediately in the market if you already profited so that it will not get back to the market especially if you are with volatile coins which is can be easily manipulated.