My costly lesson in chasing breakouts on $BTC
Looking back at the tail end of 2021, I got burned pretty badly chasing what I thought was going to be the next leg up for $BTC. We had a few strong pushes, then some consolidations that felt like springboards. My mistake was incrementally increasing my position size on each breakout attempt, convinced that 'this one' was the real deal. I ignored some clear divergence on higher timeframes and the increasing amount of distribution candles forming.
It wasn't a single wipeout trade, but a series of entries that chipped away, compounded by me moving my mental stops lower and lower, hoping for a bounce that never came with enough conviction. The biggest lesson was truly understanding that even in a strong bull market, chasing strength without confirmation of institutional demand (or at least, a clear lack of supply) at those higher levels is a recipe for getting trapped. Sizing became my enemy; I was letting my conviction dictate position size rather than risk management. Cost me a significant chunk of that year's profits.
Definitely a tough lesson many of us have learned. It's so easy to get caught up in the FOMO when things are pumping, and those incremental increases can really add up. Divergence is such a crucial signal to pay attention to, but it's hard when the narrative is so strong.