This analysis is for educational purposes only. The information here is not trading advice. Make your own trading decisions.
I have zoomed out on a 2-day time frame. Zooming out a little takes some of the noise out of the picture when considering selling.
A question a person should answer is: What type of trader am I? A Swing Trader is willing to take profits quicker than a Position Trader. A Position Trader is more inclined to stay with the trade as long as it meets the criteria to remain in the trade, such as staying above a key moving average. The successful trader finds a style or method, sticks with it, and then "rinses and repeats." At the least, this preserves emotional capital. An investor is in it for the long haul. This analysis is for Traders, not investors.
Next, it is helpful to think of cryptos or stocks like you would think of a runner. They can only go so far before needing a rest. Some are like sprinters; they move quickly and need pauses sooner than an endurance runner who can go for quite some time. These endurance stocks quietly move upward without a lot of excitement but are very consistent.
Stocks and cryptos form personalities. Seeing how the cryptos or stocks react at these moving averages is helpful. But, what is most intriguing is when the personality changes. For instance, crypto that likes to return to the 10-day and then take off again suddenly breaks below the 10-day. This action represents a personality change. At this point, I usually will take some or all of my profits. I can always set the alarm to get back into the trade. In my opinion, CRV needs a pause which could be drastic if the overall crypto market is pulling back. Additionally, to determine if I continue to stay in the trade, I would then consider how it reacts at the 10-day and how the overall market is acting.
Many times, crypto has several sprints before pulling back. The more sprints, the more likely they are to need time to rest before taking off again. CRV/USD has had three sprints. It could have a couple of sprints left before needing a pause, but I am likely to take some profits after three.
In the case of the crypto market with less well-known names, I am a Swing Trader. I see CRV/USD has had three sprints. At this stage, I am most likely going to take some profits.
What if it goes higher and I miss out on the profits? This is where FOMO rears its ugly head. As traders, we must discipline ourselves to avoid FOMO, which has many faces. The first is buying extended names, and the second is being afraid of missing out on future profits. Sometimes I will purposely take a profit early to train myself to let go of what happens after I exit, which is not my concern unless I plan to re-enter the trade at some point.
I have zoomed out on a 2-day time frame. Zooming out a little takes some of the noise out of the picture when considering selling.
A question a person should answer is: What type of trader am I? A Swing Trader is willing to take profits quicker than a Position Trader. A Position Trader is more inclined to stay with the trade as long as it meets the criteria to remain in the trade, such as staying above a key moving average. The successful trader finds a style or method, sticks with it, and then "rinses and repeats." At the least, this preserves emotional capital. An investor is in it for the long haul. This analysis is for Traders, not investors.
Next, it is helpful to think of cryptos or stocks like you would think of a runner. They can only go so far before needing a rest. Some are like sprinters; they move quickly and need pauses sooner than an endurance runner who can go for quite some time. These endurance stocks quietly move upward without a lot of excitement but are very consistent.
Stocks and cryptos form personalities. Seeing how the cryptos or stocks react at these moving averages is helpful. But, what is most intriguing is when the personality changes. For instance, crypto that likes to return to the 10-day and then take off again suddenly breaks below the 10-day. This action represents a personality change. At this point, I usually will take some or all of my profits. I can always set the alarm to get back into the trade. In my opinion, CRV needs a pause which could be drastic if the overall crypto market is pulling back. Additionally, to determine if I continue to stay in the trade, I would then consider how it reacts at the 10-day and how the overall market is acting.
Many times, crypto has several sprints before pulling back. The more sprints, the more likely they are to need time to rest before taking off again. CRV/USD has had three sprints. It could have a couple of sprints left before needing a pause, but I am likely to take some profits after three.
In the case of the crypto market with less well-known names, I am a Swing Trader. I see CRV/USD has had three sprints. At this stage, I am most likely going to take some profits.
What if it goes higher and I miss out on the profits? This is where FOMO rears its ugly head. As traders, we must discipline ourselves to avoid FOMO, which has many faces. The first is buying extended names, and the second is being afraid of missing out on future profits. Sometimes I will purposely take a profit early to train myself to let go of what happens after I exit, which is not my concern unless I plan to re-enter the trade at some point.