Rookie mistake folks. I jumped the gun. In fact, if you read my last few posts, you'll observe that I had this suspicion. I was too impulsive with my Litecoin buy and bought all in at $50. I should have exercised sound discipline as all good traders do and simply started my buy in at this price point. If I would have dollar cost averaged in from there to where we went low (as I expected was possible), my average cost would have been somewhere around $43 instead of $50.
It doesn't feel good to admit your error. But I want to post this so that I am not the only one who learns from it. Maybe I can save others from the same mistake.
Since I am a swing trader (as I mentioned previously), sometimes holding positions for months on end, I don't think I will lose money. I DO THINK we will still hit our $60-75 price target sometime withing the next (2) two months. However, I will be missing that extra $7 per LTC for not being more patient.
Let's take a look back and evaluate my mistake a little further.
Where I went wrong:
My biggest mistake was to allow an underlying assumption regarding Litecoin taint my bias. I had said that Bitcoin will fall before Aug. 1st but because coin purest would be looking for alternatives, I had thought that Litecoin would hold the $46 support as Bitcoiners would now move their money into Litecoin. While some of this did happen, it was not to the extent I had expected. Litecoin did not hold it's $46 support.
Where I was right:
I had said that if we fall further the bottom of the Bollinger Band and 50 MA would help give us a lift. It did.
What I've learned:
How much this whole crypto market still follows and is heavily, heavily influenced by the price action of our leader, Bitcoin.
Where we go from here:
I do believe Litecoin has neared it's bottom at $34.78. You can see from my green channel that there is still more room down in the short term (next 4 days), however, I don't think well get there.
GOOD NEWS: We are still in the green channel, which means the bulls are still in control of Litecoin, unlike with Bitcoin.
Thank you for the chart! Hopefully will help a ton of people
BlackestSheep
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Thanks for the analysis
zero966
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If you´re wrong exit a trade immediately with a calculated loss and try again at a better spot, with still your money at hand. Holding a large postion without SL or bailout plan will give you a very high chance to crash the account at one point. That´s suizidal behavour money wise. I saw it with a lot of People in forex already and crypto is no other game. Anyway, good luck with your position but now you need strong nerves
stewdamus
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@zero966, Thanks zero. Yes, I normally would have exited. Problem was that I was on vacation in a spotily networked area. I didn't even look at the price until I got back. It's no big deal. Like I said, I'll just have to miss out on an extra $7 per share while we go up.
Cryptosmart
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Litecoin is still a BTC 2.0, proven over past 5+ years and solid development team members. Transaction times and cost are the biggest advantages of Litecoin and not yet priced in current market value. Europe and Asia really love this coin (check volumes) and sure the rest will follow. Would have expected more movement from BTC to Lite but BTC tech uncertainty in market will be ongoing and LTC will profit form this. Great moment to buy more I did, and I'm not the only one. I see a bright future, its silver heavily underpriced, just wait a littlebit longer.
stewdamus
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@Cryptosmart, yes. I think you're right. The silver of crypto. Thanks for your comment.
nakov
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@Cryptosmart, I know LTC has a lot of fans. It may have a great future, but based on its past...it's just simply a clone of BTC living on its reputation as the silver of crypto. Other than Segwit, I don't know it has accomplished something to brag about. Transaction times and cost are better in many more coins. It's not a factor. Lightning network, smart contracts, atomic swaps - when/if they get integrated in LTC, then I will agree with you.
Cryptosmart
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@nakov, I think you underestimate the power of acceptance (fanbase), or how widely a coin is known and traded/used as value storage. Past and trackrecord for sure is important here. LTC might be not be best (as BTC) it is still better equipped than BTC and with the big + that Asia really is found of this coin. Also the developments in Singapore and dedication and skills of Charlie and the main team is keeping me on board for the future. Furthermore BTC uncertainties wont end after first of August, which is also a reason I swapped some more.
nakov
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@Cryptosmart, OK, fair enough! I respect that. Good luck!
nakov
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I don't HODL any LTC anymore. Sold them all at the Segwit event 2 months ago. Why? I have been too long in this to know, that LTC is just a poor man's BTC. It doesn't serve many purposes as of now, unless Charlie Lee really integrates some form of smart contracts in it.
Regarding your error, Phil, and of mcnab_54. It is all about Fundamentals here. TA might be brilliant, but fundamentals is what matters in this move.
Namely: LTC had his short wave of fame with its Segwit activation. C00L. Then all of a sudden it started rising vs BTC (and USD more or less) when BTC started falling the second half of last month. I was wondering - WTF - why now? What happened. 1 thing was Charlie Lee leaving Coinbase to devote himself to LTC. But it's still not enough. LTC is still LTC, even with Segwit.
So, I had an insight: because of the hardships and uncertainty in the realm of Bitcoin! Many people (in China mostly) remembered it is the 2nd coin after BTC, its clone, gold's silver and said to themselves - let's use it as a hedging strategy in case BTC splits in August! And they did. But yesterday really good news came out that most miners are ready for lock-in of Segwit 2x, and hence a chain split is all but non-happening. So, BTC started climbing fast, LTC/BTC started falling, as a result LTC/USD too. It was clear from the beginning that LTC was BTC's backout plan for the chain split.
So it's not your fault in your TA, it's just...sometimes Fundamentals matter.
What you could do - buy LTC lower in portions to cost average and you should break even.
The better the news for BTC, the lower the price of LTC.
I think it has a stable bottom at around $25. Maybe up to $35. Anyway, I am not that interested in this coin, just my observations, mostly from the btc-e trollbox (the most zealot fans of LTC around). So take your time buying in portions to average down the purchase price. Key date for BTC...and LTC is August 1st. But even before that, Segwit 2x results would show in which direction LTC is going. All crypto is, as you said Phil, heavily, heavily dependent on Bitcoin.