Last night taught me a valuable lesson.
Since I don't have a lot of resources in the game, I've been playing the smaller coins (litecoin and namecoin in particular). I was focusing only on making my bitcoins grow and kind of ignoring the cash out value of bitcoin.
So when the rally on bitcoin began last night, I wasn't paying attention and I had my resources tied up in light coin. Anyway, everyone tried to liquidate their litecoins as quickly as possible to get bitcoin to capitalize on the rise. Anyway, it fell so far, I couldn't liquidate without eating a loss larger than I wanted. (Though had I acted immediately, I probably could have come out ahead). So I waited, adhering to the wisdom, "buy low, sell high." But what if the high you need to turn a profit never comes? And still I wait.
The irony is - I'd only be losing a couple of hundredths of a bitcoin, but still it chafes to have been caught upside down and locked out of benefiting from the bitcoin rally.
So what are the take away lessons here? No matter what coin you're trading in, pay attention to bitcoin, if it starts to rally everyone is going to liquidate to get back to bitcoin. And if you see it happening, you liquidate too before the value drops and you get caught upside down. Patience may win out in the end, but there would have been much more profit in acting.
Ah well, I'm new at all this. Lesson learned. :) If it ever looks like I'm going to be caught upside down again, I'll get out as close as I can to my buy in as possible and then set a high buyout price on the bitcoin side. Because, as it turns out, he who hesitates really is lost.
The saddest part is... the margin in trades had become so stretched out and taught, I knew something was about to happen. I could feel it... but instead of parking my coins as instinct warned me... oh no no, I had to ignore my gut. Same mistake I've been making my whole life.
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