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When To Sell Your Cryptocurrency And The Importance Of Setting Targets

When To Sell Your Cryptocurrency And The Importance Of Setting Targets

One of the most problematic questions for every modern trader is ‘when is the right time for selling?’ If someone knew the answer to that, it would have taken over the market.

 

The thing is, it is almost impossible to know when is the right time for selling. Even if you have all the statistics and predictions, you will still struggle with this decision.

 

One reason why this decision is so hard is that knowing when to sell is not an action; it is a set of implications.

 

So, before possessing the question of when you should sell your cryptocurrency, you have to know your goals and set some targets. Once you have that, you can learn how to read the charts, and you will be ready to start thinking about selling. But first, let us explain what cryptocurrencies are.

 

What is Cryptocurrency?

 

Cryptocurrency is a digital currency that is completely virtual. It is secured by cryptographic systems, which make it practically impossible to counterfeit (or double-spend it).

 

Cryptocurrencies are based on blockchain technology. They are essentially decentralized networks based on a distributed ledger, carried on by a disparate network of computers.

 

Simply put, cryptocurrency is a digital asset that is based on a network, which is allocated across many computers.

 

There are many advantages to owning cryptocurrency assets, such as faster (and cheaper) money transfers and decentralized systems that won’t fall to pieces.

 

There are many cryptocurrencies nowadays. Some of the most famous are Bitcoin, Ethereum, Litecoin, Ripple, etc.

 

How Does it Work?

 

Before focusing on the question ‘when should I sell my cryptocurrency?’ we need to explain how and where you can buy them. The process is quite simple; you need to follow only three steps.

 

Choose a Platform

The first step is to choose whether to use a traditional broker or a dedicated cryptocurrency exchange. The first one is an online broker who offers to buy and sell cryptocurrencies the same as financial assets (such as stocks, bonds, etc.)

 

This kind of platform often offers fewer features with lower costs. The difference between a traditional broker and dedicated cryptocurrency exchange is that the latter offers different cryptocurrencies, wallet storage, interest-bearing account, and charges asset-based fees.

 

Either way, you should consider what they are offering, how much they charge, and check out their security, storage, and withdrawal options.

 

Funding Accounts

The next step is to fund your account so that you can begin trading. Many exchanges will allow you to purchase crypto using common currencies such as the US dollar, Euro, or British Pound.

 

If you are planning to purchase crypto via credit card, you should know that some exchanges consider that risky. The reason is that cryptos are highly volatile, and it isn’t advisable to pay high credit card transaction fees.

 

Order

You can place your order via a broker or an exchange platform. When you are buying, just select buy, choose the order type, enter the amount of crypto you want to purchase, and confirm your order. The same order goes for selling.

 

When Should I Sell My Cryptocurrency: The Bigger Picture

When Should I Sell My Cryptocurrency The Bigger Picture

Throughout history, people have been exchanging one thing for another.

 

In this day and age, people usually buy and sell stocks. You will find a company that you believe will be worth much someday, and you buy a stock – you invest in it.

 

Then when that stock reaches its peak, you can either sell the stock and leave with the money or stay and wait for it to go even higher. That is the gamble of the trading business: the stock may never go up again. Or maybe it can, in 30 years. One can never know.

 

Let’s present an example. Back in the 1960s, Toys R Us wasn’t very popular. However, if you had invested in the company then, you would have made significant earnings in the 1990s. The ones who did sell their stocks – left with some great money. Others were left with nothing because the company decided to decline in the early 2000s.

 

Every single one of us understands the significance of letting things go deep down. You can hold on to something for a certain amount of time, but eventually, the day will come when you will have to let it go because someone else sees more value in it.

 

The point of being successful in trading is knowing when to let things go. Once you combine your inner sense with research and a little bit of technical knowledge, you are on the right path.

 

When Should I Sell My Cryptocurrency: Setting Targets

 

We know that we still haven’t answered the thing that bothers you the most (when should I sell my cryptocurrency), but before we get there, we have to put an accent on the importance of setting targets.

 

To set the right target, you need to know your goal. Ask yourself, what is it that you want to do with this investment? Do you want a small break, or are you in it for the long haul?

 

When you have the answers to your questions, you can start thinking about setting targets.

 

The first target will be set once you decide how much is enough for you. For someone who is investing in his stock long-term, this target is negligible. If you are just looking to make some profit, then this is the first decision you should make.

 

When deciding, you have to think about how much your initial investment was and how long are you willing to wait for an ROI – return on investment.

 

For example, you invest 1,000 dollars in stock. After two months, the price went up to $32,000. Your profit here would be 3,200%, which is pretty incredible. If you decide not to sell when it hits that mark, you are risking losing everything. Also, if you sell and the price keeps going up, you could miss out even more.

