Suckers' Diary ③: Roll up your sleeves and work hard, lost hundreds of thousands in a week.

Don't be a diamond hand, don't pump with high leverage, decisively stop loss is quite critical.

Written by: 1912212.eth, Foresight News

On December 6th last year, the editor wrote an article titled "A Move as Fierce as a Tiger, Yet Unable to Escape the Curse of 'Holding on for Dear Life and Selling at a Loss'?" detailing the stories of retail investors who held on for too long and sold at a loss during past cycles.

Interestingly, the day the article was published turned out to be the historical high point for many altcoins, after which they continued to decline without looking back.

Half a year has passed now. Although Bitcoin has reached an all-time high, the altcoin market is still on its last breath, and the much-anticipated market-wide surge is still far from arriving. This article will omit specific floating loss amounts and recount the major mistakes made in trading over the past year, so that friends can learn from my lessons and avoid taking my path.

Holding through the decline, the time and opportunity cost is enormous

Since the beginning of last year, the editor has made at least 3 big mistakes. The first is that you don't know how to stop loss, and you will only die and die.

Around April 2024, I invested in SEI and ARKM, and then I clearly felt the market momentum fading, resulting in me being stuck without selling. At that time, I, who was used to having a diamond hand, thought it would at most take a few months to recover, and coupled with the so-called legendary trader GCR's words "hold on," I chose to just wait it out.

The market really did come back in the end, but that was half a year later, and liquidity in the market only improved significantly in November. After the positions in SEI/ARKM dropped two to three times, I finally broke even. It was too frustrating to just break even, so I chose to wait a bit longer. As a result, the big drop in early December and the hawkish statements from the Federal Reserve in mid-December shattered my hopes. In the end, what I was waiting for was just a dream.

Looking back, one should set a stop loss when the market clearly shows a downward trend, even if it means taking a small loss. Who would have thought that being unwilling to set a stop loss would cause assets to drop two to three times over a period of six months, and when the bull market truly returns, it only just breaks even, with enormous time and opportunity costs.

Leverage makes the pressure value pump to the max

The second big mistake is using leverage with "staking loans".

The cryptocurrency market itself experiences significant fluctuations every day. If you misjudge the direction of the price movement and fail to stop loss in a timely manner, it is often easy to incur substantial losses. As mentioned earlier, after some of my positions were trapped, I chose to stake and borrow, borrowing U to buy coins and lower the position cost.

After patiently waiting for half a year, the bull market has indeed arrived, and the position has already shown slight profits. However, I misjudged the sustainability of the market and did not expect that December 2024 would be the peak range (at that time, many prominent figures in the market predicted that the bull market peak would appear in Q1 2025).

When there is leverage, you should take profits faster.

But the editor wants to wait, and as a result, another major pullback comes. The price of the coins continues to drop, putting immense psychological pressure on positions. The editor generally sets the liquidation price for staked loans at 50% of the current price of the coin (the editor believes that this price will not be reached), but still did not expect that when market sentiment is pessimistic, the price of the coins would drop so quickly.

There is a cryptocurrency whose liquidation price is only 0.1 dollars away (a further drop of 10%). I couldn't sleep all night (after thinking it over, I still sold the coins before falling asleep to pay off the loan position). The next day, I woke up to find that the price had not dropped below the liquidation price and had rebounded, but I was forced to cut losses in this wave, resulting in significant losses. What was originally a decent profit turned into a loss, severely affecting my capital.

Not understanding stop loss, forced to cut losses after a big drop

The third big mistake is not understanding the take profit, always thinking that the market will have continuity.

The market trend in this cycle often sees a rise for a month, followed by a prolonged period of inactivity for several months, and then another month of growth before stagnation. The sustainability of a bull market is very poor, making it very suitable for swing trading. However, choosing to hold with a diamond hand and not selling can easily lead to severe losses.

The cost of BERA was $3 initially, and then the market soared, all the way to $4.7. The editor thought that the rally should be sustainable, and then bought it after the pullback to $4.4 (immediately after the news of the Sino-US tariffs), and soon BERA rose to $4.5 for a while, but the editor still did not sell, but chose to mention Infrared to do LP pools, stake interest, and win airdrops.

The annualized rate of Infrared is indeed high, with daily interest reaching hundreds of dollars. However, the average holding cost of BERA is $3.5, which is not low. In addition, the market's continuation was misjudged. When it clearly dropped to $4, it should have taken profit and exited, but the editor thought it wouldn't drop so quickly. When it fell below the editor's cost price of $3.5, it seemed too unworthy to sell after retrieving it from the chain, so they chose to wait and see. As a result, BERA's price continued to break through key levels of 3.2, 3, 2.8, and 2.6, and even eventually fell below $2.2.

The editor finally couldn't help but take a large position loss of 30%, choosing to cut losses, and it turned out to be exactly at the bottom range.

What’s even more tragic is that there is not a very clear understanding of the PoL mechanism during times of liquidity scarcity, and the slow actions of the BERA team were not addressed in a timely manner, resulting in the staking interest being insignificant in the face of large unrealized losses.

Almost all the money that was once earned by luck in BERA (as shown in the figure below), along with most of the principal, has been returned to the market.

Summary

In the last cycle, the exaggerated price increases of several times or even dozens of times in the crypto world are still unforgettable. This has led to the current market players (including myself) having overly high expectations for the returns in the altcoin market. The mentality is restless and eager for success, always hoping to achieve it in one step is impossible. Accumulating small victories into a big victory and letting go of those so-called "unwillingness" to avoid significant losses might be the true way.