ok now imagine you filled at 1195 and it went on crashing to $300 and stayed there. draw a graph explaining how you guarded your money then?
+1 to this.
Anyone who thinks that an attempt to call the bottom is NOT putting their money at risk is delusional. Almost every trade that has a predetermine short term outlook, such as buying a dip and expecting a flying bounce or "miring" to get out, is putting money at risk for a short term reward.
You either invest for the long term, or you take on huge risk day trading to get many short term big rewards with big risks. There is no magic formula, no matter how many "after the fact" charts you post.
-Mike
At least have the decency to respond what OP actually put forward: not some magic way to protect your investment against all possible outcomes, but a way to describe how you should trade, or more precisely: how your expectations of price movement should guide your trading actions, and how you should cut losses accordingly.
That's trading 101. But the rather asinine reactions posts like this get in here make me think it's a class many here still need to take.
Finally, what a moronic dichotomy you put forward there: you either HOLD FOREVER!, or you GAMBLE IT ALL AWAY.
In the real world, some of us are interested in increasing their total amount of coins through (relatively cautious) trading of the swings. What OP described is a basic technique to get there: cut losses. don't give up profits too early. That's about it.
The OP did not explain how to protect your investment against all possible outcomes. Heck, he wasn't even talking about investments! He got in and out in under a day. That's not investing, its trading. Get it right. Second, it was not all possible outcomes, as piramida said, it could have tanked further and he would have caught a falling knife. The equivalent of sending your cash out as the front line foot soldiers. Not really protective. So what he did was plan to lock in gains if it goes up and levels out, or make a killing if it rocketed, or have no plan if it continued to tank.
You either set and objective and limits both ways and trade that, or you invest with a long term outlook based on fundamentals.
Plant the trade and trade the plan. But don't confuse trading with investing. And certainly don't confuse protection with locking in gains.
- Mike