How To Exit Your Positions (Without Regrets)

7 min readSep 10, 2021

Welcome back Chads. In our previous article, we talked about spotting accumulation patterns so you know when to buy in.

We demonstrated this strategy in real time in our Telegram and Twitter channels with several calls that went on to do quite well:

$LIFE

$GME

$AIR

Hopefully, you’re starting to realize that it’s perfectly OK to buy a coin that’s already pumped 300%, because in a bull market, number can always keep going up.

Both extremes of the IQ will make money from aping into trending coins, while the midwit watches and copes from the trendlines.

However, the brainlet who chases pumps might also turn into a die-hard hodler and refuse to sell, even when it’s clear the trend is dying and new buyers are clearly losing interest.

That’s why it’s equally as important, if not more important, to know when you should sell in addition to when you should buy.

So it’s time for you to put on your big boy pants and start making the decision for yourself of when to exit, according to your own risk tolerance. That way, you won’t need to rely on our exit signals which we’re going to stop posting to keep the channel less cluttered.

Timing Your Exits

In the Enlightened Aping Strategy, we like to sell when the uptrend has reversed or looks like it’s dying. In other words, when the chart is no longer making higher highs and higher lows.

Often, the trend reversal starts with a big dump which can lead to a price crash of 30% or more.

When this happens, we carefully watch to see whether the dump gets bought up quickly, which suggests there’s more buyers waiting to rush in.

Most of the time, that doesn’t happen, so we target an exit on a reversal (the complacent shoulder).

Here is a trade we exited earlier this week due to a big dump:

It can be emotionally stressful during a big dump. Your reptilian brain might panic and scream at you to get out before everything goes to 0.

Just take a few deep breaths, stay calm and remember there is almost always a reversal after a huge nuke. And if you have some patience and wait for the reversal, you’ll have an opportunity to exit higher.

Of course isn’t an exact science, and we are still learning and experimenting every day to get better at exiting. Here are some guidelines and rules of thumbs we use when deciding when to exit.

The 30% Dump Rule

This is a very general rule of thumb, but we’ve found when something dumps 30% from the high, that could be a signal the move is over. We want to look to exit on the next bounce.

If you’re using Trading View charts, you can use the “Price Range” tool to figure out the relative percentage of a move:

Here’s an example of this idea in action:

Again, we’re not trying to buy the bottom and sell the top. No trader is able to do that unless he has enough funds to CREATE the bottom or top.

Even if you enter and exit 20% too late, you’re still capturing 60% of the move. And in crypto, where it’s not uncommon for coins to do 3–10x, that’s still a massive upside.

Project Fundamentals

If a project has strong fundamentals, then we are okay with holding it through more volatility.

By fundamentals, we mean things like:

Valuation — is overvalued or undervalued relative to similar projects?
Team — is the team anon or doxxed? How is their communication and interactions with the community?
Development — is the project being actively developed and are there new features being released? Or is it just vaporware?
Community — how “die-hard” is the community? Does it feel like a cult? (If so that’s bullish)
Narrative — Is the project’s sector bullish based on what the market is into at the time? For example, right now P2E (play to earn) games are hot (thanks to Axies success), so if we needed to choose between a DeFi project and a P2E project with similar charts, we would probably choose the P2E.
News catalysts- are there upcoming token unlocks (bearish) or product releases (bullish)? It’s not uncommon for tokens to pump leading up to launches, then dump after release (the classic ‘buy rumor and sell news’ play).

BTC Instability

Sometimes we can get so wrapped up in trading alts that we forget the entire market is positively correlated to BTC.

(Yes, there’s the flippening and decoupling theories from ETH maxis, but to us, that’s all speculation. The reality is, most alts will dump when BTC dumps.)

If we sense that BTC looks weak and could possibly dump, we derisk by cutting positions that aren’t in clear uptrends.

Sometimes BTC stabilizes and those positions pump, leaving us sidelined until a better entry. But that’s okay and just part of the game. It’s better to be prepared for different scenarios than to always be risk-on with alts and then get caught with your pants down.

Be Okay With Making Mistakes

The sooner you can accept you’ll never trade perfectly, the better of a trader you’ll become. You’re almost always going to end up selling too early or too late. Or pass on aping into a project that goes 1000x (which okay cause you probably would have sold at 2x anyways ;)).

Accept that everyone in crypto has a story about how they bought XYZ coin real cheap and sold it before it mooned 100x. Almost everyone has a story about how they missed out on becoming a millionaire, and you’re no different.

Be okay with your past mistakes. Don’t dwell on them even though they could be painful. Instead, learn from them and focus your attention on current and future opportunities.

Because there are still plenty of 10x’s in this market if you just know where to look.

Don’t Get Married To Any Particular Project

There’s a bias we have as humans where the more we invest into something (either money, time or even mental energy), the harder it is to fully let it go. This has to do with the “Consistency and Commitment Principle) as explained in Robert Ciadini’s book Influence.

This makes it hard to exit losing positions, even when all the signs suggest you should get out.

We’ve found that becoming an active community member and telling all your friends about it makes it harder to exit.

If you’re invested or involved with a project that you have strong conviction in, that’s great. Hold on for dear life. Long-term holders tend to make the biggest gains if they’re willing to hold for years.

For us as shorter time frame traders, we try to remain as emotionally unattached as possible, and make decisions solely based on the charts and fundamentals.

If you find yourself having a hard time selling because of mental attachment, then try selling a tiny bit, like 1–2% of your stack. It will make it easier for you to part with your precious internet beans later if you need to ;)

It’s Okay To Buy Back Higher!

After we exit, we still keep tabs on the project and chart and wait for another accumulation phase. Once and uptrend is confirmed, we’ll ape back in and ride the next wave up.

This is especially true for projects with solid fundamentals that has historically performed well.

Do think just because you sold you can’t ever buy it again because the price is higher now. Forget the past and focus on present and future opportunities.