Why take crypto profits when you can just set a stop order?
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In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?
For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?
cryptocurrency profitability
asked 4 hours ago
Nick SolonkoNick Solonko
111
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In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?
For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?
cryptocurrency profitability
asked 4 hours ago
Nick SolonkoNick Solonko
111
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
– Bob Baerker
4 hours ago
1
Why ever take any profit?
– quid
4 hours ago
add a comment |
In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?
For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?
cryptocurrency profitability
asked 4 hours ago
Nick SolonkoNick Solonko
111
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?
For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?
cryptocurrency profitability
cryptocurrency profitability
asked 4 hours ago
Nick SolonkoNick Solonko
111
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 4 hours ago
Nick SolonkoNick Solonko
111
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 4 hours ago
Nick SolonkoNick Solonko
111
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 4 hours ago
Nick SolonkoNick Solonko
111
asked 4 hours ago
Nick SolonkoNick Solonko
111
111
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
– Bob Baerker
4 hours ago
1
Why ever take any profit?
– quid
4 hours ago
add a comment |
1
Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
– Bob Baerker
4 hours ago
1
Why ever take any profit?
– quid
4 hours ago
1
1
Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
– Bob Baerker
4 hours ago
Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
– Bob Baerker
4 hours ago
1
1
Why ever take any profit?
– quid
4 hours ago
Why ever take any profit?
– quid
4 hours ago
add a comment |
1 Answer
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The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.
answered 4 hours ago
Hart COHart CO
36k686103
add a comment |
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1 Answer
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votes
The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.
answered 4 hours ago
Hart COHart CO
36k686103
add a comment |
The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.
answered 4 hours ago
Hart COHart CO
36k686103
add a comment |
The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.
answered 4 hours ago
Hart COHart CO
36k686103
The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.
answered 4 hours ago
Hart COHart CO
36k686103
edited 4 hours ago
answered 4 hours ago
Hart COHart CO
36k686103
answered 4 hours ago
Hart COHart CO
36k686103
answered 4 hours ago
Hart COHart CO
36k686103
36k686103
add a comment |
add a comment |
Nick Solonko is a new contributor. Be nice, and check out our Code of Conduct.
Nick Solonko is a new contributor. Be nice, and check out our Code of Conduct.
Nick Solonko is a new contributor. Be nice, and check out our Code of Conduct.
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1
Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
– Bob Baerker
4 hours ago
1
Why ever take any profit?
– quid
4 hours ago