Transcription
Last cycle, I watched over a million dollars vanish from my crypto portfolio in less than a week. This time, I'm locking in my profits before the crash. And by the end of this video, you'll know exactly how to do the same.
Because here's the harsh truth about crypto. Making money is easy, but keeping it is even harder. In crypto, it's much easier to buy than it is to sell. We all know the feeling, that rush of euphoria when it comes to buying an altcoin. But for some reason, when it comes to selling, it just feels so much more difficult. But you need to know when to sell at the right time.
Because every single cycle, the crashes can be devastating. For example, Bitcoin plunged 84% in 2018, then another 77% in 2022. But despite these lessons, most investors keep making the same mistakes cycle after cycle. I know because I was one of them. In 2021, I made over seven figures and I watched the majority of my profits evaporate. Despite making good money during the surge, I ended up roundtpping the majority of my gains.
After that painful lesson, I built a five-step foolproof plan to locking in my crypto gains. And by the end of this video, you'll be equipped with the strategy to crush it this cycle.
Step one, define your freedom number. Set a realistic goal. Instead of picking a crazy target like 20x or 50x, set something that you can actually adhere to. For some people, it might be a 5x. And for others that are more conservative, you might be happy with a 2 or a 3x. Nothing is wrong in crypto. It's all based on your personal goals. What you need to accept is that the higher your target, the more risk you're going to need to take on to get to that target. So really think about what your number is, what you would realistically be satisfied with this cycle. And that's the first step to achieving your profit goals this cycle. Make sure you stay until the end because at the end of this video, I'm going to give you a simple 2-minute strategy which actually saved me hundreds of thousands of dollars during the last crypto crash.
Now, time for step two, and this one is extremely important because it's going to help us spot when the market is getting overheated. I call this the traffic light dashboard. Instead of looking at dozens of charts and trying to work out whether the market is frothy or not, there is a very simple website that clearly lays out whether the market is in peak territory or whether we are far away from Bitcoin cycle peak. It gives you a simple color-coded bar in order for you to work out where the market is currently sitting. This can help you frame your ability to take on risk during this period in the market. These are the three signals on this dashboard that matter the most. One, the PI cycle top indicator. This is historically accurate within days of Bitcoin's peak. Two, the MVRV Zcore. When it climbs above 7, this is a historical indicator that Bitcoin is dangerously overpriced. And three, funding rates. When retail piles into leverage, this is a typical sign that the market is starting to get overheated and that you should be cautious. If one of these indicators is red, I'm starting to get a bit cautious. If two of these indicators are red, I'm getting really cautious. And if all three indicators are red, I'm looking at going almost completely risk off. Let's take a look at where we currently sit right now. Right now, you can see that Bitcoin is firmly in the hold territory. None of the traditional cycle top indicators have hit yet this cycle. Now, there is one caveat and that's the fact that the institutionalization of Bitcoin and the new ETFs which have brought in an entire new cohort into crypto have slightly changed the way that price action works in the market. So, I don't think you can use this framework in isolation. That's why I have the five steps for you today to use together. But it definitely is a nice indicator to get a gauge for whether the market is risk on or risk off.
By the way, if you want to know when I'm going risk off or risk on in real time because sometimes it's difficult to make an urgent YouTube video, I'll leave a link in the description to my free Telegram group. This is a great place for me to share ad hoc market thoughts. For example, if I wake up and I see some of these indicators hitting, it's much easier for me to just drop a voice message in that chat as opposed to making a whole YouTube video. So, if you do want an up-to-date stream of consciousness regarding the market, first link in the description below to join my free Telegram group. I'd love to see you in there.
