Quote from: Peter Lambert on May 02, 2013, 12:32:12 PM

Quote from: samson on May 02, 2013, 12:23:14 PM

If someone bought some BTC at $140-150 they are not 'weak' for selling when it's obviously crashing out from underneath them even if they sell at a loss.

Only a stubborn fool would hold onto a bad investment when it's obviously crashing / collpasing in value and you can buy more back cheaper if you sell and potentially make much greater profits in the long run. Knowing when to sell at a loss is very important thing to know. The key is to decide whether it's just a large fluctuation or a much rarer collapse.

For example : If you purchased 100 BTC at $150 and sell them at $115 you initially spent $15,000 and end up with $11,500, a loss on that trade of $3,500.

If the price goes down to $80 you will end up with 143.75 Bitcoin (instead of only 100) assuming you buy back in at $80.

Then you only have to sell at $104 to break even and you have more Bitcoin so as the price rises in the future you will make much more profit than had you been 'strong' and held onto your initial Bitcoin like some kind of idiot while the value crashed through the floor. By the time the price rises back to your initial purchase price you will have much more profit by doing this.

Except, you never know when the price will change direction, and how far it will go. What if, in your example, you purchased 100 BTC at $150 and sell them at $115, and then the price rises back to $200? Now you have no btc and $3500 less than you started with.

Presumably one would buy somewhere along the way....