🧗‍♂️Derisking

📖 Introduction to the Derisking Strategy

This strategy is designed to help investors manage risk by securing their initial investment and allowing profits to grow without exposing the entire position to market volatility.

By strategically selling portions of a token when it reaches predefined multiples of its purchase price, the Derisking Strategy ensures that your initial investment remains protected while still benefiting from potential future gains.

🪁 How the Derisking Strategy Works

Initial Setup

1. Define Derisking Multiples:

   • ApeScreener suggest a specific multiple at which they want to derisk a positions, such as 2x or 3x the initial investment. This depends on your risk profile and the inherit risks of the specific token you bough. You can adapt this initial multiple.

Execution

1. Monitoring Price Movements:

   • ApeScreener’s AI continuously monitors the market prices of the tokens in your portfolio.

2. Triggering Sales:

   • Manual: When a token reaches the predefined multiple (e.g., 2x or 3x), ApeScreener will notify you to sell a portion of your position.

   • Automatic: Our smart contract will automatically execute the derisking process.

💎 Benefits of the Derisking Strategy

🕊️ Risk-Free Investing

The primary benefit of the Derisking Strategy is that it effectively makes your investment risk-free once the initial capital is recovered. By securing your original investment, you can continue to participate in the market’s upside without worrying about losing your principal amount.

🤖 Emotion-Free Decisions

The automated nature of the Derisking Strategy removes emotional biases from the decision-making process. Investors often struggle with the temptation to hold onto winning positions for too long or sell too early out of fear. ApeScreener ensures disciplined and systematic execution of derisking actions based on predefined criteria.

🪃 Capital Recovery

By recovering your initial investment at strategic points, the Derisking Strategy provides liquidity that can be reinvested in new opportunities. This approach enhances portfolio diversification and reduces the risk of significant losses.

🦿 Example Scenario

Derisking at 2x

• Scenario:

  • An investor purchases $1,000 worth of a token.

  • The token's price doubles (2x), making the position worth $2,000.

• Action:

  • ApeScreener sells half of the position ($1,000 worth), recovering the initial investment.

• Outcome:

  • The investor’s initial investment is secured, and the remaining $1,000 worth of tokens can continue to grow without risking the initial capital.