Thanks Dave. That's sound advice from a sound financial planner. I will listen to my wallet and stay patient.
I have been mulling over this thought though. I understand the concept of average down, but if the price drops way below your entry point, wouldn't it make more sense to take a stop loss and buy in at the new low point? For example, entry point was $1.7 for STEEM and it dropped to $0.80. Would it make sense to sell and re-buy at $0.80 so you can reap the benefits of the $0.80-$1.70 range when prices increase instead of waiting until the price crosses $1.70 to being to see gains? The additional cost is the .005% trading fee. Is my thinking flawed?
well it would depend on where you placed your stop loss and assumes that you would buy back in cheaper. Many think they can do that, but really can't. So for instance, let's say you sold at $0.85 stop loss right now and said "I will buy back in at $0.80".... It is like your other trades, you might or might not get it right. If you do then you save a nickel, if you don't get it back at $0.80 because it doesn't go any lower than $0.85 then you will be out and forced to either 1) not get back in or 2) pay more to buy back when you realize that. Most people do number 1 when they use stop losses, so be very careful of letting the price dictate your investment thesis. The market is a pretty cruel animal and she can and will take the most people for their money. So the best thing is to always know your objectives, then from there you can plan a good strategy! :)
I am happy to answer other questions if you have them, I love helping people understand these things Mello!
Thanks Dave. I like that you said "so be very careful of letting the price dictate your investment thesis." I try to be very aware of this when i am unlucky to see a 10%-20% price drop unfold right before my eyes live and it's hard not to react. It all happens so quick too.
The market is a cruel animal, but the volatility is what i like about it, i think, haha. I can have different strategy for different coins, but mostly i try to keep in simple and manageable and stick with only coins that i really like to own.
That's definitely how to do it... Number 1 rule I tell everyone in the beginning is: Be comfortable with what you own. If you are not, the market will get you for sure!