Opinion: Strategies for taking profits
Published on: 04 June 2020
The crypto markets have turned bullish again after a long and hard bear market. CARUS-AR is up over 100% the past 6 months!
With sentiment changing, Bitcoin getting more accepted by traditional markets and the amazing growth and developments in DeFi and Etherereum, we are very positive about the likelyhood of a truly amazing ROI the coming months for the CARUS_AR Crypto Strategy.
*The content below is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice.* Bullish times and positive outlooks make us ask the following question: ##What is the best strategy for taking profit? We all love to see a green market, BTC price going up, and ROI % very high... However markets never go up forever and nobody can perfectly time the top and/or bottom (wish we could). Considering this, a strategy is needed to take profits. Below a few strategies any Crypto investor can use to take profits in bullish markets: ####1 - Fixed sell targets A very simple and basic startegy can be to simply have a target price / return of investment (ROI) and sell when you reach that. Lets say you invest 100 EURO, you could create a target of 50% profit and sell all your holdings when the portfolio gets to 150 EURO or higher. **Positives** - very easy to implement - predicatable profits (if target is reached) **Negatives** - high potential to miss larger bull markets - no profits if target is not reached (even if it gets very close) ####2 - % ROI sell targets A more advanced system could be to set a % return of investment (ROI) and sell only the profit every time you reach that. Lets say you invest 100 EURO, you could create a sell target of 10% profit and sell 10 EURO (10% ROI) when the portfolio gets to 110 EURO or higher. Once you have sold, you can reapeat this every time your remaining investment gets to 10% profit or above again. **Positives** - easy to implement - multiple smaller rounds of profit (if markets continues to go up) - keeps you invested in the market with your initial value **Negatives** - requires you to watch the ROI and markets often - the timing of taking profits does not consider the trend or market (you could sell at a bad time) ####3 - Sell a fixed % every week when in profit In this strategy you plan to sell a fixed % or amount, as long as you are in profit compared to the previous week, every week. Lets say you invest 100 EURO, and you sell 5% of your holdings every Monday morning. But you only sell if you are in profit more then 5% compared to the previous week (105 EURO or more). Should the market move 20% to the upside, you would sell 5% of the total: 120 EURO, 6 EURO profit. The week after you will start at 114 EURO and will only sell if the price is more then 119.70 EURO (a 5% ROI that week). **Positives** - multiple smaller rounds of profit (if markets continues to go up) - keeps you invested in the market with your initial value - does not require you to watch the markets all the time - relatively simple to implement **Negatives** - will not profit from short term gains during the week - the timing of taking profits does not consider the trend or market (you could sell at a bad time) ####4 - Sell the pumps! Only sell a % when the markets moves up a lot. This sounds simple and basic, but it is not... What do you consider a 'big move'?, how do you time this? Doing this well requires you to become a trader and constantly watch the price, not a simple thing to do. **Positives** - larger payouts of profit (if markets continues to go up) - prevents you from selling small moves, keeps you 'in the game' **Negatives** - very hard to do correctly - takes a lot of time, you need to watch the markets constantly ####5 - HODL Not sure if this can be called a strategy, but many use this. Just never sell! Keep your investement no matter what the market does, hoping someday you are wealthy or Bitcoin becomes the new dollar. **Positives** - very easy - highest profit if crypto moons **Negatives** - high risk - it is 'all or nothing' - why even invest if you never use the profits? ####6 - Sell a fixed amount every month A great and simple strategy once you have a good ROI, just pick a nice EURO amount to cash out very month! Lets say your original investment was 1000 EURO but after the past 6 months the valuer of your portfolio is over 2000 EURO. You could from now on sell 100 EURO worth of profit every month. This will give you a nice extra some of income and will reduce your holdings slowly, allowing you to stay in the markets longer. **Positives** - very easy - getting the same monthly exra income is great **Negatives** - should bull market end you may not have taken a lot of profit yet ##The CARUS-AR profit taking strategy For CARUS-AR we choose to use strategy **#3 Sell a fixed % every week when in profit**, but we take a more active approach to this. Since we actively watch the markets and trends, we choose to select the profit taking moments ourselves and not do this simply weekly. **Once we see the crypto markets turn truly bullish (we are getting very close now), CARUS-AR will start to:** - increase our FIAT holdings (TUSD) in steps by 0.5% - adjust the frequency of these profit taking steps depending om market trends and sentiment (active management) - use the FIAT TUSD position to *buy the dips* (BTFD) when larger corrections happen Using this strategy we combine the positive aspect of continious profit taking with active management. ####We hope to contine to outperform both Bitcoin (BTC) and Ethereum (ETH). ![CARUS-AR outperforms both Bitcoin and Ethereum](assets/components/carus-ar/content/blog/strategies-for-taking-profits/image_02.jpg)