When do you sell? - A Realist's Plan

It is not the buying of an investment that kills a man's wealth. It is the selling that does.

When it comes to investing, one of the biggest hurdle is our emotion. This is not helping when the volatility of the latest investment vehicle, cryptocurrency, is so high.

How then can you help yourself realize the more realistic profit?

Well, you have to know exactly why you are even invested in the first place.

Are you investing because you believe in the technology and the potential of its utility in the near future once is more developed.

Are you in it because you see the potential pump in the short term and would like to ride the wave?

Whatever your motivation, you have to set expectations.

These are the expectations you need to be clear of.

1. Willingness to lose your initial capital
   As you would have known, cryptocurrency, Bitcoin and Blockchain as a whole is a new phenomenon. There still exists many risks to it, eg. Regulations. Price can change overnight, so you have to be prepared to lose it all if you are holding for the longer term.

2. Stop loss when your trade goes against you
   This is especially true for those who are trying to ride the wave. Not all wave goes in your favor, just like stocks. Thus, you got to have a stop loss in mind to close a position that is not going your way.

3. Profit target if you are just riding the wave
   Short term traders should always know when to exit the wave and not let the wave take you on its trajectory. Why? Because waves crash and you want to know of a realistic target and get out before it does.

4. Timeline to review your investment if you are holding because you believe in the underlying technology
   Not all startups will grow to the scale that you believe they can get to. Similarly, not all blockchain projects will end successfully. As much hype as one project may be getting now, some of these projects may eventually get replaced by better projects. This is a the reality. Thus, it is always wise to have a clear strategy to review your holdings, so that you can exit positions that have been less than ideal and maybe reallocate to new or more promising ones.

At the end of the day, we are in it to earn something, not to be less off or worse, to lose it all.

Clarity of your expectations will help you protect your capital and investment.

Be safe as always and may 2018 be an eventful year for all of us!