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Buy low, sell high: A GameStop horror story


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I came across this on Twitter. It's pretty heartbreaking. I know there are similar stories of people taking huge losses on the XRP 'pump' a few days ago too. This is why if there is only one golden rule in buying crypto, it is buy low, sell high. The mistake that most retail traders make is buying high when the hype is at the peak, and selling low during the 'capitulation'. This is literally the opposite of what we want to do. Below the image I will post some charts to illustrate my point and explain further.

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So sad. Bought at 460. There's the mistake. Put aside fundamentals, and hype, and future predictions and anything like that. Literally the only thing I am talking about in this post is the actual price you can see on the charts. This is where these people bought.

bOqgmsRB

Looking at the historical range on the chart, this is a bad place to buy. Hindsight is 20/20, but I'm not talking about hindsight. I'm talking about looking at the chart when the price is 460, seeing where we are in the range, and realising that we are high. Don't buy when we are high.

This is where I bought ADA.

DeI8AWe8

I'm saying this not to brag or say how amazing I am. I can tell you honestly that the only reason I bought ADA there is because it was low. I didn't have much faith in IOH or Charles Hopkinson or whatever. I still don't have that much faith in the project. It wasn't a fundamental decision at all, it was purely a price decision. At that point, with the range we had on the chart, with a low of 0 and a high of 1.4 dollars, 4 cents was pretty low. 

This is BTC. 

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One of my friends is a BTC maxi. When I tell him be careful, we are high, he says 'yeah but we might be at historical lows' 'a bank recently predicted EOY price of BTC at least 60k with a high of 300k', 'you don't know how far it will go'.

This is right, I don't know what how far it will go. But I know how far it's been, with 100% accuracy. I look at this and I see a bad time to buy, not because I don't think it can go higher, but the probability is that it will go lower for a while. If your holding limit is 100 years, then sure you are not gonna have an issue, but if you are buying expecting something to go 10x when it has already gone 10x, you are not playing the percentages. We all know where XRP is in the range, which is why I said a week or two back that it is a bad time to sell.

To make the psychology and prediction point again. This is Avalanche (AVAX). I bought here around 5, 6 and 7 dollars. At that time this was high in the range that we had, and was pretty risky. Now it has gone higher. I actually DO think this one will go much higher, and am nowhere near the point where I want to sell, but I am absolutely not buying more here. Why? Because we are high. I think we will go higher, but I know with 100% certainty that we are already very, very high. 

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What would it take for me to consider buying more? Something like this:

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If it comes that low, I will consider buying more, because we will have started to create a new range and (depending on price action, of course) we might be near a low. At least, we won't be at the very, very top. Again, by 'the top' I mean the top we have on the chart. Not what I think it will be. Not what Elon Musk thinks it will be. What is there on the screen.

We all know this last chart.

bpGoFOBN

It explains itself. Of course price is not the only factor here. Time is also important for many of us. If you are comfortable holding for 10 years, then the chances of the XRP price being higher are pretty good. However, as many noted in other threads, there is an opportunity cost. We have talked about diversifying and many have pointed out the dangers. The biggest danger of diversifying is selling something at the bottom and buying something at the top because it looks attractive right now.

Does this mean you can never buy something after it has already moved? No. It just means the risk keeps increasing the higher you go in the range. Even with XRP now, we are pretty high in the recent range (say from 20 cents to 70 cents, we are currently at 45) and so I am not looking to buy. If we fall lower, low 20s, even 10s then I will be buying absolutely.

I've been in crypto for years and this one rule has basically saved me. I could hold XRP all this time because my buy in is low, and so I have almost never been in the red. This has made things much easier because I knew that at almost any point I could cash out and all I would've lost was time. I have violated this rule twice. One was buying more XRP around 50 cents in order to get more FLR airdrop. Another was buying ETH here, at around 800

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I held, considering it lost money. Now I am selling but only at 2x. Of course that same money put in under 100 dollars would be 17x right now. Live and learn.

 

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I came across this on Twitter. It's pretty heartbreaking. I know there are similar stories of people taking huge losses on the XRP 'pump' a few days ago too. This is why if there is only one golden ru

This highlights a massive problem with this generation. No personal responsibility. Always trying to blame someone else. This guy is 100 percent responsible for what happened, it's not the big bad hed

Are you a bot?  The weird communication and talking in circles doesn't get you trough the turing test imo. 

Reckless behavior to go all in with life savings through an impulsive pump all the while taking his innocent wife out with him as collateral damage. Also doesn’t sound like he is holding himself accountable for what he did by blaming everyone else —- makes it harder to sympathize over.

