To trade coins with a stable mindset and control risks, you must master take profit and stop loss techniques. For stop loss, you can use the fixed proportion method (10% recommended for newbies), assess based on technical support levels, or time stop loss (exit if no progress in 24 hours); for take profit, the target price method, partial selling, and sentiment take profit (cash out promptly during market frenzy) are recommended. Specific execution needs to adjust based on market volatility, such as widening the stop loss range for MEME coins to 20%-30%, while flexibly controlling based on position size (5%-10% for heavy positions, relaxed for lighter positions). These methods can effectively prevent deep entrapment and profit loss, making them essential for every trader.
To stabilize your mindset while trading coins and avoid significant losses, mastering take profit and stop loss techniques is fundamental!
Here are some practical rules:
1. Stop Loss Rules: Protect your capital and admit losses in a timely manner.
Fixed Proportion Method: Stop loss based on the proportion of capital, for example, if losses reach 10%-20%, liquidate immediately (newbies are advised to use 10%, experienced traders can relax this a bit).
Technical Support Levels: Observe the candlestick chart; decisively stop loss when breaking important support levels (like moving averages, previous lows) to avoid larger declines.
Time Stop Loss: If the position has not shown any signs of increase after 24 hours, the direction may be wrong; exit in a timely manner.
2. Take Profit Rules: Take the gains and secure your profits.
Target Price Method: Set profit targets in advance (e.g., 20%-50% increase), and take profit immediately once achieved.
Partial Take Profit: After reaching the target price, sell half to lock in profits, and decide on the remaining half based on market trends.
Sentiment Take Profit: When people around you are wildly promoting a certain coin, it may be a signal of a peak; cash out quickly!
3. Dynamic Adjustment Rules
Based on Market Volatility: For highly volatile coins (like MEME coins), expand the stop loss range to 20%-30%, while stable coins should be controlled within 10%.
Combined with Position Management: Stop loss must be stricter when holding a heavy position (5%-10%), while it can be relaxed for lighter positions.
Topic: What kind of take profit and stop loss methods do you usually use? Have you ever suffered significant losses for not stopping loss/taking profit? Share your painful history in the comments!