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?
Thatβs 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?
Thatβs what this thread is gonna be about!
1/x
Obviously, it's hard as fuck to take profit.
It's especially difficult when you're taking profit with the intent on buying back lower.
Don't do that.
2/x
It's especially difficult when you're taking profit with the intent on buying back lower.
Don't do that.
2/x
Unless you're an experienced trader, trying to sell and buy lower is a fool'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'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't work. RIP 2017-2018.
7/x
That didn'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't. No, sir.
That wasn'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't. No, sir.
That wasn'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'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'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'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'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'm not a fucking prophet.
It could top next week. That'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'm not a fucking prophet.
It could top next week. That's a realistic outcome.
So I needed to find balance.
13/x
While I, of course, want to pay off my loans, I don'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'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'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'd freeze, hope for a bounce, then get a bounce, then not sell because it's your whole fucking portfolio, and then it would dip further, and you'd be screwed by the time you're unfrozen.
But let's say, you've sold 50%+ of your portfolio by then?
16/x
But let's say, you've sold 50%+ of your portfolio by then?
16/x
I'd argue you'd have an easier time selling at that point.
You'd be more levelheaded, less of a moon boi.
You'd be like, "shit, it sucks to sell here, but I've already sold lower, so what's the big deal?"
And that's IMPORTANT.
17/x
You'd be more levelheaded, less of a moon boi.
You'd be like, "shit, it sucks to sell here, but I've already sold lower, so what's the big deal?"
And that's IMPORTANT.
17/x
If you've been following me for a while, you've seen me say that chasing green candles and fomo'ing, EVEN IF IT WORKS OUT, can be dangerous and harmful in the long run.
You're training your brain to make dumb decisions, and dumb decisions eventually bite you in the ass.
18/x
You're training your brain to make dumb decisions, and dumb decisions eventually bite you in the ass.
18/x
There'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'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't shake that bias.
They trained their brains awfully.
Their psychology was fucked.
19/x
Many of them turned things around, but I'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
Maybe I'll touch on the PTSD thing later but not in this thread.
Ok, so let's sum things up so far:
21/x
Ok, so let's sum things up so far:
21/x
1. Figure out why you're here. What are your goals?
2. Take your psychology and mindset seriously. Don't develop habits that may help you in the short-term but will fuck you in the long-term.
Ok, we're up to #3 now.
Hope y'all are enjoying this thread so far!
22/x
2. Take your psychology and mindset seriously. Don't develop habits that may help you in the short-term but will fuck you in the long-term.
Ok, we're up to #3 now.
Hope y'all are enjoying this thread so far!
22/x
Let's touch on #3.
Herd mentality. Groupthink.
You've probably heard these terms by now.
Humans are herd creatures.
23/x
Herd mentality. Groupthink.
You've probably heard these terms by now.
Humans are herd creatures.
23/x
We love company.
Whether that mean celebrating with loved ones.
Sharing misery with others.
Having a group, a herd, makes good moments feel better and bad moments, less terrible.
24/x
Whether that mean celebrating with loved ones.
Sharing misery with others.
Having a group, a herd, makes good moments feel better and bad moments, less terrible.
24/x
How does this apply to trading?
ONLY UP!
NEVER BELOW $60K AGAIN!
TO THE MOON!
It's easy to get onboard with these movements, right?
Gimme some fucking laser eyes!
25/x
ONLY UP!
NEVER BELOW $60K AGAIN!
TO THE MOON!
It's easy to get onboard with these movements, right?
Gimme some fucking laser eyes!
25/x
If the herd, everyone in your virtual circle, is screaming up up up, what are you going to do?
Sell and be shunned by your community?
No.
You're going to buy.
You're going to hold.
Hell, they've probably been right for some time, so why would that change now?
26/x
Sell and be shunned by your community?
No.
You're going to buy.
You're going to hold.
Hell, they've probably been right for some time, so why would that change now?
26/x
It's so easy to fall into this trap.
Everyone is giddy, happy, euphoric.
EUPHORIA IS RUNNING THROUGH YOUR VEINS.
Hell, it's running through mine.
You're invincible. I'm invincible. Nothing can go wrong.
Maybe you've felt this way when in love?
27/x
Everyone is giddy, happy, euphoric.
EUPHORIA IS RUNNING THROUGH YOUR VEINS.
Hell, it's running through mine.
You're invincible. I'm invincible. Nothing can go wrong.
Maybe you've felt this way when in love?
27/x
So why sell?
This is the exact danger of groupthink.
You get sucked into the hard and lose all sense of logic.
You lose control.
