Every trader or investor who has entered the cryptocurrency market strives to get the maximum possible profit from the invested funds and trade and investment operations or altcoin signals.
But it often happens that many traders and investors leave the transaction earlier than the situation requires, and lose part of the profit or, as they say, do not take profits on time, eventually watching it gradually become smaller and smaller, at the time of the market transition to a state of correction or reversal of the trend.
THERE IS A GOAL, THERE WILL BE A RESULT
In order not to find yourself in such a situation and not to let the profit out of your hands, it is important to determine in time the benchmarks that allow you to know exactly the price levels at which you will be ready to withdraw from the transaction, both in case of negative and favorable developments.
To do this, it is extremely important to follow one of the fundamental principles of concluding exchange transactions – always calculate a transaction before it is concluded, defining two important levels, such as: Stop loss and Take profit.
By doing this, you will not only know how much you will earn, but will also be able to effectively manage risks, as well as clearly see how expedient it is to conclude each individual trading operation.
HOW TO DETERMINE THE GUIDELINES CORRECTLY
Both in the stock market and on cryptocurrency, key levels of support and resistance are used to correctly determine price benchmarks.
Example:
If you enter into a deal to buy cryptocurrency, the place below which Stop loss should be set will be the nearest level of support.
After all, if the price returns to it and continues to fall further, it means that the market has changed direction and the price will continue to move down, which in case of further retention of the position will only lead to an increase in losses.
Whereas it is recommended to set the Take profit fixing benchmark at the mark that determines or near the nearest resistance level.
Because it is far from a fact that the price will continue to rise above the key level.
Compliance with these simple rules will allow you to always take profits on time, protecting your deposit from unnecessary risks.
PROFITS AFTER THE HISTORICAL MAXIMUM
The cryptocurrency market has one distinctive feature related to the fact that unlike already formed and having a long history of ups and downs of financial markets, the cryptocurrency is in the process of formation.
This is the reason why the cryptocurrency market has become a record holder for setting historical price highs, just as it was in the Hi-Tech market.
And as for the topic of this article, each overcoming of the historical maximum always poses a new question for traders: “where to go next?”
After all, when we have benchmarks determined by the levels of support and resistance, everything is generally clear.
However, when there is uncertainty and an open horizon ahead, how to determine the Take profit level?
But fortunately for us, technical analysis takes into account everything!
As you know, movements in any market are cyclical and accompanied by periods of growth and subsequent price drop, which, in fact, determines a kind of price ranges that are easiest to see on the price chart with a time interval of one day.
It is these price ranges that serve as the first benchmarks for traders to determine the further prospect of price movement after overcoming the historical price maximum.
All you need to do is simply determine the width of the range between the levels of support and resistance formed during the development of the trading impulse, then project its width on the chart, which will be your reference point for fixing profit.
And, of course, do not throw aside the presence of such important benchmarks as psychological price levels, which can also become a place to fix profits, and the price mark above which the price will not go, at least without making a correction to the level of support, in place of which the maximum market point used to be.
As you can see, in order not to miss profits, it is enough just to master the basics of technical analysis of financial markets, which will allow you to choose the right benchmarks and calculate the transaction for maximum efficiency of your investments.