Welcome back,
Let us talk about about one of the most important investment strategies today. In this blog, we are going to discuss how a person who is starting his journey in crypto trading should make decisions so that he can avoid making losses and make sure that he gets the most out of his investments, So if you are someone without any knowledge of Crypto or Investments or even if you are new to this space you should continue reading this blog.
So, when you start your investment journey or when you start your trading journey, you will come across many situations. One of those situations will be where you make good profits, and the other will be where you make losses. Now, in both the cases, your emotions will try to play with you because when you make profits, your emotions, your brain, and your heart will tell you to keep holding those assets so they can rise further and you can make even more profits from your holdings. But in case you make losses, your heart, your mind, and your emotions will tell you to sell them so that you avoid making any further losses.
So here is how you can make sure that you do not fall into this emotional trap and that you take a good decision in case you are making profits or in case you are making losses. The thing you have to do is that you have to create your targets. That is very important. If you are someone who is investing or trading without any targets or goals, then you will probably end up holding your assets be it in the case of losses or in the case of profits. So, always make sure that you have your clear targets for your investment.
Now that you have learnt that making a target is important, here we will take an example to understand how it actually helps in the real world. Let us suppose you invested in an asset at $20 and that asset hits a peak value of $100. If you are there without any target, you might end up holding that coin even at $100. You will fail to sell it at the peak value or near to that peak value. Then, when you see it crashing and coming down to $90, then $80, then $60 you will probably end up selling it at 60 or even 50 dollars.
But in case you have set your targets properly, and you know what you are aiming for, then you will not end up selling your assets at $50 or $60 in panic. Or even if you do, at least you will not regret it, because you sold it at your own planned target, not as a result of panic or compromise. You did not miss the peak value because of fear or greed, you followed your strategy and booked your profits as planned.
So when you have targets, it is even more useful when you have not a single but multiple targets distributed in equal or even varied portions of your total investment. For example, you bought that asset at $20. When it reaches $40, you sell 25% of your investment. Now you are left with 75%. Then you sell another 25% at $60, and another 25% at $80. And let us suppose you have decided that if the token goes above $80, you will sell the remaining amount. So, when it crosses $80, you sell everything.
Now in this case, your average selling price will probably be above $65, which is obviously better than the first situation where you sold at $50 or $60. One thing to remember, it is not guaranteed that you will even sell at $50 or $60 if you do not have a target. Because once you see an asset go up to $100, it becomes really hard to sell at half that price. So there is a big chance that you might not even sell at $50 or $60, and it could crash down to $30 or even $20 or lower.
That is why creating targets is really important and if you are someone who is new to the crypto industry and has recently started your investment journey, then make sure you are not one of those people who invest without targets. Do not just start trading or investing and keep holding your assets while watching their value go up and down. This is not what we are here for and we all want to make money and to make money, we must set targets and work stratigically.
One more thing, before I end this blog. I have to say that by setting targets, you will obviously miss the peak values attained by your asset but believe me, no one in this industry is smart enough to always catch the peak value of an asset. If someone is holding Bitcoin, Ethereum, and BNB, I can guarantee you that no one in the industry can perfectly exit at the top price for all three of them. It is really very difficult to do so. So it is better to set targets, achieve them, and be satisfied with what you have achieved. Do not hunt for the peak values and just focus on your targets, and when they hit them, make sure to exit the market and enjoy.
Thank You and Happy trading everyone.
