The Zig Forums Guide To Taking Profit

Taking profits is good. In this thread I'll show you how to do it and why.

WHY?

Profit taking lets you remove the emotions from trading. Anyone who was around for 2017 knows this. It's easy to look at the BTC chart and think "if only I'd bought the bottom and sold the top." In reality, very few did. The vast majority of traders bought and sold sporadically. They didn't set any concrete goals (other than "make it" or "pay off that mortgage”) and reacted emotionally when their portfolio went up and down. This is why you hear so many stories of anons losing everything or breaking even and so few stories of people becoming crypto millionaires.

Profit taking acts as a hedge against this. This happens for two reasons:
1) Rewards for personal milestones. If you just sit there watching your portfolio blow up, you're going to get greedy or fearful based on how the market's doing each day. If you take profits at pre-decided intervals, you'll have smaller cash out events to look forward to and tide you over before the big one.
2) Risk management. With a good profit taking plan, you'll minimize or eliminate losses by retracting your initial investment before your first 10x, and make sure you have at least doubled or quadrupled your liquid gains in the event that you completely fuck up timing a market peak.

In the next post, I’ll explain how to take profits the right way.

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HOW?

People have varying philosophies on this, but I think there really is one best way.

It's called the Zig Forums Success Algorithm:
** Take out 8% of your entire portfolio each time it doubles. **

To illustrate how this works, let's say you put in an initial deposit of $10,000.

After your first 2x ($20,000) you'd take out $2,000.
After your second 2x ($36,000) you'd take out $3,000.
After your third 2x ($66,000) you'd take out $5,000.
After your fourth 2x ($122,000) you'd take out $10,000.
After your fifth 2x ($224,000), you'd take out $18,000.

(Note that I'm rounding all numbers above to the nearest thousand - you should be doing this too, psychological numbers makes rewards feel more tangible and you'll never be timing the market at 100% exact intervals anyway.)

So now, assuming you're lucky enough to have made five 2xes in a row (which is not unimaginable in a GBR), you've got $38,000 in the bank and $206,000 in crypto.
That means in the absolute worst case scenario (LINK goes to zero), you've tripled your money.
In the "best" case scenario, assuming you decide you want to pull out now, you've made just ~25% less after tax than you would have if you didn't take profits.

Along the way, you’ll have made sensible liquidations at each 2x event:

- one fifth of your initial deposit
- half of your initial deposit
- 100% of your initial deposit
- 2x profit
- ~3x profit

Another nice thing about this method is that it scales. It works equally well if you’re investing $100 or $100,000.
Plus the post-tax loss (vs. if you had never taken profits) scales up reasonably with 2x events: if you chicken out and withdrawal everything after a 10x, you'll have only made ~10% less than if you hadn’t taken profits. Whereas if you’re lucky enough to experience seven 2xes, you’ll have made ~35% less - but you will have more than 50xed your post-tax earnings, so who cares?

I'll be sticking around for a bit to take questions and give advice. Good luck anons.

Thoughtful and informative thread, OP. I just have one problem: I have this rare hereditary condition where I am absolutely never ever ever fucking selling.

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epigggg :DDDD

are you cryptozyzz?
anyways good thread.

You can do even better than this.
You can take the profits virtually without cashing out if all you want is to feel good.
Each time a new milestone is reached you go back to your bank to take a new loan to invest in something else to diversify yourself.
This way you keep your life changing investment and can feel good about your new invested money with the loans you took now that you have enough money to cover them.
It's also a way to use your link stack as a virtual collateral because the bank doesn't know about it and can't take it away from you, but you don't feel any stress when taking more debt to reinvest because it's only a small fraction of your money.
Of course this loaned money has to be reinvested in different assets with a higher positive return probability a less risks than cryptos.

i'm going to follow your advice user. i lost $500k in 2017

Kek, based ranjeesh

your link isn't a good cover, it can dump 5$ any day if bitcoin decides to nuke 2k, what will you do then? and how will you make sure you have enough money to cover the loans? you will have to put stop losses at a decent point to be able to withdraw the money to cover your loans. which means your link isn't necessarily safe from being sold in your method.

That's why I said the bank doesn't know about my stack.
I got the loan based on my normal income without crypto.
I can repay it by working if I have to.
Investing it in less dangerous assets reduces the risk of losing everything with a bit of wealth management knowledge.
It's a form of margin trading when you use a margin to diversify yourself in less risky assets, but you don't risk getting your assets taken as a collateral.
In my case I use my silver holdings as my virtual collateral and they can cover the complete loan, because I didn't take out an insane loan, just a healthy amount to keep my mind focused on investing.
I can repay the loan with my Link stack even if it goes down to $0.3.

Obviously you should wait a bit if you just bought your Link stack.
This is more like a long term investment strategy.
You should not try to virtually cash out after a few months of holding.
You need to be patient.

fuck you OP, im holding RSR till the real moon. im up so much because i havent been taking profits. kys faggot.

The only limitation of this method is the amount you can get loaned which reduces it to smaller sums of money compared to cashing out millions.
But it should delay your need to cash out meaningless amounts that you can earn by working for a few years, while also reducing your dependency on your Link stack because you hold something else with some value you got as a consequence of holding it.