Step three, automate your profit ladder. If selling depends on your own willpower, you've already lost. You need a system which ensures that you're taking profits over time. It's obviously great to have an idea of when a cycle top is hitting looking at the previous step that I explained. However, it's still good practice to incrementally take profits throughout the cycle when the markets are rallying because that enables you to a have dry powder to take advantage of dips when they come and b have the mental fortitude not to panic if the market begins a correction. Implementing a consistent incremental take-profit strategy has been one of the highest leveraged things that I have done in my crypto career. And since I started doing this, I've become a much less emotional trader and investor. And I've had the mental fortitude to take advantage of big opportunities in the market. Just the other week, Bitcoin crashed to $75,000. And I publicly made my biggest Bitcoin buys of all time. I was only able to do that on that day when everyone else was panicking because I had dry powder set aside. Now, I personally aim to keep around 20 to 30% of my portfolio in stables at all times as a minimum. Right now, I'm slightly more aggressive, closer to 50%. But for the average person, I suggest around 20%, but the only way to even get to 20 to 30% is through taking advantages of pumps.
All right, so this is how I implement an incremental take-profit system for every coin in my portfolio. You want to do this for every specific coin because every specific coin has its own risk parameters. So, I'll give you an example. For Bitcoin, because Bitcoin is a safer asset and because it's less volatile, you want to pick lower increments. What do I mean by this? Well, perhaps every time Bitcoin goes up 20%, you take 20% of your stack off the table. Bitcoin is unlikely to pull 1, 2, 300% moves in a short amount of time. So, your take-profit increments will be lower. On Solana, for example, it's slightly more volatile than Bitcoin and has more upside. So instead of incrementally taking profits every time it moves 20%, you might take profits every time it moves 50%. And as you move down the risk curve and you get into more risky assets, let's say hyperliquid, maybe every time it does a 60% move, you'll take 20 or 30% profits. And then as you go down the risk curve, you might get to a really risky meme coin where every time it does a 2x, you take your initials out. Now, that is a framework I really like for risky coins. I usually like to take at least half my profits off the table as soon as it hits a 2x because then I'm essentially writing risk-free. And this is a powerful psychological tool. So, you can actually hold on to that position over time without feeling too much guilt. And at least if it ends up roundtpping, you've ended up locking some profits. So what I would do is before I would buy any altcoin in the market, I define when I'm taking profits on that altcoin. Now alongside a percentage incremental system, you can also put that in tandem with technicals on the chart. So have an incremental system that is based on percentages and also have a system for that same coin based on technical levels. And if you can do both of these things, I'd be shocked if you didn't take profits during the next big altcoin pump. And the next time there's a crash in the market, you'll actually have the necessary dry powder to either buy in or at least sit on the sidelines without panicking because you've balanced your risk waiting with cash.
Now you've actually taken some profits, right? But should you keep all your money in stable coin? Should you take money into USDT? Or should you look at parking your money somewhere to earn yield or put your altcoin profits into Bitcoin so you can continue to stack SATs? Well, this is a rough framework that I adhere to depending on the market conditions in order to make sure that I'm not only taking profits into stables, but I am also earning money on my stables or at least earning more Bitcoin. 40% can go into US Treasury yields. So, this is like having fiat; it's not in crypto, which I think is a powerful thing because I found that when I keep too many stable coins in crypto, I have this propensity to end up overtrading it. It's just like being in a casino, right? If you have a big stack of chips that you've made, if it's still in chips, it's very easy to go and gamble those chips again. Whereas, if you go to the cashier and you cash them out for physical cash, there's more of a barrier to get them back into chips. And at least it causes you to second guess whether you're making the right decision or not. And often during times of FOMO in the market, you don't end up making the right decision. You end up making emotional decisions. And that's exactly what this video is trying to help you avoid. Then with my next 30%, I'll look at ways to earn money on my stable coins. So instead of just keeping them in my wallet, you can look for active ways to earn yield. There are many different ways. There are DeFi pools, audited DeFi pools where you can diversify to earn some yield. There are other private markets that enable you to earn money on stable coins. As long as you're diversified and it's not all on one ledger and it's not all with one protocol, I think sometimes you can justify the risk-reward. I also understand those that don't want to take on the smart contract risk just for 6 to 8% on their stable coins. And I think that's totally fine. It depends on how much money you have. If you only have, let's say, a $5 to $10,000 portfolio, maybe it's not even worth the risk. But as you start to make more money, inflation becomes more of a risk. So looking at ways to earn yield is certainly something that's attractive to me. And then the other 30% I just keep in flat stables. This is just money that I keep liquid and when I want an opportunity, I could take advantage of that opportunity. Now, out of this 30%, I recommend you put at least half into cold storage. That eradicates part of the issue that I discussed before about gambling your money. And then I'll keep some on exchanges, right? Because I still need liquidity for limit orders to hit. One strategy that I use in the market is I set stink bids across the market. So, I want to catch any crazy wicks that happen to the downside on illiquid markets, especially to see if I can get some cheeky orders filled. That's why at all times I need at least a little bit of stables in my exchanges just to make sure I have exposure. But obviously, there's this rule in crypto, not your keys, not your coins. So, you also have to make sure you don't have too much that it becomes a major security risk. So, it's just about finding the balance.
