The following profit-taking strategies can help crypto traders not only overcome their emotions through proper planning but also gain the confidence they need to make money, regardless of market conditions. However, to attain success, it is important to keep in mind that every strategy is highly individualized, so it must be flexible and market-driven.

1. Do not engage in Emotional Trading.

Emotions are often the cause of many bad trades. Bitcoin is more attractive to traders if it is $65,000 in November 2021 than if it is $35,000 in January 2022. It is common for crypto traders to see red on their portfolios today, which makes them wonder if they can even recover their money. Hopefully, if they stick around for quite a while they can definitely recover the money they spent.

A loss can be led to impulse decisions that have nothing to do with your strategy. Despite feeling as if everything is going wrong, it is crucial to remain calm. As a beginner, it can be a bit overwhelming, which can make it very tempting to react. However, developing sound trading psychology contributes significantly to the decision-making process of any trader.

It is common for short-term traders seeking fast returns to have a higher risk tolerance than long-term traders. To succeed in this, you need to make use of technical analysis since it plays an important role in managing risk and choosing the best entry and exit strategy relevant to you. Having a set entry and exit strategy reduces the risk of making irrational decisions due to emotions and prevents second-guessing. It is, therefore, an important component of your trading plan.

2. Bearish markets create the rich.

Take a look at today‘s market from the perspective of the top investors. It will be a delight for him/her to see the crypto price decline. How does that work？ It is because they are experienced in taking profits both up and down markets. Since most traders are unlikely to time the exact top or bottom, laddering in and out can help secure gains. Even if traders leave some money on the table, they won’t lose their capital since profits are taken.

Moreover, be prepared to sell on the way up and on the way down, and always remember the adage coined by Bernard Baruch, one of Americas wealthiest men for half a century: “I made my money selling too soon.” Yes, sometimes you should sell some assets rather than hold on to them when the market begins to decline.

3. Take out the initial investment first.

Some crypto traders may make a good decision to withdraw their initial investment immediately after the value of the crypto asset skyrocket despite the cry of crypto investors to HODL. Its generally a positive step, but be aware that it may unleash the “house money” effect.

The house money effect describes how traders will take on greater risk when reinvesting profit earned through trading than they would in savings or wages. It is common for people to separate trading income from other income, which can cause confusion in their mental accounting.

By taking your initial investment, you can save yourself the risk of over-risking. Once a trade reaches an initial price, traders should cash out half of its value. This helps to keep your greed under control, even after you take out an initial investment, you should set price targets to manage risk.

4. Importance of Take-Profit Orders

The decision to take profits is ultimately a personal one based on a traders personal risk profile, strategy, and goals. Here are some examples:

Price targets: Traders can sell a percentage when they double their initial investment, a second percentage when they triple, and so forth. Its not necessary to set these objectives in stone, but rather to give or take a zone and then fulfil them. Also, each asset a trader invests in may have its own set of guidelines.

By incorporating technical analysis, many investors enhance their profit-taking strategies. Another useful tool is the Average True Range (ATR) indicator, which gauges the volatility of the instrument being traded.

5. Diversify your trading portfolio

Staying on the profitable side with cryptocurrency trading requires portfolio diversification. It is common for successful crypto traders to mix higher-risk cryptos with blue chips such as Ethereum, Bitcoin, and other altcoins such as Binance Coin, Ripple, Terra, and so on. When an asset starts to outperform, the investor rebalances by taking profits to avoid overexposure to riskier positions. Some may even retain a small amount of capital if the particular coin continues to rise.

While investing in crypto can be a volatile journey, by diversifying your portfolio, you can create an asset allocation plan that reflects your level of comfort with risk and the potential gains you expect. Cryptocurrency investors can also consider stable coins, such as Tether, which are pegged to a fiat currency like the dollar, so they dont fluctuate as much as coins, altcoins, and tokens.

What is the right time to trade crypto during the day & week？

A trader looking to execute large buy and sell orders must identify times when liquidity is at its peak (the number of counterparties available for an exit or entry at any given time) and trading volume is at its peak. When it comes to novice traders or those looking to place smaller trades, liquidity is less of an issue.

