- Many of us sell coins after holding for a loss in the belief that it will never go up, only do see it jump immediately
- Sometimes this is down to bad luck, but all too often it is down to bad trading
- My experience with ATOM this week has been a reminder that the gods are not out to get me, but I am
It’s a typical response from a cryptocurrency trader to curse the gods when a coin they sell goes up right after they sell it. Sometimes this is warranted, for example if an announcement comes out, but often the reason has nothing to do with luck – it’s simply bad trading that, perhaps out of self-preservation, we explain away as bad luck. Once could be down to luck of course, but repeat occasions speak of a critical flaw in an area of your trading.
ATOM Experience Highlights Luck vs Trading
The reason I’m writing about this today is that it has happened over the past 24 hours and should serve as a warning. I bought ATOM on October 2 at $38 for a medium-term hold. It spiked at $43 in late October, since when it has been on a near five-week downtrend while other alts have been making great gains.
Yesterday I finally lost patience and sold it at a 29% loss to move into another coin. What do I see the next morning? Not only has ATOM bounced 12% since I sold it, but it is suddenly all over my crypto Twitter feed as the next big mover, the first time anyone has talked about it in months. The timing could not have been much better.
Emotions Trumped Analysis
What’s my first reaction? “Typical…just my luck…what are the odds”. I curse the trading gods for making me sell right before it went up. The truth is a little less prosaic. Here’s the ATOM chart:
Notice anything blindingly obvious, like the massive support area going back three months that has been tested multiple times in the last two weeks and beneath which it never closed?
The reason I missed this support zone was because I wasn’t looking for it – I was fed up with the coin going down and then not moving while everything else was going up. And so I sold without first looking for any such support zones, right before the support did what support does and helped establish a platform from which the next move can build.
Fortunately the move has only been 12% to date so there is plenty of time to see where it settles, but it is another reminder that the trading gods are not out for your blood specifically. So the next time that you’re tempted to sell after holding for a long time, make absolutely sure it has not bottomed out before doing so.