Been a hodler?
My BTCUSD longs were sold well before the $20,000 peak was hit last year on a trend line break. See here and here. However, I have had a number of questions posed to me about BTCUSD. Some folks have bought in at very low prices and are sitting pretty with some hefty gains.It can be hard to know what to do with large profits sometimes and when markets behave like BTCUSD you can stand to lose or gain large amounts on even the intraday moves. So having a plan is important. This article will give you some ideas on how to manage the profit.
1. Trail your stop beneath the daily chart trend line.
Pros: If the trend carries on you are in
Cons: The stop beneath the trend line is around $30,000 which is considerably below prices
2. Take profit at market
Pros: What a trade. Markets don't double every day, so take the reward. If BTCUSD crashes lower you got out at the right time
Cons: If price rallies to $100,000 you may have sellers regret
3.Take profit at retest of recent highs
Pros: A good compromise
Cons: Price may not get back there
4. Commit to the long game
If you are playing the long game and see BTCUSD as part of a new digital age then stops underneath $20,000 seem reasonable.
Pros: You will be in for a large price shift higher if it comes
Cons: If prices crashes you will lose a lot of profit, but still keep something. The other alternative of course is to hold on whatever. On the balance of probabilities you would see BTCUSD being some part of the financial furniture for the forseeable future
Whatever you do commit to one approach. Realise there is no perfect answer as no-one has a crystal ball to see future prices. If you take a profit that turns out to be too early, don't be hard on yourself as picking tops and bottoms is often more a chance of luck than skill. Also remember if you are in the UK that once you close your position you may struggle to open it again with the same broker after the FCA regulation change. So, think carefully before closing an existing position if you are UK based.
