My Profit Taking Strategy
There are many investment strategies out there but here is what I have been using to make sure I am not at a loss all the time while investing (especially in high-risk high-return investments). But before we start, this is not financial advice and just for educational purposes only. Take control of your own money and always do your research before investing!
Rule #1: reach breakeven first!
Always, always, always aim for breakeven first before considering another degen strategy. If you reach breakeven, all the leftover money is free money, and by all means, if the project you are investing in is falling you won’t lose money! So what I did first is aim for breakeven. You can do this in many ways which lead to another rule below.
Rule #2: buy low sell high
well duh! Everyone knows we have to buy low and sell high. But many times investors buy at the highest point before the chart falls. It happens because the market move so unpredictably. When the price rise especially when everybody is hyped with the project/investment, it is time to sell and make some profit! Not the other way around.
Rule #3: Always take profit, but not too much!
Sometimes we got so greedy and don’t sell our investment at a high price only because we think it will rise. But here is the thing, if there is a big rise, there will be a big down too. Why? because people taking a profit! So don’t hold your investment forever, take some profit and use some of the profit to buy back the dip.
Rule #4: No FOMO!
many people including me have experienced FOMO (fear of missing out). It is hard not to be lured by news of big opportunities. But remember most of the time that big news you heard is already too late. So when you heard some big news, remember to clarify and do some analysis and risk management first.
Rule #5: Don’t forget to invest in conservative assets
I know conservative assets can be boring because they don’t have as high a return as degen strategy. But if you have some portions of your investments portfolio in conservative assets, you will be able to sleep soundly at night especially when the market is unpredictable. So what I like to do is split the profit into 20–80. Where 20% goes to conservative assets and 80% will be used to reinvest in the other high-risk high-reward investment.
Conclusion
So this is just my strategy, not financial advice. Always do your research when investing. Maybe you have a better investment strategy you can share? Feel free to reach out!
