ETH - "I Made a Fortune Getting Out Too Soon" JP Morgan
Updated
One of the habits that most successful traders have in common is "selling too soon"! Its the ole adage "you don't go broke taking profits". Changing your habits from hindsight to foresight trading will make you a better trader.
So here lies my situation and one I have absolutely no issue being in. I shaved off some ETH' on this run and it looks to be moving higher. Keep in mind I never sell my core holdings, but I do shave off "locking in profits" during big runs to "re-balance" my portfolio. If 15% of my core portfolio is allocated to ETH' and its now 25% weighted I re-balance. Its the "Dogs of the Dow" method. I shaved some off between $1100 & $1225 and adjusted. Again I am not out of ETH' I just re-balanced my portfolio to insure I'm not overweight any one equity.
One other thing to mention "lock in profits" means you sell and you do NOT chase! Be patient. Even the best of equities pull back. The key is being in a position to take advantage of it. Now this does not mean you can not buy back in if we move higher. There is no harm in buying at $1400 for $2300 when you sold at $1200. Here is the reverse scenario. You do not lock in profits at $1200 it double tops at $1350, and then pulls back to $800 or lower. Like that has never happened! Double tops happen frequently at levels where multi-cycle 5th waves occur. So I'm not chasing. Last thing I want is "profit erosion". I sold at $1100-$1225 then "FOMO" out, buying right into a double top to see it correct taking a profitable situation and turning it into "Portfolio Erosion and not having any cash to buy a dip.
Now I need to be Trollclear, "WE CAN GO HIGHER!", but we have a valid five count in a longer term fifth wave, so this is likely an area we see a double top. I have updated my levels, and I am implementing a strategy as this is a long term holding. If the count is correct we have pulled back to the 0.618 level of wave (v) (in blue) and are retesting the high. But we may have completed a medium term five wave count as well, which we have yet to see fully correction. The $1045 & $820 are the 0.382 & 0.618 retracement levels of wave 5. $915 & $615 are the 0.382 & 0.618 retracement of wave (I) from the $180 level. The 0.618 retracement ($820) of wave 5 would put us into wave 4 where I am a buyer. I could add at the $1050 level to cover my sell orders and I just might, but we are not there yet. Now price targets are just levels of interest at this point, where I am looking for a reversal signal. We must be patient and wait for the market to cycle, not try and guess the timing of the market. Ever wake up and see an equity down and go "oh what a deal"? Some of the best trades I ever made were when I forgot about an equity and then realized one day, out of the blue, it was way undervalued and bought.
So why do I think ETH' is in FOMO right now? Simple, I had two of my buddies the past two days, out of the blue, call wanting to buy Ethereum! Both are conservative long term investors, and when I get the phone call, "hey buddy you at the house?", yup, "I want to swing by and buy some more Ethereum". HUH? As much as I said brother I would be buying Litecoin and bitcoin here, their focus was on Ethereum'. Now in fairness my one bud, bought all three, and the other bought litecoin' too. But the fact they, out of the blue, came over to buy Ethereum' provides a gauge in my opinion of "Market Sentiment". The odd thing is they wanted to buy Bitcoin at 17k and I was like "I am selling here". Now its too expensive?
Bottom line often the most simple gauges of market sentiment are right around us. Let me see, yep 500% in mongolian coin, 1010% in Big Red coin. Here's your sign!
"I made a fortune getting out too soon" hangs below the picture of JP Morgan as a reminder to never regret taking profits when I can!
So here lies my situation and one I have absolutely no issue being in. I shaved off some ETH' on this run and it looks to be moving higher. Keep in mind I never sell my core holdings, but I do shave off "locking in profits" during big runs to "re-balance" my portfolio. If 15% of my core portfolio is allocated to ETH' and its now 25% weighted I re-balance. Its the "Dogs of the Dow" method. I shaved some off between $1100 & $1225 and adjusted. Again I am not out of ETH' I just re-balanced my portfolio to insure I'm not overweight any one equity.
