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!
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