This post is also available in:
Português
Cryptocurrency trading can be a wonderful and horrible thing at the same time. One essential skill every trader should learn is how to scale in and out of crypto trades to better manage both risk and reward. You fall into hell when faced with losses, and float on air amongst the heavens when your alt coins have big rises. In both cases, you are a victim of emotions and likely lack the logic to stay balanced in your efforts to profit from the market’s simple moves. I can tell you that true profitability comes from grounding yourself not only as a trader but also as a person. Any fool can quickly make or lose large amounts of money in this space.
If you are wise and follow some of the guidelines, using your good logic and discipline, which I hope you will develop. The amounts of your future gains could very well be staggering indeed. The idea behind using TA is purely one of logic/balanced reasoning. Most try to use it to predict the future, but it teaches us to examine where we were, where we are, and where we can go. To succeed, it helps to strategically scale crypto trades both in and out. As a wise trader, remember that efficiently scaling in and out of crypto trades will greatly improve your risk management.
I will give you a window into how I scale in and out of positions with images below and the logic/tactics, like general moving men/resources to win battles. For us, these battles are simple: to capture profits and grow our Bitcoin army! (Replace Bitcoin with ETH, XRP, etc., for motivation/favorites.) When you scale trades in and out in crypto, you can often capture more profits.
Be a Two-headed Snake when you view the market.
“The skillful tactician may be likened to the shuai-jan. Now the shuai-jan is a snake that is found in the Ch’ang mountains. Strike at its head, and you will be attacked by its tail; strike at its tail, and you will be attacked by its head; strike at its middle, and you will be attacked by head and tail both.”
In trading, this is no different. It is ok to have an overall bias, such as my buy side always looking to hodl coins and build my positions for the future, as I believe we have much upside. Even with that, I will sell without thought and fiercely if needed in the blink of an eye. Show me a chart like the one below, and I can hold a negative position where I am net short, though generally by under 10/5% of net. Importantly, when you scale in and out of trades in crypto, you stay flexible and adapt to both bullish and bearish markets.
I always align my bias with the chart’s technicals, not with what I think or feel. The key is to be flexible with your buying/selling. If the chart says to sell, then sell. I could absorb the full downside move in many coins by trading in and out at support/resistance points, using patterns/fibs, and market cycles. The key is to be flexible and focus on being the shuai-Jan, always looking to take a BITE out of the market. A trader who learns to scale in and out of crypto trades well can stay nimble and minimize losses.
Stay focused and Goal-driven.
Our primary Goal in trading is simple: to PROFIT. Sure, we can believe we want any number of things from the market, but far too often, I have seen people get stuck in positions based on nothing more than an IDEA/DESIRE/WANT, etc. They take their eyes off the prize of the Goal to make/create profits in their trading/investing. The chart above shows what is there, nothing else. At the time, ETH was at the 1200-1400 level, and I was exiting/selling; the euphoria was deafening. “We are going to 2000/3000 easily! You are a fool to sell here, just HODL!” I heard many things but did not care…
I saw what the chart showed me and scaled out like I always do—sold above 1200; the 200% level is scaling out as it went to 1300-1400 bit by bit. Then we had a very fast drop to the 800, and I started buying back and scaling out again above 1200, repeating this over and over until I bought back in the 600-500 range, back to 900-1k again, scaling in and out. Compounding my profits, along with reducing possible losses all along the way. This systematic method of scaling in and out of crypto trades is key to managing risk and reward effectively.
The TA was there for the Resistance/Support levels, and I tuned in and increased my bank. As you will see in the video below, I am always focused on increasing my bank = THE PROFIT. In my opinion, too many people in crypto are dumbfounded and let good opportunities slip away all the time. With a clear understanding of TA and the Goal of profit, there is a great opportunity to grow far beyond the masses who walk around as if they should be riding the short bus and wearing a helmet to prevent injury. Therefore, regularly remembering to scale in and out of your crypto trades is fundamental for reaching your goals.
Scale In and Out of Crypto Trades Video Guide
Get the TA & Education you need so you can scale in and out Crypto trades
If you don’t know the score and have no idea how to plan a trade or even what TA =”Technical Analysis” is and how to use it to trade Bitcoin or other cryptocurrencies, it is time to invest in yourself and increase your market knowledge. There is a great deal of trading and learning how to navigate the often rough seas of the market. Some ways people do this include Telegram crypto signalsgroups or Educational services. As long as they are not scams, I recommend trying as many as possible. Getting a varied viewpoint and seeing what you like and what works for you is wise indeed. By learning to scale in and out of crypto trades, you can enhance your trading outcomes significantly.
Often, people are amazed by some of the trades I make, and to me, it is just simple logic: using the resources and clues the market gives me. I still have many years of knowledge. If you want to be the captain of your ship, then climb aboard! With time, you’ll discover that mastering how to scale in and out of your crypto trades is a true skill.
