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I made an exit strategy so you don't have too!
So my main take away from the last bull run is you go into the bull market not knowing what is going on and you will assume you will figure out the top and sell perfectly.
This does not happen even and you will get burnt. I did and i'm sure that many of you will have had similar experiences. There are so many ways to exit the market, here is just one idea I had that makes sense to me. Please change this as you see fit to taylor your portfolio.
Step 1, Making a duplicate portfolio tracker: On coingecko/ coinmarketcap make a new portfolio. This will be important for this strategy. Once you start selling (this point will be discussed), you will not mark the sales on this duplicate portfolio. Only on your main one. This is so we can accurately track the % we should be selling.
Step 2, when to start selling: This is not an exact science, however for the purpose of this I have chosen one month after the previous break of ATH. Feel free to change this however the rest of the data below will use this.
Step 3: Estimating the length of the bull run: Below I will show the length of the last 3 bull runs from the point where they break the ATH.
2013, the break of ATH to top is 272 days. This was a very volatile bull markets however we don't expect this due to the size the market has grown too.
2017, the shortest of the three at 230 days.
2021, the longest bull run lasting 348 days.
So here we have 3 bull markets to work with. Obviously we have to assume that something will change majorly for the next rally, however we use what we have to give ourselves the best chances.
Average of the 3 = (348 + 230 + 272) / 3 = 283 days. Minus one month which we wait before we start to sell will equal 262. That is what we will be working with.
Step 4, the strategy: First of all I will be working on the assumption that you are trying to sell 100% of the portfolio.
100% / 262 = 0.38%. This is what percent needs to be sold per day to achieve 100% sold using our time estimate.
Now, you should not sell everyday 0.38%. Once you wait the month after the previous ATH breaks, you start counting percent, each day accumulating. E.G. day 1 = 0.38, day 2 = 0.76 etc. You let this build until a green green day which you sell. Could be worth waiting for the largest moves (+10-20%). Once you sell this amount, the count resets to 0.
So why did we create the second portfolio? Because if you are selling the ratio in your portfolio would change. For example, if you hold 1 BTC and sell 50%, then the next day you sell 50% again, you would have 0.25 BTC. Not sold 100%. However, if you keep one portfolio not touching it when you sell, you can put in say what is 5% in dollars and the next day 5% again, and you would have sold 10%. Otherwise the maths will get extremely complicated.
Once you get toward the end, you might have to sell on some red days. Don't be afraid! This is very important if you want to take full profits, so in the last say 100 days be less picky about you sell days. We always speak about DCAing in so use this strategy if you would like to DCA out :).
NFA and Always DYOR!
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