Strategies – How and when to withdraw.
When buying cryptocurrency whether it be for a coin, an ICO or a platform you should always have a strategy when going into any purchase. Strategies take into account a number of factors and include your personal risk tolerance, your confidence in the business and its model, the value of the coin involved and the length of time.
Once you can understand the details on those aspects you can determine if you tend towards conservative strategies, steady strategies or aggressive strategies. No one strategy will work for every coin or platform. All strategies work on a continuum. You will be able to adjust your strategy to match your changing variables. This is also why it's so important to frequently review your portfolio.
Different types of strategies
A conservative strategy might result in you withdrawing your seed (starting capital) very quickly. You may prefer a steady strategy whereby you reinvest (as an example) at a rate of 70% to 30% withdrawals. An aggressive strategy might involve compounding for an extended period before withdrawing anything. After a predetermined period then to steadily and potentially slowly withdraw seed plus. Many people like using the popular 70/30 or 80/20 split (the first figure is the amount that is compounded relative to the amount withdrawn).
For coins you hold for a short profit or ICO's the withdrawal strategy will differ. You may decide to hold the coins for a certain period of time then determine how it has performed. From there you can decide how much to sell or to whether to wait. Remember, at least half of all ICO's fail within the first year so don't delay in taking at least some profits unless you are extremely confident in the project.
Remember you will use a different strategy for different situations. For very high risk platforms you should get seed out early or at least half seed out as soon as possible so that you can play and earn with profits. For platforms you are extremely confident in you may wish to compound at 100% for 6+ months before dropping to a 70/30 strategy for example. This is popular in many of the long term platforms. As you can imagine there are almost endless ways you can withdraw capital from a platform. The best person to determine which way is right for you is you. You should know yourself so to maximise your returns and minimise stress.