The /biz/ Guide To Taking Profit

[Anonymous No.21892279]

Taking profits is good. In this thread I'll show you how to do it and why.

WHY?

Profit taking lets you remove the emotions from trading. Anyone who was around for 2017 knows this. It's easy to look at the BTC chart and think "if only I'd bought the bottom and sold the top." In reality, very few did. The vast majority of traders bought and sold sporadically. They didn't set any concrete goals (other than "make it" or "pay off that mortgage”) and reacted emotionally when their portfolio went up and down. This is why you hear so many stories of anons losing everything or breaking even and so few stories of people becoming crypto millionaires.

Profit taking acts as a hedge against this. This happens for two reasons:
1) Rewards for personal milestones. If you just sit there watching your portfolio blow up, you're going to get greedy or fearful based on how the market's doing each day. If you take profits at pre-decided intervals, you'll have smaller cash out events to look forward to and tide you over before the big one.
2) Risk management. With a good profit taking plan, you'll minimize or eliminate losses by retracting your initial investment before your first 10x, and make sure you have at least doubled or quadrupled your liquid gains in the event that you completely fuck up timing a market peak.

In the next post, I’ll explain how to take profits the right way.

[Anonymous No.21892293]

>>21892279
HOW?

People have varying philosophies on this, but I think there really is one best way.

It's called the /biz/ Success Algorithm:
** Take out 8% of your entire portfolio each time it doubles. **

To illustrate how this works, let's say you put in an initial deposit of $10,000.

After your first 2x ($20,000) you'd take out $2,000.
After your second 2x ($36,000) you'd take out $3,000.
After your third 2x ($66,000) you'd take out $5,000.
After your fourth 2x ($122,000) you'd take out $10,000.
After your fifth 2x ($224,000), you'd take out $18,000.

(Note that I'm rounding all numbers above to the nearest thousand - you should be doing this too, psychological numbers makes rewards feel more tangible and you'll never be timing the market at 100% exact intervals anyway.)

So now, assuming you're lucky enough to have made five 2xes in a row (which is not unimaginable in a GBR), you've got $38,000 in the bank and $206,000 in crypto.
That means in the absolute worst case scenario (LINK goes to zero), you've tripled your money.
In the "best" case scenario, assuming you decide you want to pull out now, you've made just ~25% less after tax than you would have if you didn't take profits.

Along the way, you’ll have made sensible liquidations at each 2x event:

- one fifth of your initial deposit
- half of your initial deposit
- 100% of your initial deposit
- 2x profit
- ~3x profit

Another nice thing about this method is that it scales. It works equally well if you’re investing $100 or $100,000.
Plus the post-tax loss (vs. if you had never taken profits) scales up reasonably with 2x events: if you chicken out and withdrawal everything after a 10x, you'll have only made ~10% less than if you hadn’t taken profits. Whereas if you’re lucky enough to experience seven 2xes, you’ll have made ~35% less - but you will have more than 50xed your post-tax earnings, so who cares?

I'll be sticking around for a bit to take questions and give advice. Good luck anons.

[Anonymous No.21892346]

>>21892279
Pretty reasonable desu. Will surely be shat on by retards.

[Anonymous No.21892420]

>>21892346
thanks anon, I decided to repost this because I saw people giving completely arbitrary "i'll take out {number} at {milestone}" answers to this question in an RSR thread and it triggered me kek

[Anonymous No.21893002]

Didn't read , never selling my linkees