One other thing to mention "lock in profits" means you sell and you do NOT chase! Be patient. Even the best of equities pull back. The key is being in a position to take advantage of it. Now this does not mean you can not buy back in if we move higher. There is no harm in buying at $1400 for $2300 when you sold at $1200. Here is the reverse scenario. You do not lock in profits at $1200 it double tops at $1350, and then pulls back to $800 or lower. Like that has never happened! Double tops happen frequently at levels where multi-cycle 5th waves occur. So I'm not chasing. Last thing I want is "profit erosion". I sold at $1100-$1225 then "FOMO" out, buying right into a double top to see it correct taking a profitable situation and turning it into "Portfolio Erosion and not having any cash to buy a dip.
Now I need to be Trollclear, "WE CAN GO HIGHER!", but we have a valid five count in a longer term fifth wave, so this is likely an area we see a double top. I have updated my levels, and I am implementing a strategy as this is a long term holding. If the count is correct we have pulled back to the 0.618 level of wave (v) (in blue) and are retesting the high. But we may have completed a medium term five wave count as well, which we have yet to see fully correction. The $1045 & $820 are the 0.382 & 0.618 retracement levels of wave 5. $915 & $615 are the 0.382 & 0.618 retracement of wave (I) from the $180 level. The 0.618 retracement ($820) of wave 5 would put us into wave 4 where I am a buyer. I could add at the $1050 level to cover my sell orders and I just might, but we are not there yet. Now price targets are just levels of interest at this point, where I am looking for a reversal signal. We must be patient and wait for the market to cycle, not try and guess the timing of the market. Ever wake up and see an equity down and go "oh what a deal"? Some of the best trades I ever made were when I forgot about an equity and then realized one day, out of the blue, it was way undervalued and bought.
So why do I think ETH' is in FOMO right now? Simple, I had two of my buddies the past two days, out of the blue, call wanting to buy Ethereum! Both are conservative long term investors, and when I get the phone call, "hey buddy you at the house?", yup, "I want to swing by and buy some more Ethereum". HUH? As much as I said brother I would be buying Litecoin and bitcoin here, their focus was on Ethereum'. Now in fairness my one bud, bought all three, and the other bought litecoin' too. But the fact they, out of the blue, came over to buy Ethereum' provides a gauge in my opinion of "Market Sentiment". The odd thing is they wanted to buy Bitcoin at 17k and I was like "I am selling here". Now its too expensive?
Bottom line often the most simple gauges of market sentiment are right around us. Let me see, yep 500% in mongolian coin, 1010% in Big Red coin. Here's your sign!
"I made a fortune getting out too soon" hangs below the picture of JP Morgan as a reminder to never regret taking profits when I can!
Note
As the market starts to pull back in general Ethereum is holding up fine. I think many are mistaken selling out a position or even a substantial position for taking a little off the top. I am not saying sell out of your entire position this is foolish as I mentioned in the 70/30 portfolio that traders often miss the huge runs that HODL's get. However, when you have gone from $300 (in my case) to $1200 I do not hesitate to shave off a little. It goes up Im still in, it goes down, I can buy back a little cheaper adding to my position. Most of the time it pulls back, not all, but most. Here is a similar pattern with BTC (almost identical) back when it started to make a run to new ATH's like ETH has. I suspect a dip will be fast and in a V formation like BTC. Its amazing how patterns repeat over an over. Note
Whether you believe something will happen or not, and regardless of what side of the trade you are on, it is always important to look at it from the opposing view. I see the comments that "never going below xxxxx again". This type of mentality will have you like a deer in the headlights. This is also a sign that market sentiment was on full FOMO! This morning reality set in. This is where patience and sticking to your plan and getting rid of emotions is critical. I specifically mention many traders sell a little off like was planned, but then get that impulsive feeling to buy back in when it goes higher. Hey it can always go higher and thats why we never sell our core. But now we were able to buy those sells back cheaper and add to our position. We also have a stack of cash on the side IF we get another pullback. It may or may not happen, but we are positioned to take advantage of it if it does. I also bought back my NEO at a wonderful price this morning! I was beginning to doubt myself. It was so cheap I actually added to it a few coins. Not all in but enough to profit from the bounce.
I've saying for weeks, CASH IS KING in corrections! I'm not looking at how down my portfolio is or scrambling to get rid of coins. I'M LOOKING FOR BARGAINS AND TRADES!!! See how your mentality changes when you have a strategy and plan! It goes from the deer in the headlights look, to GREAT I wanted to buy some of that and now I can!!!
Note
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