This would produce the most gains , but if you predict wrong you could be stuck waiting for the price to either come back up or down to get back in. I did this the other day. I sold and bought back in at what I had predicted was going to be the next upswing. However some last second sellers swooped in and dropped the price below my limit. Then it just continued to fall from there. Now I sit and wait for the price to come back up to my purchase price so I can get back at it. I hate waiting. I get antsy. I should have left some money in reserve so I could have at least bought in at the bottom. I got greedy. Now I wait. 
Interesting. I don't go all-in when trading, but that's not because I'm scared of my investment losing its value. When I invest in something, I'm very sure it'll make me some money sooner or later, or benefit a project I love.
Sadly, there is an other factor that limits me: The incapability of exchanges, wallets and more. It's sad how many exchanges either get hacked or turn into scams (like HitBTC). It's a very dangerous practice to bet a lot of money on something influenced so much by exchanges potentially stealing your money. Of course, you should take your money off an exchange as soon as you're done trading, but there's still the deposit, withdrawal and the time between those 2 for the exchange/hackers to steal your money!
There's my very simple reasoning as to why I don't go all-in. Another reason is when I feel like 2 coins are capable of growing a lot and I don't want to choose one that grows just a bit whilst the other grows tons. Diversification can help me avoid those opportunity losses as well, though I would obviously sacrifice some potential profits.