I may prove out to be the dumbest person in the history of crypto, but I just sold my Solana...SO STUPID!! You see, it reached my target and triggered my limit sell order, but before you decide to lambaste me...hear what I have to say.
I really like the Solana ecosystem, and have written about it exclusively as well as added blurbs in other articles. I bought it throughout 2021 all the way up to around the $44 fiat price point. My bag wasn't as big as I would have wished in retrospect, but it was mine.
Why The Heck Would You Sell?
Well let's clear the air, so I don't get accused of clickbaiting. I didn't sell my entire bag; I sold my cost-basis.
Solana has been on an absolute tear and in price discovery for a few weeks. I think it will most likely go higher, (in fact it has gone up another 7% since my sell) but I made a plan for my SOL and had to stick to it. There are certain projects that initially peak my interest- I buy into them because I believe in the project and/or I think they have good fundamentals and are undervalued. Solana checked the boxes; I liked the project, saw it as undervalued, and wanted to catch the price appreciation.
My plan for selling was always at the 300% appreciation. The problem was I kept seeing it as undervalued, buying more, and subsequently having to adjust my exit strategy based on my cost-basis. I deviated from my initial plan several times because I was able to convince myself that its perceived value was significantly more.
Based on its current market cap though I needed to adjust my thesis on the coin, factor in diminishing returns, and do one of the most difficult things a Hodler can do... Sell and take some off the table.
I drank a ton of caffeine this morning and discovered that my fingers kept typing as thoughts invaded my head. Therefore, I am going to pivot a bit and offer some more context for my thought process and individual investment strategy.
I consider myself a hodler of both crypto and stocks and I do some swing trading; I still consider myself a newb because there is always something to learn (right now I'm on an NFT learning kick). I'm not a genius investor nor will you get some unimaginable insight from my ramblings unless you are brand new to the space- I simply read a lot on investment strategies in TradFIN and in cryptoland. I do however attempt to occasionally offer a few logical and practiced methods in my writing. This is isn't rocket surgery so here's a few things I do:
- Be a long term holder of good projects. You can probably stop reading any of my tips below this one. I was going to save this one for last, but in my opinion its the best advice I can give anyone and I didn't want it to get lost in reader fatigue. Step 1: Find a project with great fundamentals, active developers, good community, and a growing ecosystem. Step 2: Latch on, DCA in, and hold on for a few years because it will eventually break out.
- DCA in and DCA out, don't spend your wad all at once and don't kill your bag in one sitting
- If your a long term holder like me, sell a portion to cover your buy-in when it gets to the 3-4X level. This gives you a nice sized free bag and you can move those funds into other projects. If you have read Rich Dad, Poor Dad you will understand this common sense notion. Although he used to recommend selling half when it doubled- I'm just too greedy and like a bigger bag.
- If we see what appears to be a blow off top then take more off the table, but leave at least 20% in case in your coin continues to go up. This can include local tops and individual coins too, because not everything moves at the same time. Eventually even Solana will need to come down from the stratosphere for oxygen- the air is thin up there!
- Have a plan in place for every coin you own and revisit that plan to validate/invalidate your initial assumptions- in my case with Solana it reached my targets several times and I needed to adjust my plan based on what I believed.
- Don't be afraid to cut your losses. If your plan didn't work out then move on to other projects. I did this with Harmony One earlier this year and it initially cost me thousands, but I was able to reprogram those funds into other projects that have performed better overall. I still like and own some Harmony because I don't sell all of my bags, so when it starts performing I will be able to take advantage of the price action.
- Take risk out of the equation. Once I start taking back my buy-ins and roll profits into other projects it reduces stress or worry. Pretty soon I'm no longer risking any of my hard earned money; I imagine that is one of everyone's goals here...to make our money make us money.
- Don't risk your basic necessities. I won't tell you to not risk more than you're willing to lose, but everything needs moderation- even a crypto addiction. If you have the choice between minting the next BAYC or buying a brand new PS5 then mint baby, mint! If it is between your rent or that hot NFT then just don't be stupid.
Back to Solana
I have to admit that it hurts to sell into an exploding green candle. The what-ifs will eat your liver if you let them. But you have to have a plan for your coins and I had one for my SOL. If my assumption is correct and this is a local top then we will see a healthy retracement in the near future. I can rebuy and get more coins if I choose to. If I am wrong and it keeps mooning, then I still have a big FREE 66% bag that's going to keep skyrocketing allowing me to put that inititial investment towards that $FLUX node I have been coveting.
My actions may seem stupid, but my overarching goal is to continue to create generational wealth for my family. At least by having a plan I can decrease my risk profile and let my funds work for themselves.
Thanks for reading and following; I apologize for the coffee incoherence and the horrid cover meme!