Opinion: Strategies for taking profits

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).