This is great advice. Thank you OP.

good thread

>Each time a new milestone is reached you go back to your bank to take a new loan to invest in something else to diversify yourself.
This is called over-leveraging yourself and is basically the opposite of profit taking.
I'm 50/50 LINK/RSR and am using this method. I didn't use this method in 2017 and just watched my alts bleed like everyone else.
You're up on paper. That lasts until it doesn't.

Good thread op. Lots of really good info here.

Luckily for me I fall on the sociopath spectrum and have no real emotional connection to money or finances. It's just a game essentially, and I like beating people at stuff

Good advice, thanks

This on the other hand seems like fucking terrible advice.

What if you're really bad and the most ROI you get is 1.1-1.5x?

I'm confused by what you're asking here. You mean like if your ROI after taking profit with this method is 1.1-1.5x?
One way this could happen would be if you make a 9-10x but then the market crashes there and you just watch your portfolio go down to zero.
The thing is that yeah, you won't make a great ROI in that case. But you wouldn't have done so if you DIDN'T take profit either, plus you would have lost money.

Based. What do you think of pic related? Good advice or bullshit?

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Intuitively this seems correct to me. Like if you look at a log graph of BTC and subjectively compare to market sentiment at that time, it more or less "seems" right.
The thing is that I remember people who had been around in 2013 making these types of predictions in 2017 too. But no one predicted "the majority of the growth will take place in Nov-Dec, and the market will quickly collapse in early January". Instead people were posting "BTC Christmas discount!" and "just wait until Wall St traders pump our stocks with their bonus!" And no one could quite tell that the peak was the peak, because at that point we were used to their portfolio losing 20-30% value overnight only to hit another ATH within days.
So even if this is true, it's true in a very general sense, and you should still be taking profit.

Your plan seems good but what if someone is a bad investor who rarely makes a 2x in general?

you will not profit from rsr

This plan shifts from helping hedge against losses to locking in profit after the third 2x or so. It's perfectly suited to both good AND bad investors. I'll illustrate this with two examples.
Example #1: Say you put in $10,000 and your portfolio does two 2xes. If you cash out ASAP, your post-tax difference is about 5% less than if you hadn't taken profit. That's basically nothing. If you don't cash out and Sergey pulls a Bitconnect, well, at least you cashed out $5,000, so you only lost half your money.
Example #2: Let's say you put that $10,000 into some shitcoin that turns out to be the next Ripple. Let's say, like Ripple, it does about ten 2xes from the time you buy it to the time the market peaks. By the tenth 10x you've cashed out $825,000 before tax. Whatever your thoughts are on "making it," that is a fuckton of money compared to your initial investment.
Here's where things get interesting: If you time the market PERFECTLY and cash out the rest now, you've made $3,255,210 after tax. That's theoretically 50% less than you would have made before taking profit. But this is purely theoretical because NO ONE actually made a 1024x on Ripple - look at the graph and tell me you could have timed that perfectly. Keep this in mind any time someone tells you they're "holding till the real moon" and "up so much" like .
The lesson here is that whether you suck at investing or great at it, taking profits will help you.

taking profit is the biggest fucking meme. it’s a great way to not be poor and it’s a great way to never be rich.
the only acceptable reasons for taking profit is if you think a correction is coming or there’s another opportunity you want to invest in, or if you’re such a weakminded weakhanded faggot that it’s literally causing you to lose sleep.
you should never take profit because “i’m up 100x!!” that’s a sunk cost fallacy. the market doesn’t give a shit how much you’re up it’s going to move how it wants. the only thing to consider is if you think it goes up or down from this point in time.
if you’re focused on how much you’re Up it means you probably don’t understand your investment and shouldn’t have invested in the first place.
AMZN’s road to 3k was paved with bodies of people who took their 2x and left because they didn’t understand what it was. same with eth, btc, etc.
all life is making bets and the size of your bet should correlate with your conviction. if you believe in your investment you shouldn’t be reducing the size of your bet. don’t take profit until it’s achieved what you think it should.

Good thread with valuable insights, but next time post this together with some soft transsexual pornography (as per the culture of the community) please

jesus christ no. it is not the culture of the community, its the culture of some faggot discord.

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>cashing out into fiat

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This so much, I first bought btc under $50, sold after a 4X and moved on.
I WOULD BE A FUCKING MULTI-MILLIONAIRE!!!!!!

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>le emotional trader meme
no matter what you do you're trading based on emotions.
maybe you've created a nice charming narrative that soothes your emotions, but it's still emotions.

lol you are right but the new people who are coming in off this DeFi rush and didn't experience 2017 will not listen. And frankly, I don't blame then. Its just one of those lessons you have to learn the hard way. I could have made out with 100k or at least still have it but when you get the rush, you dont let go. At the end of the day I'm grateful for the experience(maybe I'd be more bitter if I'd actually lost money).

Back in the game 3 years later and looking to win this time. To all my 4 year friends in the same boat....good luck gentlemen.

>my imaginary coins will replace fiat one day just you wait!