Let your emotions replace logic.
And the scariest part?
28/x
This is the exact danger of groupthink.
You get sucked into the hard and lose all sense of logic.
You lose control.
Let your emotions replace logic.
And the scariest part?
28/x
It feels good.
Really fucking good.
In that moment, you feel you're making the right decision.
Don't get me started on the stories I've read over the years.
Life-changing mistakes in the blink of an eye.
All because of that intoxicating euphoria and herd comfort.
29/x
Really fucking good.
In that moment, you feel you're making the right decision.
Don't get me started on the stories I've read over the years.
Life-changing mistakes in the blink of an eye.
All because of that intoxicating euphoria and herd comfort.
29/x
If it's not clear by now, groupthink is bad.
Getting sucked into the herd is bad.
You want to stay levelheaded, focused, reliant on your own logic.
Away from emotion.
Wait, let's touch on panic selling for a second.
30/x
Getting sucked into the herd is bad.
You want to stay levelheaded, focused, reliant on your own logic.
Away from emotion.
Wait, let's touch on panic selling for a second.
30/x
Panic selling comes from the same part of the brain.
Pleasure and pain.
Both are influenced by the ventral pallidum, I think.
I'm not an expert on neurobiology, but just think about people into BDSM.
Ever wonder why?
31/x
Pleasure and pain.
Both are influenced by the ventral pallidum, I think.
I'm not an expert on neurobiology, but just think about people into BDSM.
Ever wonder why?
31/x
Pain and pleasure are connected.
So are panic selling and FOMO buying.
We panic sell because we get a resolve.
That aching feeling in your stomach goes away the minute you sell.
Same thing when you buy.
We are literally programmed to make bad financial decisions.
32/x
So are panic selling and FOMO buying.
We panic sell because we get a resolve.
That aching feeling in your stomach goes away the minute you sell.
Same thing when you buy.
We are literally programmed to make bad financial decisions.
32/x
When $BTC dipped below 30k, (nearly) everyone, the herd, screamed for lower.
Fear kicked in.
Many panic sold.
Few bought.
I bought some alts, but I felt sick to my stomach.
It felt like a bad decision.
And that's good, great even.
33/x
Fear kicked in.
Many panic sold.
Few bought.
I bought some alts, but I felt sick to my stomach.
It felt like a bad decision.
And that's good, great even.
33/x
You're probably thinking "wtf, why is that great?!"
Well, I had LOGICAL reasons to buy and feeling bad meant I was going against the herd.
Ok, let's pause for a moment.
Why is going against the herd a good thing?
Is it always a good thing?
Am I fucking with you?
34/x
Well, I had LOGICAL reasons to buy and feeling bad meant I was going against the herd.
Ok, let's pause for a moment.
Why is going against the herd a good thing?
Is it always a good thing?
Am I fucking with you?
34/x
If everyone is selling, who's left to sell?
Inversely, if everyone is buying, who's left to buy?
Sometimes, everyone buying leads to outside FOMO, aka new market participants to push price higher.
But once everyone's in, who's left to buy?
No one.
35/x
Inversely, if everyone is buying, who's left to buy?
Sometimes, everyone buying leads to outside FOMO, aka new market participants to push price higher.
But once everyone's in, who's left to buy?
No one.
35/x
There will be a time in the next few months when everyone, and I mean EVERYONE, will be screaming buy.
That relative who's been calling $BTC a scam for months?
Your friend who gives you shit anytime you talk about crypto?
36/x
That relative who's been calling $BTC a scam for months?
Your friend who gives you shit anytime you talk about crypto?
36/x
Ok, I can't say this will for sure happen.
I have an uncle who probably will never buy.
But you get the idea.
When practically everyone is in the market, kinda like in May 2021, you gotta wonder who's left to buy?
Same thing when everyone is panic selling.
37/x
I have an uncle who probably will never buy.
But you get the idea.
When practically everyone is in the market, kinda like in May 2021, you gotta wonder who's left to buy?
Same thing when everyone is panic selling.
37/x
Capitulation is usually a good sign to buy.
As is a rounded bottom where accumulation starts.
No more sellers.
And that awful feeling when you buy?
Embrace.
Don't embrace FOMO.
38/x
As is a rounded bottom where accumulation starts.
No more sellers.
And that awful feeling when you buy?
Embrace.
Don't embrace FOMO.
38/x
Ok, so we've touched a lot on the psychology of trading.
I can go on and on and on, but I'm hungry and want to order dinner.
So let's get to #4: how do you determine when to sell?
39/x
I can go on and on and on, but I'm hungry and want to order dinner.
