THECRYPTO.WATCH – There are many investors who feel confused in determining profit taking and stop-loss actions. However, each action will have its own impact.
Discipline in crypto trading is key. However, it must be accompanied by an understanding of profit-taking action. These two things cannot be separated to get the maximum benefit from cryptocurrency.
Time for Profit Taking Action
Traders are faced with two important problems in determining the amount of profit, which are take profit or TP and stop loss. Both have an impact on losing a lot. Especially if the asset moves in a bearish direction.
However, on the other hand, investors also do not want to set a stop loss too close. It aims to minimize the risk of losing money due to removing assets too early. Therefore, every trader must be able to understand when the right time to do profit-taking action is.
Determining Price Action and RSI
Know the comparison of price action and relative strength index. These two things are the right indicators to know the entry and exit prices. The act of comparing the two prices will help traders find a profit picture.
Let’s say, you compare prices based on a BTC parable chart in a 4 hour timeframe. When it starts to enter a position after condition A, then the next peak is condition B.
So the RSI will make the price higher, which means that there is an increase in buying momentum and a sharp decline. As a result, it will push prices up. In condition B, it is a sign to take profit.
In condition C, which is marked by a retest of the resistance level. This is as a result of a sharp decline. Therefore, this condition becomes the right moment for a stop loss.
Fibonacci Level
Crypto assets are affected by bots and trading algorithms automatically. It is the asset market environment that drives prices to Fibonacci levels. These levels are formed from horizontal lines that will indicate possible support and resistance levels.
If it is in this position, then the price has the potential to reverse direction. Watch these Fibonacci levels for profit.
If you can understand the right profit-taking action , you will get profits.
