The BTCUSD longs were sold well before the $20,000 peak was hit last year on a trend line break. See here. However, there was a number of questions about BTCUSD. Some people have bought in at very low prices and are deep in profit. That sounds great, but strangely it can be quite stressful to know what to do with a trade deep in profit. Furthermore, when markets behave like BTCUSD you can see large profits evaporate nearly as quickly as they appear. So having a plan is important. This article will give you some ideas how to manage you profit.

Techniques for managing your profit

1. Trail your stop beneath the daily chart trend line

Take a look at the chart below. You will see the daily trend line.

BTCUSD

This is an obvious technical place to trail your stops.

Advantages: If the trend carries on you are in and stops can be trailed to reflect higher prices.
Disadvantages: The stop beneath the trend line is around $30,000 which is considerably below current prices.

2. Take profit now

This would have been a great trade and you need to book those large profits when they come.

Advantages: Remember that markets don’t double every day of the week, so take those gains.
Disadvantages: If price rallies to $100,000 you may wish you had held on. However, you could argue there is more to lose by holding than there is to gain by closing the trade.

3. Take profit at retest of recent highs

Advantages: This seems a good compromise and a decent level.
Disadvantages: If BTCUSD is a new digital currency then get in early. That won’t help you if you have closed your positions. The other disadvantage is if price does not go back to recent highs.

4. Trail stops underneath weekly lows

Advantages: You will be in for a large price shift higher if it comes.
Disadvantages: You will get taken out on the eventual pullback whenever it does come.

Whatever you do it is best to commit to one approach. Also realise there is no perfect answer to the question on when to take profits, as no-one has a crystal ball to see future prices. So, if you do take a profit that turns out to be too early, don’t be hard on yourself. Picking tops and bottoms is often more about chance than skill.

Also remember if you are in the UK that once you close your position you will be unable to open it again due the FCA regulation change. So, think carefully.

Learn more about HYCM

High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Crypto market bleeds after Bitcoin’s rejection at $52,000

The cryptocurrency market is still suffering from the impact of Bitcoin’s rejection of $52,000 for the second time in less than two weeks. Declines are likely to gain momentum, with BTC already trading under $50,000.

More Bitcoin News

Stellar future is decided by these two key levels

XLM has been under a massive consolidation period since the beginning of February and it’s on the verge of a colossal 45% move. The trading volume of Stellar has dropped significantly which indicates that it is ready for the next transition.

More Stellar Lumens News

SushiSwap becomes a multi-chain while SUSHI price aims for new all-time highs

In the past two weeks, the search for alternatives to the Ethereum network has been intensive as gas fees have made it impossible for some users to interact with certain ERC-tokens.

More Sushi News

Bancor Protocol price hints at a 35% bull rally as total value locked exceeds $1 billion

Bancor became the 13th DeFi platform to join the “four comma club,” a common moniker given to projects whose total value locked (TVL) hits $1 billion or more.

More Bancor News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: BTC journey to $100,000 might be easier than expected

This past week has been extremely beneficial for Bitcoin which jumped by 30% since Monday 8. Several positive announcements, especially Tesla purchasing $1.5 billion worth of the digital asset propelled the flagship cryptocurrency to new highs.

Read the weekly forecast

BTC

ETH

XRP