THETA - Buy the dip! Or sell at loss?Once again it has been a while folks and I hope you are all healthy and well!
The market is still moving in its wide trading range of an accumulation phase and I hope all of you have strong nerves!
We have experienced several automatic rallies, that got rejected at the previously established price levels (purple for weekly and white for monthy levels).
Theta price had experienced a spring (downward movement, followed by a spring upwards) and now we have just seen another shakeout. Remember: Shakeouts can follow after a price advance has started, with rapid downward movement to induce retail traders and investors in long positions to sell their shares to large operators.
As long as the price moves within this trading range, we are fine and I wait for a sign of strength, followed by a last point of support. Usually one should watch out for low volume and diminished spread, which will serve as a confirmation. Finally the price should take off. The only problem is that noone can really say how long it will take, so rather then selling at a loss, I used some of my buffer cash to buy a little bit more and averaged down.
For price target references I use my monthly levels of resistance (white lines) or supply zones (red boxed),
where I will then sell the amount I have just used to average down.
Example: Let's say you bought in at 10$ a coin with 1000$, making a total of 100 coins and then the price fell to 5$ (-50%). You can now rebuy another 100 coins with 500$ and average down your purchase from 10$ per coin to (1000$ + 500$) / 200 coins = 7,5$ per coin (-25%).
Now, when the price goes back up to 7,5$ from 5$ you are out of the previous loss (-25%) and back at 0%, with the option to sell 500$ worth of coins (~66,6) and keeping the average price. Your initial coin size of 100 would increase to ~133,3 with an average of 7,5$ per coin.
That sounds easy, right? It actually is, but the biggest elephant in the room are our emotions... Controlling emotions is a never ending task, which you can get better a by practicing - unfortunately not with demo accounts, but real trading - just start small.
As always, do your own due diligence. This is no financial advice, so trade with care!
For reasons of transparency:
I am invested in $THETA with 1/4 of my account size. The rest is buffer cash for buying dips.
