What an Exit Plan Actually Looks Like
Let's walk through two hypothetical scenarios to illustrate the difference between having a plan and not having one.
Scenario A: No Exit Plan
Alex buys $10,000 worth of an altcoin at $2. It runs to $10 over four months — his position is now worth $50,000. He's thrilled. He tells himself he'll sell “when it feels right.”
It pulls back to $8. He holds because $8 is still a 4x gain. It bounces to $9 and he feels vindicated. Then it drops to $6. He starts to worry but convinces himself it will recover. “It's a healthy correction.” It drops to $3.50. Alex's $50,000 is now $17,500. He sells in frustration.
Alex made $7,500 on a position that was up $40,000 at one point. He captured 19% of his peak gain.
Scenario B: With an Exit Plan
Jamie buys the same $10,000 position at $2. Before she buys, she writes down her plan:
- At $4 (2x): sell 25% — recover $5,000 of initial capital
- At $7 (3.5x): sell another 25% — lock in $8,750 more
- At $10 (5x): sell 25% — lock in $12,500 more
- Final 25%: hold with a trailing stop-loss 25% below the high
The coin runs to $10 and Jamie has already sold 75% of her position. She's realized $26,250 in total sales. Her remaining 25% is worth $12,500 with a trailing stop at $7.50.
The coin drops. Her trailing stop at $7.50 triggers, adding another $9,375. Total realized: $35,625. She captured 64% of the peak value. And she didn't have a single sleepless night about it, because every sell was predetermined.