🎯How to Take Profits in a Bull Market?

Hello Lobsters! Welcome back to Lobster Academy! As you’ve seen, Bitcoin has climbed up to its ATH 🥳! But hold off on planning your next few months' purchases until you've established a solid exit strategy!

It's easy to buy low, but hard to sell when an asset you own has just pushed the price up. That's why you need an exit strategy to avoid being influenced by your emotions. As we say, "Nobody ever got poor taking a profit."

In today’s article, we will show you different strategies to take profits during the bull market. Ready? Let’s dive in!

Let’s start with the meaning of take profits. In crypto, taking profits means that you’ll swap your cryptos for stablecoins to not be exposed to the market’s volatility. On a centralized exchange, you can also set a “Take Profit” order that will sell your crypto when the price reaches this stage. Got it? Let’s move on.

Why you need a solid exit strategy in Bull Markets 🚪

So you've bought the lows and are now in profit? Well done! But do you have a proper take-profit strategy, or are you just riding it out to see what happens? If it’s the latter, let me tell you that is NOT the right way.

Without a strategy, you might ride all the way down in a bear market and watch all your profit disappear.

To help you manage this bull run in the best way, the Lobster team will show you different strategies to take profits.

Remember, a strategy is only effective if it's respected. It's tempting to think, "What if it goes higher?", but that kind of thinking could cost you. It is impossible to time the top of the market.

The different strategies 🧾

We’ll start by saying that there is no perfect strategy; every strategy depends on your investor profile and your objectives. Some will be glad to have 50% returns and others won't sell until 10x. The important aspect is to have a strategy that corresponds to your needs. Now, let’s see those strategies!

Have a plan based on asset objectives 🎯

This is a plan where you establish your take profit strategy based on the returns that you want to have. For example, you can say, “I’m happy when my position has increased by 50%.” At this stage, without hesitation, you take profit. Don’t let FOMO take over, as that is the best way to watch your gains disappear. We advise you to write your targets on a sheet of paper and hang it on the wall so you always have your objectives in front of you!

DCA out 📤

As you may know, DCA (Dollar-Cost Averaging) is a strategy where you buy a fixed amount over a certain period. For example, every Monday, you might buy $50 worth of Bitcoin. This strategy helps smooth out the purchase price across multiple small entry points.

In the same way you DCA in, you can DCA out! You can establish that each week you sell a fixed percentage of your portfolio. This will give you a good average selling point and keep you exposed longer to the market.

Sell your position after a significant price increase 📈

In the crypto market, it is not unusual to see a surge of 50% in a day. Less experienced investors may see this as an opportunity to hold their crypto a little longer. However, it's wiser to sell after such an increase, even a small part. It could go higher, but when taking profits, you never know for sure. If it’s going down, you can buy cheaper, and if it still goes up, you’re still exposed to the market.

Keep a moonbag 🌕

Taking profit is challenging because you always think “It could go higher”—that's a psychological bias we all have. To mitigate this bias, I personally always keep a moonbag after taking profit. A moonbag is a small part of your investment that you leave in the market after taking profits. This can be anywhere between 5 and 15% of your total profits that you'll still be exposed to the market with. If the token dumps, you’ll have secured profits and only lost your moonbag. If the token pumps, you’re still in the game to take new profits! Just remember, even your moonbag needs an exit strategy.

Alright, Lobsters, that wraps up today’s deep dive into creating effective exit strategies during a bull market. Watching your investments grow can be exciting but always keep your head cold. By establishing a disciplined approach to taking profits, you can secure your gains and protect your portfolio from the inevitable market swings. Remember, the profits on your screen are just numbers until you make them real by pressing the sell button. Don't let FOMO drive your decisions, and always be prepared for different market scenarios.

Continue your journey with our articles here at Lobster Academy. Keep learning, gain experience, and remember, WAGMI!

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