Top trader Eugene: $60m long SOL, didn't stop in time
Top Trader Eugene Ng Ah Sio published a summary of his recent trades, After going long BTC from $102,000 to $107,000 perfectly, I decided to move this profit to a long order on SOL and the SOL ecosystem. The entry points at the time offered a moderate risk/reward ratio (r/r), specifically: long SOL at $220, WIF at $2.75 and BONK at $0.037. This was based on the strong performance of SOL on the Low Timeframe (LTF) and the confidence that came from the success of the previous trades. When the BTC market started to turn at 108k, I didn't like the trading performance of some of the meme coins and decisively closed out the underperforming assets, accepting an acceptable loss (which was the right thing to do). However, instead of closing my SOL position, I chose to increase my position from $20 million to $30 million. This led to the first mistake.
Mistake #1 Not stopping in time:
Normally, one of my strengths is the ability to exit a position when it starts to lose strength in order to avoid larger losses. This time, however, I chose not to take a stop loss when SOL fell to $215, even though I thought the market was going to move to the downside around the time of the FOMC rate meeting. My bias overrode logic, and I comforted myself with the mental excuse that $200 was a key support level for the SOL, and that it was close enough that I didn't want to get ‘cut off’ by the market by trying to catch a 5% swing. When SOL fell to the $200 support level, I increased my position further, from $30 million to $45 million, on the basis that the risk-reward ratio was best at the High Timeframe (HTF) support level. I don't think this was a mistake, but it did make an already complicated situation even more dangerous.
Mistake #2 Ignoring stops:
When SOL fell below $200, the clear action should have been to close the position as planned. However, I chose to hold on to the position because it was already so large that if I closed it at that point, it could have triggered a waterfall decline in SOL to $190 and destroyed the entire chart. At this point, I became hopium, thinking ‘maybe there will be a downward spiral through support and back up again’. This state of mind is definitely a red warning sign and I would pay special attention to it. In addition, when the price dropped below $200, I leveraged up between $187 and $193, increasing the size of my position to almost $60 million (total account leverage of 1.2x). This was obviously the wrong move, but as you can see, the mistakes started stacking up. Fortunately, there was no full-blown ‘black swan’ event, and I wasn't punished any more than I should have been.
Do the right thing:
When the float reached $7-8 million, I decided ‘enough is enough’ and stopped out. I closed 70% of my position at $193, which freed up cash that I used to re-establish positions in ETH, ENA, PEPE, and WIF at the eventual bottom, almost to the nadir. The final real profit and loss (rPNL) on this trade was a loss of $6.2 million, or about -10.2%. Since then, I have executed 13 trades, all of which have been profitable, essentially making up for this loss. I think this is a great example of how a trade can go wrong from the start, and then the mistakes keep piling up and can end up being very bad, especially when the ‘sunk cost mentality’ prevails. Fortunately, I was able to get out of this mindset, which allowed me to trade calmly and accurately at the bottom of the market. This is the biggest loss I've ever had on a single position in this account, and it's a lesson I'll remember for a long time to come.
Merry Christmas, friends.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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