Selling a spike without guessing the top
A coin you hold doubles in a week. Everyone around you has an opinion about where the top is. You don’t know where the top is, and neither do they.
The usual choices are both bets. Sell everything now, and you bet the rise is over. Hold everything, and you bet the rise will last, or at least not fully reverse. Whichever way it goes, one of those two bets hurts.
There is a third option that needs no opinion about the top: sell a small, fixed amount every time the price takes another clear step up. This post walks through how that works, with one example and three possible endings.
The example
Say you hold 2,000 coins at €0.10 each, so €200 in total. Your average cost is below €0.10, so every sale in this example is a profitable one.
Your rule: every time a 4-hour candle closes clearly higher than the one before, sell €20 worth of coins.
Over the next week the price climbs to €0.25, and the rule fires eight times on the way:
| Price | Coins sold for €20 | Coins left |
|---|---|---|
| €0.11 | 182 | 1,818 |
| €0.12 | 167 | 1,652 |
| €0.14 | 143 | 1,509 |
| €0.16 | 125 | 1,384 |
| €0.18 | 111 | 1,273 |
| €0.20 | 100 | 1,173 |
| €0.23 | 87 | 1,086 |
| €0.25 | 80 | 1,006 |
After the eighth sale you have €160 in cash and 1,006 coins left, about half the coins you started with.
Look at the middle column. Every sale is the same €20, but the number of coins in each sale gets smaller as the price rises: 182 coins at the first step, 80 at the last. A fixed euro amount sells less and less of your position the higher the price goes. The coins you hold on to are the ones that benefit if the rise continues.
Three endings
Nobody knows what happens after €0.25. So compare the three choices from the start of this post against three possible endings: the price falls all the way back to €0.10, it settles at €0.15, or it keeps running to €0.45.
| Price at the end | Hold everything | Sell everything at €0.11 | Sell in €20 slices |
|---|---|---|---|
| Back to €0.10 | €200 | €220 | €261 |
| Settles at €0.15 | €300 | €220 | €311 |
| Runs on to €0.45 | €900 | €220 | €579 |
In the third ending the slices keep firing on the way up, fourteen sales in total, so €280 in cash plus 664 coins still held.
Selling in slices wins two of the three endings and comes second in the third. It is never the worst of the three.
That is the honest summary. If the price keeps running, holding everything beats the slices by a wide margin. If the price falls back, the slices keep most of the gain, while holding gives almost all of it back. You don’t have to know which ending is coming. The slices hold up in all three.
What the slices cost you
The price of never being the worst is never being the best either. In a rise that keeps going, every slice you sold looks too early in hindsight. That regret is real, and it is worth deciding in advance that you can live with it.
There is a second cost that is easier to miss. After a spike, the price usually settles into a new, higher range. If your strategy also buys dips, a drop from €0.25 to €0.22 can trigger a buy, even though €0.22 is more than double where you started. Buying there raises your average cost. Selling doesn’t change your average cost, but buying back at the new level does. This is the rule doing what it was set up to do. Still, know it will happen, and check it in the Lab before it surprises you.
Sizing the slices
The slice size decides how the example plays out, and there is a simple way to check yours: divide the value of your position by the slice size.
- Too few slices. With 1,000 coins instead of 2,000, the same €20 slices sell almost everything in eight steps. You would have 6 coins left by €0.25 and nothing to gain from a further rise.
- Too many slices. With 20,000 coins and €20 slices, eight sales take less than 5% off the position. If the spike reverses, you give almost everything back, as if you had never sold at all.
A position worth ten to twenty slices at the start of a spike is a reasonable middle. The rise trigger matters too: a larger trigger means fewer, bigger steps between sales, and a smaller trigger means more sales in a rise of the same size.
Waiting for confirmation
The weak spot of the example is the first sale. At €0.11 the price has barely moved. A single strong candle is enough to fire the rule, and at that moment you can’t tell a real rise from a one-candle wobble. If the rule fires on every early wobble, the first slices go at prices that later look cheap.
RSI confirmation closes that gap. RSI measures momentum: how strongly the recent closes have leaned up or down. With RSI confirmation switched on, a sale only fires when the price has risen past your trigger and RSI shows the market is overbought, above 70 by default. A single strong candle rarely pushes RSI that high. A rise that keeps going for several candles does.
The effect on the slices: the first sales come later and at higher prices, because the rule waits until the rise has shown some staying power. The trade-off is the mirror image. In a short spike that fades after a day or two, RSI may never get high enough, and you sell less or nothing at all. RSI confirmation can only hold back a sale the price trigger already produced. RSI confirmation never creates a sale on its own.
How this looks in Aurono
A sell rule in Aurono is built from exactly these pieces:
- A rise trigger on candle close. A sale can only fire when a candle closes a set percentage above the previous close. A brief spike inside a candle that falls back doesn’t count.
- Optional RSI confirmation. A sale only fires when RSI also shows the market is overbought, so the first slices wait until a rise has some momentum behind it. What RSI actually measures explains the number itself.
- A fixed sell amount in euros. Every sale is the size you configured, so the taper from the table above happens automatically.
- A floor at your average cost. Aurono never sells below the strategy’s average cost basis. Early in a recovery, sales are blocked until the price is above what you paid on average.
In the Lab you can run any sell rule against historical prices and see every sale that fired and what was left of the position at the end, before you commit to the rule.
One slice at a time
Selling in slices doesn’t get you out at the top. Nothing reliably does. What it gives you is a rule you can follow during a spike, when most people’s judgment is at its worst: take a small, fixed amount at every step up, and let the rest of the position ride.
→ Profit isn’t profit until you take it · The month my rules started saving euros · Try a sell rule in the Lab with shadow mode