It was back in 2021, when $BTC had that pretty significant flash crash after a strong run. My thesis was still intact, I believed in the long-term fundamentals, and I saw the dip as a genuine opportunity. The problem wasn't the thesis, it was the execution, specifically around sizing. I'd been patiently waiting for a deeper retracement to add to my position, but when the dip happened, it was sharper and faster than I'd anticipated. Instead of sticking to my predefined entry strategy and sizing, which involved scaling in over a period and at specific price points, I just started buying aggressively into the falling knife.
The initial buys were fine, but then FOMO truly kicked in. The price kept dropping, and I kept buying more, exceeding my usual risk parameters for a single asset. I told myself it was an 'exceptional opportunity,' which is often a red flag. My average entry kept moving down, but my overall position size became disproportionately large relative to my portfolio and, more critically, relative to the amount I was comfortable losing on that specific trade. When the market eventually stabilized and bounced, it wasn't enough to put me in profit on that oversized block. I ended up having to trim some of that excess at a loss just to bring my exposure back to a manageable level, essentially turning a potential gain from the initial, disciplined purchases into a wash due to the later, impulsive additions. It hammered home the importance of sticking to a pre-defined sizing strategy, especially during high-volatility events, and not letting 'exceptional opportunities' override basic risk management.
