Investing in crypto market is one thing, however, getting to take profits at the best opportune time is another challenge. Most are the times we regret we should not have disposed the crypto bag earlier, but I think there might be a simple solution for this.
Elliot wave trade analysis is one that I have found to be a good solution for taking profits at certain times.
Once you invest your capital in the crypto market, It can be a good way to determine where and when to take the desired profits.
For reference purposes, lets take that you invested in XRP, the native coin for XRPL. During the 2017/2018 bull run, the asset happens to have moved from $0.005 mid March 2017, and skyrocketed to slightly above $3.5 by January 2018.
During the rally, it happened in three major phases that are outlined by the Elliot Wave.
The first wave of the rally saw the asset rally from $0.005 to around $0.05 in less than a month. At this stage, it would be pre-mature to take huge profits but depending with the investor, tenfold is a good return.
The second wave happened to have begun after a correction that took three weeks. During the second rally, the asset jumped from $0.05 to trade around $0.38$ in less than a month.
According to Elliot wave, which states a trend happens in three major rallies, the second was complete and waiting for the last one.
At that point, If one had invested $100 during the begging of the wave, the value would be around $7,600. Taking some profits would also depend with the investors but it ain’t premature.
The last wave took place after the instrument consolidation at around $0.38 for around six months. It took around four months for the asset to reach its peak at around $3.8. Hence, the $100 invested would be around $7,600.
With the knowledge that you are in the last wave in the weekly timeframe, you can take profit at any point depending with your intuition.
