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Lady of Crypto Shared: “Can’t afford to buy, just waiting for losers to turn around so I can sell”. If you lack liquidity and are holding onto losing positions hoping they’ll turn around, it’s often better to take the losses and buy something else. Crypto trading.
Community Response: I don’t really think so. Most of the new people on crypto, jump from a losing position to another losing position, because they jump from a losing coin for a hype coin which is already passing ATH.
Not being able to admit that you were wrong is a common psychological error amongst newbies. Holding onto a loser for months hoping it goes up 5% so you can sell is potentially more costly than selling at a loss and buying something else.
So, you are saying I should sell my ADA? Buy something during a dip when there is a chance of it dipping further. Refuse to wait for it to go up and make a profit. Label it a ‘loser’. Sell at a loss. Buy something else at a dip. Repeat. Great strategy!
Not really a misinterpretation. Despite your supposed gains, you are still a newbie if this is your strategy. The only reason you should sell at a loss, is that you bought it without knowing and it is bad fundamentals or if the fundamentals have changed. That applies for all assets.
“I am not a newbie. I am not even new to crypto. My team is made up of three guys with 20, 8, and 5 years’ experience. I trade with them daily and our strategy is the same. You are making a lot of assumptions here.”
Your mindset is that of a newbie if you are suggesting this as a ‘strategy’. I think any logical trader will agree with this simple point: If you no longer believe in the coin based on its fundamentals, you can sell at a loss. Otherwise, you are just letting FOMO get to you.
“33 years combined trading experience on my team, millions managed between them, newbies, got it. I will let them know they are doing it wrong and I’ll leave the team.”
So, if my asset drops 20% then I sell it and buy one that has just gone up 10% The old asset suddenly jumps back and makes up its gains, whilst the new asset levels off. And, I’m 10% down. I’ve seen it happen.
More like a position drop by 10% Then continue to slowly bleed out while you cannot enter better trades because you refuse to take a loss. Then, you watch the better trades go up 100% while your bad trade bleeds out to -50%. A year later you are still -50% and the other coin is 10x.
We’re not supposed to HODL HODL HODL forever? I always have liquidity so I just keep buying everything, let’s slow turn this barge around. So, you’re saying I should drop the NGL bag that you shilled?
If you do not have the liquidity to buy anything else, and you have nothing else you want to sell, then yes. I scale into all my trades so I averaged down NGL (not going to lie) and I am at break-even right now. I still think it will go up over the long term.
This is mainly only true for leveraged positions (where you should always sell losing positions). For long-term HODL on projects you believe in, this is an absolutely flawed strategy (unless your belief in the project has changed) not financial advice.
Not talking about long term HODLs. Lol I would’ve loved to see you buy BTC at $100 and sell at $3. Selling at a 97% loss is pointless. Buying BTC at 100 and selling at 50 so you have the liquidity to buy ETH though. Exactly, the thought I had when I bought Sol at $36.
We can all point to one specific example when a strategy doesn’t work. It’s never about the one time, it’s about how it performs over thousands of trades.