 

This is where your first target comes into action. If you had a goal of making a 2,000% profit, then it is settled. You sell the stock and move on. However, if your goal was to make an even bigger ROI, then you wait up.

 

Ultimately, there is no answer to the question ‘when should I sell my cryptocurrency?’ For many people, it all comes down to a gut feeling.

 

The Main Question: When Should I Sell My Cryptocurrency?

 

Many traders nowadays are looking for rapid and short-term profits. Since they often have a large budget, they might invest as little as 1% and still make a huge profit.

 

Experienced traders would hardly jeopardize more than 1% of their budget. With that in mind, let’s talk about some theories that will help you decide on the question ‘when should I sell my cryptocurrency?’

 

When Should I Sell My Cryptocurrency: The ‘Regret Theory’

The first concept that will help you decide when to sell is the ‘regret theory.’ This theory helps people visualize the option that would leave them with the least amount of regret in a certain situation.

 

It is beneficial when it comes to investing, and also, it works in real-life situations as well.

 

Imagine you bought bitcoin in 2010. If you had sold it then, you would have missed the opportunity to earn a huge profit. If you’ve invested $350, now you can sell one bitcoin for around $35,000.

 

Therefore, if you are planning on selling, you can do one of three things: cash in your investments, hold on to your assets and hope they will rise again, or lose the money if the stock goes down.

 

When Should I Sell My Cryptocurrency: Influencing the Price Movement

The right decision can not only provide you with a higher profit, but it can also avoid losses on your investments. To do this right, you have to rely on statistics, predictions, analyses, and news.

 

Following this, you need to understand what influencing the price movement is. The economic law is pretty straightforward: when you invest more, the price goes up and in reverse.

 

When we take a look at the recent changes in the market, there is a low chance of finding some sort of balance. Although some sources think the prices will continue to rise, it is hard to find a reliable one on which you can rely all the time.

 

Many external factors directly influence the prices, and there is nothing you can do about it. You have to keep track of every little change and news that can help you decide when to sell.

 

Whatever you decide, make sure it is not a rushed move. People who were determined to sell their bitcoins after buying them in 2017 lost a lot of money. The current price of bitcoin (for 2022) is around $40,000, and there are some indications that it will continue to rise.

 

When Should I Sell My Cryptocurrency: Bottom Line

There are many important tools for conducting your sales once you decide to sell certain values. One of them is ‘limit sell order.’ This tool allows you to cancel your transactions if the price of your currency jumps up to some extent.

 

The key is to give yourself some time to make a profit. Investing for the long haul can reduce the risk and increase the chances of making money down the line.

 

Once you know the market and you have established your goals, you will have a clear vision. The truth is, no one can tell you when is the best moment to sell.

 

You just need to follow your targets and just work with precaution.

 

Stop the Loss

Stop the Loss

Now that we’ve answered the inquiry ‘when should I sell my cryptocurrency?’, pay attention to the potential monetary losses.

 

If you are an investor, you should be prepared that there is always the possibility of things going south. Since losing is not in our nature, people are often more determined on how much they are willing to lose than what they wish to gain.

 

For this purpose, there is a tool on the crypto exchange that automatically closes the trade once your coins reach a certain point.

 

Traders who have a lot of experience are inclined to hang around 1% of their bankroll, which means they are willing to risk that much any time of the day. If that doesn’t seem like a lot to you, just imagine that your bankroll is worth $1 million – then the numbers start to add up.

 

If you are on the lower end of your budget and you manage to keep it to the extent that will not affect your income, you might save yourself from trouble.

 

Conclusion

 

Investing in cryptocurrency can be a risky rollercoaster ride. Most of the time, you have no way of knowing whether your investment will turn out to be the greatest or the poorest decision you could have made.

 

Keep in mind that the stock prices change from one day to another. If the value of your cryptocurrencies is $1,000 today, tomorrow it may be $500.

 

The truth is, there is no risk-free investment and the chance of defeat is always on the table. You can turn this into your biggest focal point or your biggest fear. Whether you do it for fun or for the money, there will always be some hard choices in trading.

 

Remember to start slow and follow your targets. Even if you do not make the right choice every single time, don’t worry. Just go for it without regret.

 

Whenever you decide to sell your cryptocurrencies, how you choose to operate is essential. Our most important advice is to focus on steering clear of losses instead of concentrating just on the wins.

 

Make a plan and stick to it. Determine the amount of money you are willing to spend and pay close attention to the daily changes in the market. If you are planning to take a big risk, then there better be a huge amount of money involved.

 

Finally, we hope that we have answered your question about ‘when should I sell my cryptocurrency?’ and helped you make that big decision.

 

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