Don’t Obsess Over Selling The Top

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  • Selling the top is a holy grail for some traders, but it distorts the point of trading
  • Selling the top is more a matter of luck than judgement
  • Good traders don’t aim for the top because they know it increases the odds of a loss

Selling the top of a trade is given a lot more credence that it actually deserves. Of course for those who manage it there is an added frisson of excitement, but really it is not something you should be aiming for, and when you look into it, selling the top isn’t really that amazing of an achievement anyway. And it certainly isn’t something you should be aiming for.

Selling The Top is Down to Luck

There is a reason why you don’t see many people waxing lyrical about how they sold the absolute top, even on crypto Twitter. This is because it is almost entirely down to luck. Take the recent Dogecoin 1,000% pump for example:

There is no way that anyone was sitting with their DOGE bag at $0.03 and thinking ‘this will go to $0.08854457, I can feel it’ and setting their sell for that exact amount. No, what happened was that there was one person, almost certainly only one person, who thought ‘yeah, that’ll do’ and market sold when they guessed the top was in. They didn’t pick the spot after careful charting and tracing out Fibonacci extensions – they hit sell and got lucky. Thousands of others, perhaps even hundreds of thousands, didn’t sell the top, but that one person did, by absolute chance.

Other profit makers who sold early may have looked at that spike and the top seller with envy, but this is counterproductive. The odds of you being the top seller in any trade are, as we have seen, thousands and perhaps hundreds of thousands to one. It stands to reason therefore that you shouldn’t be aiming for this needle in a haystack at the risk of losing more on the other side of the trade.

Sell On The Way Up

What you should be aiming for in any trade is to be somewhere near the top, but holding on for the absolute top should not be your goal. Waiting to be the man who gets out at the very top will lead you to leaving your position in too long, and as we saw with DOGE that can mean you end up losing as the candle quickly turns from green to red.

As we have discussed in a prior article you should only enter a trade when you know your exit points, and you shouldn’t deviate from these even if the trend is strong. You can always leave a moonbag, but the vast majority of your trade should be at the levels you have set.

Selling on the way up is by far the best approach to take compared to holding on and hoping to sell the top, especially when no one knows when the run will stop. For every man who sold the top there are a hundred still stuck on the mountain, bags full and waiting for the moon. Don’t be one of them, and don’t be annoyed you missed out on selling the top – it’s a game of chance, and one that is not profitable long term.