Taking profit series part 2: how to strategise your take-profit plan.

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No one is a profitable investor, until there's a plan. But how to strategise your take-profit plan? In the second thread of my take-profit series, we're gonna look at: ・ Timeframe of investments ・ Setting take-profit targets ・ Token unlocks ・ Monitoring roadmap 🧵

In my "Take-Profit" series I share lessons learned that helped me become more consistent in making profit. Threads: 1: Why it hurts to take profit 2: strategise your take-profit plan 3: Hedging yourself against psychological weak spots Thread 1 👇 twitter.com/Zetoveraleenzet/status/1529475044874760194?s=20&t=1lEiuf8gbWQRgTO6ldM2jg

Imagine you're in 50% profit but you are in doubt if you should sell. That's because your take-profit plan is absent. I'm guessing you want to know how to create a killer plan that makes you irresistible to emotion driven profit taking. But what comes into play?

It goes without saying, there's a myriad of factors that constitute a take-profit plan: ・ Take profit levels ・ Token unlocks ・ Roadmap progression However, in my strategy, timeframe of investment is undoubtedly the most important factor. Why's that?

Crypto projects have lifespans. If they don't deliver profit within that lifespan, destination crypto graveyard awaits them. Therefor, adjust your timeframe of investment to the lifespan of the crypto project. Believe me, that'll make it easier to take profit.

Wonder how to determine the timeframe of your investment? Here's a cheat sheet: 1️⃣ 3-6 months → hype → gambling → sell the pump 2️⃣ 1 year → utility → investing → sell the news 3️⃣ 3+ years → tech infrastructure → hodling → sell rewards Take profit accordingly.

Unfortunately, chances are you are too optimistic about your investment. You probably reason your investment is a long-term one, in reality most crypto projects are not. The sheer amount of people who locked liquidity in node projects that'll never ROI, proves that claim.

That's why, for short term and mid term investment, I use a fairly simple rule: Milk the investment before someone smarter kills the investment. If you feel this is bs, think again. 92% of crypto projects die after a year.

Imagine you've done your job and set the timeframe for your investment. Next steps await: ・ Set take profit targets. ・ Mark token unlocks ・ Monitor roadmap progression ・ Adjust to market conditions

Let's start with take profit targets. If you're afraid that you take profit too early, it's loss aversion talking. Take profits targets force you to deal with loss aversion, to quit bullshitting around and to take profit as planned. It's a hedge against loss aversion.

Now how to set take profit levels? I don’t care, you do you. If a x10 is a realistic target, go ahead. One thing tho, split take-profit targets and DCA out of your position: ・ 30% TP1 ・ 30% TP2 ・ 20% TP3 ・ 20% Moon/ Anti Fomo bag Don’t be over confident.

Set realistic goals. Not all your investments will do a x20 or x40, especially if the timeframe of investment is short. Although parabolic runs happen, the chance of timing your exit in such a way you’ll time the exact top is slim. TP target 1 should not be a x10 away.

To determine where to put my TP targets, I use a bit of TA. Don't worry, you don't have to be a TA god. Simply understanding how to identify resistance and support areas will get you on the road. Tip: watch this video to grasp the basics. youtube.com/watch?v=azB9Q_9MYsI

To illustrate that let's take $ROSE. I’d set my timeframe of investment at +/- 3 years, Ideally I'd use the weekly timeframe but history on price action is more accurate on the 3D timeframe. Blue lines indicate my TP targets. At these levels I'd take profit.

That being said.. My reasoning is based on the idea to target an average entry of around $0.075. Needless to say, due to current market conditions my average entry will probably be lower. Based on the actual average entry, I'd re-asses my TP targets.

Token unlocks are noteworthy events for your take profit plan as well. It is at these times, tokens are released to investors who, if they desire to make a profit, can sell their tokens and create sell pressure in the process of doing so.

Your job is to: ・ Find out when token unlocks happen ・ What the inflation rate is of the circulating supply ・ How much profit investors will make if they sell their position at the current price. Bundle this information and mark the unlock dates in your calendar.

Let's take $ROSE again. Last week’s token unlock must have been part of my take profit strategy for sure. Undoubtedly, this unlock is the most notable one this year because circulating supply is inflated from 3.5 billion in May to 4.2 at the end of June.

If I'd been in profit, it would've been a good idea to partially exit my position, prior to the token unlock. Especially in this market, token unlocks can create negative price action. Act on it. twitter.com/CryptoDamus411/status/1529752255984979969?s=20&t=X61d-sXOawIh06QsDRxAVA

Be aware, although token unlocks inflate supply, it doesn’t necessarily result in negative price action. In bull markets, demand can outweigh supply as illustrated by $ROSE in October last year. Know how to read the market at token unlock events.

Your last step is to monitor roadmap progression. Mayor releases, like mainnets simply can't be absent in your take-profit plan. Expect FOMO-driven price action by dumb money, who take a position too close to the date of the release. Their FOMO is your exit.

Why sell the release pump? People mistake the delivery of a tech feature for a critical success factor. In reality it's not. Getting people to use your tech and build dApps on your platform is. That's why blockchains have incentive programs, to attract developers.

Now you can listen to fanboys screaming "paper hands who sell the release-pump are NMGI".. I'd suggest you ignore them. After release, price often plummets because the "release" demand will dry up. You're not supporting your favourite football club. So take some profit.

In the case of $ROSE some major shipments are planned in 2022: ・ June - Smart contracts on Cipher mainnet ・ July - Interpara communication protocol ・ Q4 - Parcel paratime mainnet launch I'd be monitoring these, but I don't expect release pumps due to the bear market.

What I find more relevant to monitor during the bear, are adoption rates. A $235 million developer program to get web3 founders to build dApps on $ROSE must lead to more developer activity on the network. That's the relevant metric instead of the release of a product.

So how do you strategise your take-profit plan? ・ Lifespan of a crypto project determines investment timeframe ・ Set realistic take-profit targets ・ To hedge yourself against loss aversion ・ Monitor price action during token unlock events ・ Sell the release-pump

Now the boundary to execute your take-profit strategy exactly as planned is high, because loss aversion and confirmation bias will make you fall into old routines. That's why you need systems: To create new habits and learn how to silence the primitive part of your brain.

In a couple of days I'll share the last part of this "take-profit" series. I'm gonna share how systemised my take-profit strategy and how I used the same primitive part of my brain to deal with loss aversion, confirmation bias and emotions. That's it for now.