All right, now for step five, and this one is critically important. It's beating your own psychology. Most people don't actually lose to the markets, they lose the mental game. So, one element is mastering the market, and the other element is mastering your mind. Here's a 2-minute strategy that I implement every single week just to make sure that I reset my mind and I'm cognizant of the decisions that I'm making in the market. So, every single Sunday ahead of a big week in crypto, I do a little bit of a reflection exercise. The first thing I do is I take some deep breaths. I want to calm down after a hectic week and I want to make sure I'm in a really relaxed state before making financial decisions. I also suggest, by the way, as a general rule, before you buy any altcoin, you actually go outside, you do some breath work, you come back, and you work out whether you actually want to buy that altcoin because a lot of people buy stuff on a whim and then they don't even know why they're buying, right? You always need a plan; your full plan before buying an altcoin. That's where a lot of people end up screwing up. Uh so the first thing I do before I do this 2 minutes is I sit down. I take some deep breaths. The second thing you want to write down based on your own altcoins is your exact take-profit plan. So what I'll do is every Sunday I'll just read and I will just review that plan while I'm looking at my overall portfolio and I'll make sure that I'm actually sticking to it throughout the next week. The third thing I do and this is extremely important is I update my limit orders. So, what I'll do on a Sunday is I'll spend a minute going through all my exchanges, going through the DEXs, and I'll just make sure all my limit orders are set across my altcoins. It usually only takes a couple of minutes just to make sure they're still set, but obviously the initial configuration can take a little bit longer than a couple minutes. You just want to make sure you're keeping an eye on that. And I like to do all of this at once, once a week. So, I make sure that I have that mental reset ahead of the next week. And then the fourth thing that I do, this is very important, is I log my emotions. You can do this on a ChatGPT chat. You can write it down if you want. I like ChatGPT because I like sending voice memos and I'll basically just have a journal. It's actually my trading journal. I reflect on the good trades of that week, the bad trades of that week, and my goals for the next week. It's quite helpful in terms of making me understand my own emotions, and it will give feedback based on the prompts that I give it. Implementing that one strategy actually recently saved me over $500,000. So, just 2 minutes saved me half a million dollars because it was a Sunday, I think about a month and a half ago. This was just before the Bitcoin crash and um it's when the market was still looking fairly solid and I set my limit orders for the next week. I actually realized a few weren't set. I fixed them and then those profit levels actually hit and then the market ended up crashing a week later. And if I hadn't done that routine on that Sunday, I wouldn't have grounded my portfolio to have the necessary capital to buy into the next dip. So, so you'll actually find times where this saves your portfolio.
All right, now let's do a recap of the video. Number one, set your freedom number. Number two, track the color-coded traffic light signals. Number three, automate your take profits with an incremental TP system. Number four, strategically place your profits into productive buckets and diversify your profit taking. Number five, use the 2-minute rule to avoid emotional mistakes. These are the five steps that you can use to make sure you lock in your crypto gains. You can screenshot the blueprint immediately and start executing right now. Subscribe if you found this video valuable. Share it with a friend to help someone else out in the crazy market of crypto. And remember that securing your gains isn't just luck, it's strategy. I'm also going to leave a link in the description to my free Telegram if you want real-time thoughts on the market in case we hit a major TP zone for myself or a major buy zone. I'll see you in the next video. As always, have a lovely rest of your day. Peace out.