Setting selling targets (limit orders)

DISCLAIMER:
My articles are for educational purposes only. They are not financial advice. Always do your own research.

First and foremost I'd like to thank my very first sponsor @AnonSunamun and dedicate this post to him. Happiness and great health to you!

As most of you who have been reading my articles know, I'm invested in several coins in my personal wallet. But I also can't watch my portfolio all the time. Yet the crypto asset class is moving all day, all night, 24/7. So what if a spike comes and I'm asleep? What if the market goes directly into a dip afterwards? What if I wake up only to see I've missed the top? That's why I'm setting selling targets on every crypto asset I own.

I'm working with Bitvavo as my exchange. While you can only sell immediately in their regular overview, there is an "Advanced" ("Geavanceerd" in Dutch) link at the top:

By clicking that link, you'll get a new window or tab in your browser, giving you access to the trading view. On the left hand side, you'll see the section "Sell":

It's here where you can proceed to sell your crypto assets using any of the order types.

Types of orders

Limit orders are orders that will only be processed once the price you've set is reached. So for example, if you set a limit order on Bitcoin for a price of $ 200 000, your set amount of Bitcoin will only be sold once the price actually reaches $200 000. This of course also means that the sale doesn't happen if the market cycle top comes in just below where you set your target, making you miss out on optimum profit all together.

A market order is an order where the sale is conducted as quickly as possible, at the current market price. This is handy if you want to take a quick profit near (what you estimate to be) an all time high, but can be risky if the price drops dramatically on the moment you confirm the order.

A stop-limit order is a sell order that can be performed, somewhat as a safeguard, if for example the price were to plummet, preventing you from loosing all gains. However, there are risks involved, since if you set your stop-limit too high, a flash crash could result in the stop-limit being activated, triggering the sale of the set amount, only to see prices rise again immediately afterwards, in which case you could only buy in again at a higher price. So in such a "shake-out" event, you might loose the prospect of higher gains if you're setting stop-limits too high.

My workflow

I never play with any money I can't afford to loose, so I only use limit-orders to take profit. I don't use stop-limit orders, nor do I do market orders. Some people might have other visions or opinions about this, but since I tend to take my profits rather early than late in the cycle (and my targets are quite conservative), I usually don't need them.

Identify your limit order targets

To do this, I always look back at historical data. I think Coingecko is a great site for this. Let's look at HOT (Holo Token) together:

This show us several key metrics, but the most important one is the All-Time High. In this specific case, at the last peak, HOT sold for € 0.02647468. Since this was also the very first peak ever for HOT and it has shown quite massive volatility, even for an altcoin, I'm going to be careful with my target here.

That's is why I've set my target to €0.022 (adjusted it yesterday, before it was at €0.01998), which is exactly the prior all time high (€0.026) reduced with the value of the lowest price since the last peak (€0.004). But I do not set it as €0.022, since price action sometimes has issues breaking towards a rounded number. So in this case, my price target was set at exactly € 0.02198.

Could HOT reach a higher price? Probably. But is it much harder to target that higher value? Absolutely. And I like to play it safe. It's important to realize I've acquired most of my HOT at it's lowest point since the peak, so this means selling at about €0.022 results in a 5.5X return on my investment. And by being somewhat conservative I'm also rather certain my target will be reached. We're all in this for the profit, right?

My current limit order prices

Let's go over my set limit orders to give you guys an insight on my targets here.

ADA:

• First target: 3.5 euro. Here I'm selling 25 ADA.

• Second target: 4 euro. Here I'm selling 25 ADA.

• Third target: 5 euro. Selling 20 ADA there.

• Following targets: 6,7 and 8 euro. Selling 10 ADA at each target.

BTC:

• Not selling. In it for the HODL :-)

HOT:

• Single target: €0.02198

VET:

• Single target: € 0.2196

I hope this helps you taking advantage of limit orders and taking profit with a better chance at succes. Thank you very much for reading and thanks again to my sponsor!

Have a magnificent day.

Brecht.

My other related articles:

https://read.cash/@BrechtRyckaert/get-started-with-crypto-a-how-to-guide-a5347b05

https://read.cash/@BrechtRyckaert/deciding-what-coins-or-tokens-to-invest-in-5eacb83e

https://read.cash/@BrechtRyckaert/my-2-different-wallets-892dd329