Learn to get the most out of your trades by using timing strategies
This is where we start to get complex. You want the best chance of getting the best returns? Well, math is your best friend. Here is how to put probability most on your side when buying a token! There are two ways of going about this. Firstly, you can just put your entire investment in after a large correction starts to show signs of a pullback. This is likely what you would want to do if using a higher gas fee network as gas fees will eat into multiple transactions. If using a less gas intensive network, you’re likely better off splitting up your investment into portions and doing some DCA. This also allows you to adjust your investment over time based on continuing token performance. Your first buy should be your largest to gain exposure.
TIMING YOUR EXIT
Cash out your initial investment once you hit a decent level of returns (10x-50x is typically my first cash out level) Let the rest ride for a while. You chose those projects because you saw something, and if you chose well your patience will be well worth it. If you ever get the almighty god candle and see the green dominating the chart, don’t sell immediately. Wait for an established downward trajectory, then profit after a positive correction. You may not profit right at the peak, but you wont profit near the bottom for sure!
WHEN TO CUT YOUR LOSSES
If you don’t get parabolic action immediately, don’t fret!! Some projects are sleepers. Evaluate every month or so for the following criteria:
- community activity
- leadership and development
- new plans or potential catalysts
Look for at least 2 out of 3 of these things before deciding to call it quits. If you don’t see 2 out of these 3, it may be time to start closing your position.
HOW TO EXIT A DOWN/DEAD POSITION
Now, let’s cover how to successfully exit a dying position with minimal loss, and even potentially recouping profits while minimizing risk! Do not exit entirely at once unless the situation calls for it. Do a risk evaluation. How confident are you that it will go to zero, as a percentage? Close out that percentage of your position. Leave the rest for now. It just may surprise you. Reevaluate every month or two and repeat. You want to close out incrementally rather than fully to still maintain exposure to any upward price swings, which are common among low market cap coins and stocks. Just wait for those pumps if possible. I hope this helps get you started in the exciting, competitive, and complex world of micro cap cryptocurrency investing.
Good luck!