Timing the execution of crypto trading can be a very challenging process, but generally, there are certain trends that seem to be prevalent in the market. Here is what the data says about when to trade crypto.

Best time of the day to trade cryptocurrency:

Crypto trading takes place all day long (no matter where you live), so timing your trades to a certain time of day may not be very wise. However, if you examine a few months worths of data, there are a few very general patterns that emerge.

When bitcoin prices were on the rise in 2017, they were attributed to the sunrise in Japan. However, Wall Street is now more intimately involved, so most of the action is happening in the west. A significant amount of recent data confirms that crypto trading is largely synchronized with US market hours, indicating that crypto investment is shifting westward. The early Asian sessions are so thin these days that those traders seem to be taking advantage of them.

U.S. stock market hours are when bitcoin spot volume tends to peak, particularly at the opening bell. The Coin Metrics chart shared with CoinDesk suggests that the correlation with U.S. trading hours has been evolving since the first quarter of 2022. In light of the data, it is likely to be beneficial to trade according to the US time zone.

Best time of the week to trade cryptocurrency:

Using the same data used to determine the best day of the week to buy crypto, Thursday appears to be the best day. There were dips on that day in six of the eight weeks. The best time to buy is Thursday morning if that trend continues (which is certainly not guaranteed). Mondays (five of eight saw a dip), Fridays and Saturdays (four of eight) are the second-and third-best days to buy.

Avoid trading on the weekends:

The U.S. equity market may be asleep on weekends, but the cryptocurrency market never sleeps. Due to its 24/7 availability, it is possible to trade every day of the week.

Crypto trader Cantering Clark, a pseudonymous market analyst, says the smart money is less active on the weekends. He added that a lot of liquidity providers (also known as market makers) and algorithmic trading bots are active during weekends. Thus, trading on the weekends is not advisable.

Additionally, legacy markets like forex are known for having thin weekends. Having this knowledge, banks would attempt to force movements on the market by pushing it around. Likewise, in crypto, the idea was for a long time that any weekend activity was ‘wrong’ and should be avoided. The expectation among traders is that the market will go down over the week if bitcoin rises on a weekend. But, as most experts say, dont rely on the weekend.

What is the Future of Cryptocurrency？

According to data from the last 12 years, Bitcoin fluctuates between uptrends and downtrends, but on a macro scale, its value is always increasing. Over time, Bitcoins price is bound to rise due to increasing adoption among institutions and retail investors. I anticipate that the market will become stronger over longer time periods (years, not months), given that the overall crypto market structurally follows Bitcoin. The prices we see today may therefore represent some of the best entry points into the market.

However, even with the best advice from an expert, you should only invest what you are prepared to lose and stick to more conventional investments for building wealth over the long term. Its best to keep your investments small and focus more on crypto trading as it also gives you the possibility of generating income even in a down market.

In addition, instead of learning how to navigate a cryptocurrency exchange to trade your digital assets, you can add crypto to your portfolio by adding it to the brokerage with which you already have a retirement or other traditional investment account.

Trade Crypto with A Trusted Platform

Trading Crypto is now easy when you choose AximTrade. Simply open trading account with AximTrade and take advantage of both the crypto and forex markets with the best trading conditions and lowest capital you can invest.

AximTrade gives you an edge with a wide array of 35+ cryptocurrencies to choose from, allowing you to diversify your portfolio. AximTrade allows crypto traders and advocates to deposit and withdraw using USDT(TRC20), USDT(ERC20), and BEP-20 from anywhere in the world in a matter of seconds. AximTrade takes 0% commissions for cryptocurrency withdrawals.

The spread and margin requirements for crypto trading with AximTrade are among the lowest comparing other trading platforms. Traders are also given access to a wide range of tools and trading instruments in order to execute their trades with an informed perspective. As a result, you will be able to generate impressive earnings and reduce the risks associated with the volatile nature of cryptocurrencies.

Original Article: Is This The Right Time For Crypto Trading | Crypto Crash

Disclaimer: This post is from Aximdaily and it is considered a marketing publication and does not constitute investment advice or research. Its content represents the general views of our editors and does not consider individual readers personal circumstances, investment experience, or current financial situation.