I see a lot of people always posting their success stories but you never see posts that talk about losses. In this article I will talk about a trade that I made yesterday and where I let greed take over and lose me what would have been a 5% gain in less than an hour on a trade.
I have been following TRX for quite some time and I have both a long term position on it and I also like to ride the waves with it. I woke up yesterday morning and noticed that it had made some nice growth. After a quick TA I determined that it would go on another rise so I purchase some at 0.00000823. I immediately set a sell order for 0.00000865 (5% gain). As you can see from the chart above, my pick was correct. HOWEVER.......
Sitting in a morning meeting with my day job I was watching the growth. Thinking that it might go higher I cancelled my sell order and planned on entering stop limit orders like I usually do when watching something rise to try and get a higher return. Of course, it dropped.... Stupid right? So now I am waiting for it to go back up.
Now many might argue that I should have minimized my losses and once I realized that it was going down I should have sold. I see merit to this but I do not think this is always the case. The key here is that I had a plan should it have gone down and not up. If you look over what is going on with TRX and the history, you will notice that it had a few times where it was well over 0.0001 as seen in the chart below. My plan was basically to turn this trade into a long term position should it not work out in the short term as I feel that this coin will easily go back to above 0.00001 as the market recovers.
What I am trying to get at here is that just because you made a poor choice, or an incorrect prediction, that does not always mean you need to take a loss. You should never bet your entire capital on a single trade. I also would never buy a coin when it is at its all time high. Day trading coins when they are in the dips is usually a safe bet because if the trade does not go as planned, you can always switch that trade to a long term position and it will most likely turn into the gain you wanted, perhaps more. While we all want to make 5% gains on every trade in less than an hour, the truth is that this is not a realistic expectation. I fully expect with what is going on with TRX that this will quickly jump in price allowing me to turn this into a nice gain. No matter what market you trade in be it stocks or crypto, a 5% gain in a week, or even a month is still a good gain. Of course it could be argued that I should have taken the loss because I could have made it up very quickly and while that is true, there is no guarantee that the next trade would not have the same problem.
Lastly, this shows the point that many others try to make, if you are going to trade, make sure you go into it with a plan for both a gain, and what you will do should it become a loss. Selling and accepting the loss is not always the best solution. You have to rule out greed and fear, the quicker you can do that (myself included), the better off you will be.
I hope this helps you and lets you see other options that are available and that should be considered when you are thinking of risk / reward and strategy.
NOTE: I am not a financial advisor and this is just my opinion. Before making any investment please make sure you do your research and fully understand what you are investing in!