What is
#Scaling out method
The scaling out method is a trading strategy that involves selling a portion of your holdings as the price rises, to lock in your profits and reduce your risk. For example, if you bought 1000 USD worth of Bitcoin at 30,000 USD per coin, and the price rose to 31,000 USD, you could sell 500 USD worth of Bitcoin and keep the rest. This way, you would secure a 16.67% return on your initial investment, and still have exposure to the market if the price continues to rise. You can repeat this process at different price levels, until you exit the trade completely or reach your target price12.
The scaling out method can help you to avoid emotional trading, such as being greedy or fearful, and to optimize your profit-taking. However, it also has some drawbacks, such as missing out on potential gains if the price skyrockets, or paying more fees and taxes for multiple transactions3. Therefore, you should use this method with caution and according to your trading plan. 📈
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