One of the most frustrating things happened to me when trading Litecoin.
I had originally bought some Litecoin at $129 CAD. Litecoin then went up to $190 CAD - my husband got very excited and told me to buy some more. I thought that it was a terrible idea since Litecoin had just gone up about 45% overnight but I listened to him anyways. I didn't believe that it would go up any higher and the next morning, I saw that it started to decrease a little. I started yelling at my husband, telling him what a terrible idea it was to buy at a high and I sold my original Litecoin at $165, for a gain of about 28% out of fear that I missed the opportunity to sell at a high.
I assumed that Litecoin won't go up anymore, so I set a limit sell of a 30% gain on the remaining Litecoin that I had purchased at $190. The limit sell was set for $247. I decided that making about 30% was a pretty good return given that this coin likely wouldn't rise again anytime soon and I assumed that it would take a while for Litecoin to rise that much.
I woke up the next morning to see Litecoin trading at almost $400! Of course, all of my Litecoin got sold at almost half of that. I realized that if I HODLed and sold at this high, I could have made a return of approximately 150%!
In this moment of sheer panic, I did the worst thing possible! I bought more Litecoin at $395 CAD! Of course since then, Litecion has been stagnant or slightly falling. The worst part is that other coins are all rising and my money is tied up in a coin that's falling or, at best, staying flat.
This is where my emotions come into play again. I have an internal desire to never sell anything at a loss. So for days, I've been HODLing my Litecoin that isn't making me any money. Finally, this morning I realized that I need to take this loss in order to make money on other coins that are actually rising.
I learned the hard way not to let emotions dictate my trading. My new mantra is:
- Take a breath
- Do nothing
- Watch the market
- Trade when I'm no longer emotional and I've assessed what the market is doing
Hope this helps others get a hold of their emotions!