Something that's common knowledge today among us crypto peeps is how to invest in portions and ''cost average'' your way into mitigating the damage done to your net worth. Believe it or not, back in the olden days of Bitcoin many hodlers had no idea as investing and the markets were rather new to them. So very basically speaking, if 1 BTC is 100K and you have 10.000 Euro to invest you'll do so in portions by e.g. first investing 5.000 and if the price of BTC crashes to 90.000, you invest the second batch of 5.000. Now you will break even if Bitcoin recovers to 95.000 rather than all the way back to 100K.
But it amazes me how many people around me who are also into crypto and know about the ''dollar cost average'' strategy, fail to do the same with their crypto bags that make significant gains. I have seen people make a 200x on some junk meme coin, and then watch it all go down again because they didn't take a single cent out and were rugged by the bigger hodler. I know I'm being too generous with that ''bigger hodler'' phrase, most of that Solana trash are rugpulls waiting to happen but that's not the point.
The point is, and this works with actual useful cryptos as well, why not take profits out in the same portions that you used to invest in it? Let's forget the meme coin example, a few months ago one particular coin I have jumped like 40% in a day. I first sold the dust I had and observed closely. After it reached 55% I sold about 25% of my stack. It kept rising both that day and the next. I forgot at exactly how percent gains it peaked, but on the second green day I took out the remaining 25% I had, because the 50% that was now left was my ''moon bag''.
The third day it started to recover and I bought back the second batch of 25% and by the end of the day it actually crashed further down enough for me to feel comfortable enough to buy the remaining 25% back. Now my bag was fully recovered and I had a few hundred Euros in change. Now can you get unlucky and see it moon all the way to a 100x? Of course, but that's what the moon bag is for. You can't time it perfectly and will miss out on a lot of gains, but that's all part of the game.
That particular coin is now down 30% from the time I bought everything back, mostly due to the recent downwards market trend as it failed to recover along with Bitcoin. But am I bitter? Of course not because I had no way of knowing, and that's exactly why you ''profit gain average''.😉
