The Time I 'Averaged Down' My Way to an Expensive Lesson on BTC

We all have that one trade, right? For me, it was late 2021 into early 2022 on $BTC. I'd done well in the run-up, felt pretty good about myself, and then the inevitable cooling started. Instead of respecting the clear downtrend that was forming on the daily, I kept telling myself, "It's Bitcoin, it always bounces back." Each leg down, I saw as a 'buy the dip' opportunity, effectively averaging down my cost basis as the price kept falling through what, in hindsight, were pretty obvious support levels. My position size just kept growing, and my stop, which should have been hard and fast at the first sign of a breakdown, became a mythical creature I was always about to set. The mental gymnastics were Olympic-level. It wasn't until I was significantly underwater, with a position far too large for my comfort, that I finally capitulated, taking a chunky loss that more than wiped out my previous gains. The lesson? A downtrend is a downtrend, regardless of the asset, and averaging down into a falling knife without a pre-defined exit is less strategy, more prayer. And prayer, as it turns out, is a terrible trading plan.