A tiered exit strategy is selling predetermined percentages of holdings at multiple price levels rather than attempting to time one perfect exit. This approach systematically locks in profits as price rises while maintaining exposure to further gains, eliminating the pressure to perfectly time the top. Common structures include selling 25% at 2x, 30% at 3x, 25% at 5x, and holding the final 20% with a trailing stop.
Example:
You bought $10,000 worth of Ethereum at $2,000 (5 ETH). Your tiered exit plan: Sell 1.25 ETH (25%) at $4,000 (2x) = $5,000 locked in. Sell 1.5 ETH (30%) at $6,000 (3x) = $9,000 more. Sell 1.25 ETH (25%) at $10,000 (5x) = $12,500 more. Hold final 1 ETH (20%) with trailing stop. Total secured: $26,500 from your $10,000 investment before the market peaked, while maintaining exposure if ETH continued to $15,000. This beats selling everything at one price and either exiting too early or holding through a crash.