Edited by ManBearPig
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13 minutes ago, ManBearPig said:

Reckless behavior to go all in with life savings through an impulsive pump all the while taking his innocent wife out with him as collateral damage. Also doesn’t sound like he is holding himself accountable for what he did by blaming everyone else —- makes it harder to sympathize over.

I mean I get that to an extent, he was incredibly reckless, but there were also people online saying they'd gone all in and made millions. If a man was desperate it is not hard to see him hoping for the same. Of course he got in too late, which is why it is a bad idea to buy things when people are hyping them online and why I don't like Elon Musk doing things like talking about Doge or putting BTC in his bio, because I guarantee you he didn't start buying at the top. He's smart enough to know that's a bad idea.

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Do these people not realize it's a zero sum game? It's like they literally just handed over their money to the wealthy hedge funds. Yet they're acting like they're doing some type of greater social good. That's the part I don't understand.

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41 minutes ago, xrp_sea said:

Do these people not realize it's a zero sum game? It's like they literally just handed over their money to the wealthy hedge funds. Yet they're acting like they're doing some type of greater social good. That's the part I don't understand.

I don't see it as significant different from the people buying BTC right now and saying they are doing it because BTC is gonna set people free from the global financial system. They wanted to get rich quick. It's not that different from crypto.

Also you buy BTC at 41k, who do you think is selling it to you? It's not your fellow freedom loving cypherpunk.

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14 minutes ago, Seoulite said:

I don't see it as significant different from the people buying BTC right now and saying they are doing it because BTC is gonna set people free from the global financial system. They wanted to get rich quick. It's not that different from crypto.

Also you buy BTC at 41k, who do you think is selling it to you? It's not your fellow freedom loving cypherpunk.

I see your point to a degree, but I also see a lot of differences. WSB is coordinating group pumps, targeting stocks like GME whose fundamentals don't even come close to supporting the pump price. These PNDs don't don't create any real value. One's gain is another's loss and vice versa. To make things worse, they advertise their plans to the world making it so easy for others to take advantage. It seems that they are preying on people that are financially uneducated. Crypto, on the other hand, is creating value and solving real world problems. BTW, I haven't bought BTC since 2013. I'm good. :)

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9 minutes ago, xrp_sea said:

I see your point to a degree, but I also see a lot of differences. WSB is coordinating group pumps, targeting stocks like GME whose fundamentals don't even come close to supporting the pump price. These PNDs don't don't create any real value. One's gain is another's loss and vice versa. To make things worse, they advertise their plans to the world making it so easy for others to take advantage. It seems that they are preying on people that are financially uneducated. Crypto, on the other hand, is creating value and solving real world problems. BTW, I haven't bought BTC since 2013. I'm good. :)

There is one fundametal problem with that, there are no metric that will define real value, or formula to calculate value, this is why market exists at first place.

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1 hour ago, Seoulite said:

I mean I get that to an extent, he was incredibly reckless, but there were also people online saying they'd gone all in and made millions. If a man was desperate it is not hard to see him hoping for the same. Of course he got in too late, which is why it is a bad idea to buy things when people are hyping them online and why I don't like Elon Musk doing things like talking about Doge or putting BTC in his bio, because I guarantee you he didn't start buying at the top. He's smart enough to know that's a bad idea.

You do not understand one thing, Elon or alike have enough money to buy now "at the top" than DCA for another decade, than pump it and exit, or keep yet another decade. They have money. They think different demensions, for them 10k is like for you 10, ok 100 bucks. You desperate to make bucks now, this minute and therefore you go through a lot of gaps fillings, they really do not give a shit, they buy 10M worth of BTC like some jewellery and forget about it.

So, the only rule: do not put that you can not afford to loose.

If you follow that than you can be red for decades and get your pump just a day before retirement.

Edited by xrp-nuke
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19 minutes ago, xrp_sea said:

Crypto, on the other hand, is creating value and solving real world problems.

I agree with other stuff you said but this here is specifically why I said BTC. BTC doesn't solve any problem and is not useful in the real world. I don't think the value reflects the fundamentals at all in this case.

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5 minutes ago, xrp-nuke said:

You do not understand one thing, Elon or alike have enough money to buy now "at the top" than DCA for another decade, than pump it and exit, or keep yet another decade. They have money. They think different demensions, for them 10k is like for you 10, ok 100 bucks. You desperate to make bucks now, this minute and therefore you go through a lot of gaps fillings, they really do not give a shit, they buy 10M worth of BTC like some jewellery and forget about it.

I agree it doesn't matter to him. But he's smart enough to know that it's a bad idea for all the people who follow his twitter and decide to buy BTC. If he'd put BTC in his bio at 3k then I would be behind it. But he put it there at 33k. 

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