BlockBeats news, on December 25th, top trader Eugene Ng Ah Sio released his recent trading summary, stating that after perfectly long BTC from $102000 to $107000, I have decided to transfer this profit to long positions in SOL and the SOL ecosystem. At that time, the entry point provided a moderate risk return ratio (r/r), specifically: a long position of $220 for SOL, $2.75 for WIF, and $0.037 for BONK. This is based on SOL's strong performance in low time frames (LTF) and the confidence brought by the success of previous transactions. When the BTC market began to turn at 108k, I didn't like the trading performance of some meme coins, so I decisively liquidated the underperforming assets and accepted an acceptable loss (which was the right move). However, I did not liquidate SOL's position, but instead chose to increase it from $20 million to $30 million. This led to the formation of the first error.
Error 1: Failure to stop loss in a timely manner: Typically, one of my strengths is the ability to exit a position in a timely manner when it begins to lose strength, in order to avoid greater losses. However, this time, I chose not to cut losses when SOL fell to $215, even though I believe the market will experience downward volatility before and after the FOMC interest rate meeting. My bias overwhelms logic, and the psychological excuse I use to comfort myself is that $200 is a key support level for SOL, and it's very close. I don't want to be "cut off" by the market for trying to capture the 5% volatility. When SOL fell to the support level of $200, I further increased my position from $30 million to $45 million, citing the best risk return ratio at the high time frame (HTF) support level. I don't think this is a mistake, but it does make the already complex situation even more dangerous.
Error 2: Ignoring Stop Loss Point: When SOL falls below $200, the clear action should be to close the position according to the plan. However, I choose to continue holding because the position size is already so large that if I close it at this time, it could trigger a waterfall drop in SOL prices to $190 and disrupt the entire chart. At this point, I began to hold onto 'hopium', thinking that 'perhaps there will be a downward trend that falls below the support line and then rises again'. This psychological state is definitely a red warning signal, I will pay special attention to it. In addition, when the price fell below $200, I added leverage in the range of $187 to $193, expanding the position size to nearly $60 million (total account leverage reached 1.2 times). This is obviously a wrong operation, but as you can see, the errors are starting to stack up. Fortunately, there was no complete 'black swan' event, and I did not receive any greater punishment for it. The right place to do it: When the floating loss reached 7-8 million US dollars, I decided "enough" and decisively cut the loss. I liquidated 70% of my position at $193, which freed up cash for me to rebuild positions at the final bottom, including ETH, ENA, PEPE, and WIF, almost hitting the lowest point. After the transaction: Ultimately, the actual profit and loss (rPNL) of this transaction was a loss of $6.2 million, approximately -10.2%. Since then, I have executed 13 trades, all of which have resulted in profits, essentially making up for this loss. I think this is a great example of how a transaction can go wrong from the beginning, and then the mistakes continue to stack up, ultimately becoming very bad, especially when the 'sunk cost mentality' prevails. Fortunately, I was able to break free from this mindset, which allowed me to trade calmly and accurately at the bottom of the market. This is the biggest loss I have made on a single position in this account, and I will remember this lesson for a long time.
Merry Christmas, friends.
