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Why take crypto profits when you can just set a stop order?

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2

In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?

For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?

cryptocurrency profitability

share|improve this question

asked 4 hours ago

Nick SolonkoNick Solonko

111

New contributor

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• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
  
  – Bob Baerker
  4 hours ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  Why ever take any profit?
  
  – quid
  4 hours ago
  

  
  
  
  

add a comment | 

2

In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?

For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?

cryptocurrency profitability

share|improve this question

asked 4 hours ago

Nick SolonkoNick Solonko

111

New contributor

Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  Use a trailing stop order though there's no guarantee that you'll get a fill at that price if it's a very volatile issue.
  
  – Bob Baerker
  4 hours ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  Why ever take any profit?
  
  – quid
  4 hours ago
  

  
  
  
  

add a comment | 

In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures profitability (if a coin goes up) but results in the investor missing the peak. I was wondering, could stop orders be better?

For example, if each time a coin goes up 10%, an investor sets a stop order at 90-95% of the present value. That way, there is no sale if it keeps going up, and if it plummets, it ensures that you sell it close to the peak (90-95% of it). I never read about something like this online. What are some flaws with this strategy / thinking?

cryptocurrency profitability

share|improve this question

asked 4 hours ago

Nick SolonkoNick Solonko

111

New contributor

Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

share|improve this question

asked 4 hours ago

Nick SolonkoNick Solonko

111

New contributor

Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

share|improve this question

asked 4 hours ago

Nick SolonkoNick Solonko

111

New contributor

Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

asked 4 hours ago

Nick SolonkoNick Solonko

111

New contributor

Nick Solonko is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

asked 4 hours ago

Nick SolonkoNick Solonko

111

1 Answer
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The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.

share|improve this answer

edited 4 hours ago

answered 4 hours ago

Hart COHart CO

36k686103

add a comment | 

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4

The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.

share|improve this answer

edited 4 hours ago

answered 4 hours ago

Hart COHart CO

36k686103

add a comment | 

4

The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.

share|improve this answer

edited 4 hours ago

answered 4 hours ago

Hart COHart CO

36k686103

add a comment | 

The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.

share|improve this answer

edited 4 hours ago

answered 4 hours ago

Hart COHart CO

36k686103

share|improve this answer

edited 4 hours ago

answered 4 hours ago

Hart COHart CO

36k686103

answered 4 hours ago

Hart COHart CO

36k686103

answered 4 hours ago

Hart COHart CO

36k686103