Read on Twitter
You step into crypto twitter.
You see people slinging 7-figure positions like candy.
You look at your portfolio... the money can change your life, but it now seems small.
How does one take profit in the illusory age of money?
That’s what this thread is gonna be about!
1/x
You see people slinging 7-figure positions like candy.
You look at your portfolio... the money can change your life, but it now seems small.
How does one take profit in the illusory age of money?
That’s what this thread is gonna be about!
1/x
Obviously, it& #39;s hard as fuck to take profit.
It& #39;s especially difficult when you& #39;re taking profit with the intent on buying back lower.
Don& #39;t do that.
2/x
It& #39;s especially difficult when you& #39;re taking profit with the intent on buying back lower.
Don& #39;t do that.
2/x
Unless you& #39;re an experienced trader, trying to sell and buy lower is a fool& #39;s errand.
Ok, so how do you decide when to take profits then?
Is there some secret?
3/x
Ok, so how do you decide when to take profits then?
Is there some secret?
3/x
No, no secret.
It comes down to your goals.
Why did you invest in crypto?
4/x
It comes down to your goals.
Why did you invest in crypto?
4/x
Are you here to make life-changing money?
To supplement your income?
To pay off loans?
For the technology?
5/x
To supplement your income?
To pay off loans?
For the technology?
5/x
Knowing why you& #39;re here is key to determining when/how to take profit.
Let me use myself as an example.
6/x
Let me use myself as an example.
6/x
When I first got into crypto, I wanted to make some quick cash.
That didn& #39;t work. RIP 2017-2018.
7/x
That didn& #39;t work. RIP 2017-2018.
7/x
When I returned in early 2019, my goal was different.
I was here to make enough money to pay off my law school student loans.
I had actually been thinking about it for a while.
8/x
I was here to make enough money to pay off my law school student loans.
I had actually been thinking about it for a while.
8/x
In late 2017, I told my law firm officemate that I was gonna pay off my loans by investing.
He and many others would just put all their excess cash toward their loans as it was guaranteed return in the form of less interest.
I didn& #39;t. No, sir.
That wasn& #39;t for me.
9/x
He and many others would just put all their excess cash toward their loans as it was guaranteed return in the form of less interest.
I didn& #39;t. No, sir.
That wasn& #39;t for me.
9/x
Ok, enough of that tangent.
A few months ago, I got to thinking about my exit plan.
I began wondering how I& #39;d feel if I waited too long to sell and became a bagholder.
My reaction was on point.
10/x
A few months ago, I got to thinking about my exit plan.
I began wondering how I& #39;d feel if I waited too long to sell and became a bagholder.
My reaction was on point.
10/x
I would be pissed, arguably depressed.
Hell, I& #39;m still worried about it now.
Paying off my loans, in and of itself, would be life changing for me.
Trust me, my loans equate to the cost of a small house.
11/x
Hell, I& #39;m still worried about it now.
Paying off my loans, in and of itself, would be life changing for me.
Trust me, my loans equate to the cost of a small house.
11/x
With my goals reaffirmed (for a while I had gone from just paying off my loans to making stacks of cash on top of that), I was able to start planning my exit.
I took into account the following:
12/x
I took into account the following:
12/x
First, how high do I realistically think my coins will go?
I think $ETH goes to $10k+, but I also was honest with myself that I& #39;m not a fucking prophet.
It could top next week. That& #39;s a realistic outcome.
So I needed to find balance.
13/x
I think $ETH goes to $10k+, but I also was honest with myself that I& #39;m not a fucking prophet.
It could top next week. That& #39;s a realistic outcome.
So I needed to find balance.
13/x
While I, of course, want to pay off my loans, I don& #39;t want to look back and think, "holy shit, I left a ridiculous amount of money on the table."
I began thinking about the concept of "scaling out."
Selling into strength.
14/x
I began thinking about the concept of "scaling out."
Selling into strength.
14/x
Let me take a second to discuss the psychology here.
If you haven& #39;t sold a single coin in your portfolio and one day you wake up and find the market has dropped 30% in a day after a heavy volume move up.
In other words, the blow-off-top surprised you.
What would you do?
15/x
If you haven& #39;t sold a single coin in your portfolio and one day you wake up and find the market has dropped 30% in a day after a heavy volume move up.
In other words, the blow-off-top surprised you.
What would you do?
15/x
Odds are you& #39;d freeze, hope for a bounce, then get a bounce, then not sell because it& #39;s your whole fucking portfolio, and then it would dip further, and you& #39;d be screwed by the time you& #39;re unfrozen.
But let& #39;s say, you& #39;ve sold 50%+ of your portfolio by then?
16/x
But let& #39;s say, you& #39;ve sold 50%+ of your portfolio by then?
16/x
I& #39;d argue you& #39;d have an easier time selling at that point.
You& #39;d be more levelheaded, less of a moon boi.
You& #39;d be like, "shit, it sucks to sell here, but I& #39;ve already sold lower, so what& #39;s the big deal?"
And that& #39;s IMPORTANT.
17/x
You& #39;d be more levelheaded, less of a moon boi.
You& #39;d be like, "shit, it sucks to sell here, but I& #39;ve already sold lower, so what& #39;s the big deal?"
And that& #39;s IMPORTANT.
17/x
If you& #39;ve been following me for a while, you& #39;ve seen me say that chasing green candles and fomo& #39;ing, EVEN IF IT WORKS OUT, can be dangerous and harmful in the long run.
You& #39;re training your brain to make dumb decisions, and dumb decisions eventually bite you in the ass.
18/x
You& #39;re training your brain to make dumb decisions, and dumb decisions eventually bite you in the ass.
18/x
There& #39;s a reason you see so many horror stories of 2016-2017 traders losing it all in 2018-2019.
They got used to an "only up" market and couldn& #39;t shake that bias.
They trained their brains awfully.
Their psychology was fucked.
19/x
They got used to an "only up" market and couldn& #39;t shake that bias.
They trained their brains awfully.
Their psychology was fucked.
19/x
Many of them turned things around, but I& #39;d argue they did so by adjusting their mentality and changing their habits.
By deeply reflecting on themselves and recognizing that markets are not video games and that shit happens.
You also see a lot of bear-market PTSD.
20/x
By deeply reflecting on themselves and recognizing that markets are not video games and that shit happens.
You also see a lot of bear-market PTSD.
20/x
