thetradingparrot

Hey hodler! do you have an exit plan? here's mine

Added 2021-05-05 14:53:56 +0000 UTC

Historically May as been a pretty green month but the fact is that the months after tend to be pretty bad.

I have a separated sub account where I'm hodling some tokens for the long term.

Even though my intention is to hold them for the long term I still feel tempted to take a hybrid approach: bots for managing my hodling. I'd like the bots to sell when there's a high chance the price will come down. Then I can decide to re enter or just move on to something else.

I'm planning to exit and enter the market using some very basic bots.

The main idea is to sell most of my holding at levels of RSI that historically each token has shown to use to correct big repeatedly.

This is the template of the plan:

Pick a large holding, example: EGLD (I'm not going to do it with BTC as it's not respecting RSI and also because after alt coin season money should go back to BTC so I do not want to get rid of it too early before we complete the full bull run of 100 to 300K stock to flow).
Create a new DCA bot
Select SHORT
Select QUOTE
BO and SO in % of the token we are shorting, in this case EGLD
I personally will sell 50% at BO price, and two SO of 25% each (you can customise this to your needs)
Limit order
Deal start condition RSI7 4 hour > a value. To be able to find a sensible value to exit not-too-early and not-too-late we need to look at the daily chart EGLD and add the RSI-7 to it. Check the chart below: 79 seems to be a good exit point. We are using SO with a deviation of 2% that should provide good opportunity to sell another 50% at higher prices if it decides to pump further up from RSI7 > 79.
Take profit 99%. I will decide on case by case basis if I want to re buy when it goes cheaper or if I will just cancel the deal which will result in not buying it back. Some alts I'm ok with selling them and waiting past July to re buy if they are at a good price and present still strong fundamentals. If you want to guarantee re entering, you can set the TP to a level that you believe will be the bottom (not an easy one I know!).
I check the chart and take note of the ATH of the token. Place this value in the "Minimum price to open deal" field. I do not want to sell below ATH in most cases of the holdings I have. You can be greedy and pick a value above ATH or below for conservatives. As long as you are not selling at loss, or avg entry price, that should be fine. Profit is profit!

Here's a bot example for EGLD, do not copy the min price to start deal or the RSI7. As mentioned this value is based on the historical values of the token, it should not be generalised for all coins.

https://3commas.io/bots/4043288/shared_show?secret=a380d540c0

What can go as "unplanned"?

Many things. We might sell and it might not stop going up for days. You will miss out better prices to sell. A token can get to RSI7 closer to even 100. It's not as frequent as between 79 and 82 on the daily. For me that's a good compromise and exit plan.

You might sell the BO and not the SO, and still end up holding 50% of the coin.

You might go too high on the RSI level you picked which makes it less likely to trigger the sell and then if the coin reverses before that level in practice the bot wouldn't do anything and you will still end up holding the token and now, at a lower price.

When do you plan to re buy or let the deal "take profit"?

The TP is set to 99% the maximum to allow me to take my time to decide, if the coin price actually went down, when is a good time to re enter. My decision will be based on technicals, market and fundamentals of the coin. As I said a case by case basis.

In the next month I'm expecting many of my holding to pump and dump, and the main reason I'm doing this is to start taking some of those profits.

Can you automate reentering the market?

Yes, but I won't use that option. You can technically use a long bot, RSI7 daily below 20 and reenter. But this is a bit of a stretch for me. I'm not confident that that strategy will work as expected with all these different coins. It's difficult to generalise a re entry automated strategy. I prefer to see the short bot selling and showing me the percentage of profit, then looking at the information at hand and deciding what's next.