So let's get to #4: how do you determine when to sell?
39/x
Obviously, you need to avoid the pitfalls we discussed in #3.
Just being aware of them puts you ahead of most traders.
I don't want to dive to deep into the when as it depends on the factors discussed back in May 2021.
Remember? Goals, timeline, financial situation.
40/x
Just being aware of them puts you ahead of most traders.
I don't want to dive to deep into the when as it depends on the factors discussed back in May 2021.
Remember? Goals, timeline, financial situation.
40/x
Ok, quick recap:
- figure out your goals for being in crypto
- figure out how long you're willing to wait to reach them
- figure out your financial situation and how it affects your goals and timeline
Vague, yes.
But let's get into some technical stuff for "when."
41/x
- figure out your goals for being in crypto
- figure out how long you're willing to wait to reach them
- figure out your financial situation and how it affects your goals and timeline
Vague, yes.
But let's get into some technical stuff for "when."
41/x
Fibonacci extensions.
Long-term trend lines.
Log charts.
You'll find resources for this all over crypto twitter.
I've heard the best things about @CryptoCred's pinned tweet, so I'd recommend diving into it:
42/x
Long-term trend lines.
Log charts.
You'll find resources for this all over crypto twitter.
I've heard the best things about @CryptoCred's pinned tweet, so I'd recommend diving into it:
42/x
Once you have a grasp on some basic TA, start determining your target prices.
Have a few?
Write them down.
How much do you want to sell at each target?
Write the amounts down.
43/x
Have a few?
Write them down.
How much do you want to sell at each target?
Write the amounts down.
43/x
This is called "scaling out."
I touched on it earlier when discussing how difficult it is to sell your entire portfolio in on fell swoop.
But this is how you do it.
This is how you break things up into little pieces.
Makes it much easier, no?
44/x
I touched on it earlier when discussing how difficult it is to sell your entire portfolio in on fell swoop.
But this is how you do it.
This is how you break things up into little pieces.
Makes it much easier, no?
44/x
Let's say you've never seen $50k in your life and your portfolio is now worth $500k?
Good luck selling it all at once.
Seriously, if anyone here has done that under those circumstances, comment.
Tell me how the fuck you did it.
Because I call bullshit.
45/x
Good luck selling it all at once.
Seriously, if anyone here has done that under those circumstances, comment.
Tell me how the fuck you did it.
Because I call bullshit.
45/x
But let's say you sell that $500k in twenty parts?
Doable.
I'd buy it.
Trustworthy.
You're not gonna sell the top scaling out, but you'll sell.
Unrealized will turn into realized.
And almost life changing will turn into life changing.
46/x
Doable.
I'd buy it.
Trustworthy.
You're not gonna sell the top scaling out, but you'll sell.
Unrealized will turn into realized.
And almost life changing will turn into life changing.
46/x
I want to say those words again because they hit me hard as I wrote them:
You're not gonna sell the top scaling out, but you'll sell.
Unrealized will turn into realized.
And almost life changing will turn into life changing.
I'm tearing up a bit.
47/x
You're not gonna sell the top scaling out, but you'll sell.
Unrealized will turn into realized.
And almost life changing will turn into life changing.
I'm tearing up a bit.
47/x
Too many stories of people making life-changing money only to lose it all by trying to squeeze out a little bit more.
If you watched Squid Game, you saw it happen in Red Light Green Light.
Those greedy for an extra step or two getting shot.
48/x
If you watched Squid Game, you saw it happen in Red Light Green Light.
Those greedy for an extra step or two getting shot.
48/x
Be greedy but not a pig.
Make a plan.
Write it down.
I'm serious.
Put it on paper and keep it easily in view.
49/x
Make a plan.
Write it down.
I'm serious.
Put it on paper and keep it easily in view.
49/x
Don't just write down your plans for taking profit.
Write your goals for the market.
Why are you here?
Keep that answer at the forefront of your mind.
And don't lose sight of it.
Don't get caught up in herd, the groupthink, the euphoria.
50/x
Write your goals for the market.
Why are you here?
Keep that answer at the forefront of your mind.
And don't lose sight of it.
Don't get caught up in herd, the groupthink, the euphoria.
50/x
Ok, I have to take a break for dinner.
Can't promise I'll finish this thread tonight, but I'd like to.
The final topic I want to cover is: scared money donβt make money... touching on risk vs. volatility vs. stupidity.
51/x
Can't promise I'll finish this thread tonight, but I'd like to.
The final topic I want to cover is: scared money donβt make money... touching on risk vs. volatility vs. stupidity.
51/x
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