How can you manage potential losses during a crash

[boboking]

This is mathematically correct  but we are not living in a perfect world this strategy is really dangerous and most likely you will still lose money.

If you want to average down do your best to understand the charts and try to average down you can also always short bitcoin if you think that the price will continue to fall down.

[zanezane]

Disclaimer : I do not follow this strategy with credit, but rather with disposable savings. I would not recommend this strategy for people who are funding their Bitcoin investment with credit.

It is a very bad idea to fund any investment with credit and any other form of debt. Bitcoin is a very high risk investment and this strategy fall in the same category.

DO NOT fund your Bitcoin investment strategy with DEBT!

We can't actually blame the people who'll loan to others just to invest in bitcoin now because the price tho is really tempting to buy and I guess no one wants to be left out before it goes to the moon again. However, when we loan some money make sure you'll return it in time and of course don't make it a habit,

[w33man]

Well, in every failure that I made, I'd rather choose to start all over again than stop and accept the fact that I've failed. It is better to try again because it is just one opportunity that have been lost, and there are millions of opportunities out there that is waiting for all of us. So, I prefer to stand up and keep on trying until I succeed.

[leea-1334]

I do not really have the solid numbers but I feel it is not a good strategy in the long run,,, especially since I use the charts of a couple of coins I look at. Imagine if you did this at the start of the "crash", you would have kept buying coins as they got lower, and by now ran out of funds as the prices kept going lower. Of course, if they all rise again, then you suddenly become a genius for making more with each rise. But the real genius would have been the one who used stop losses, and bought in at the very bottom.

Stop losses are the only way to limit and manage losses.

[gabmen]

This is mathematically correct  but we are not living in a perfect world this strategy is really dangerous and most likely you will still lose money.

If you want to average down do your best to understand the charts and try to average down you can also always short bitcoin if you think that the price will continue to fall down.

Well it may work a little if you have the whole day and all.of your time watching the market waiting for those mini ups and down but in general, yeah its still better to keep steady. It may take a but longer but eventually you'll still catch up with your losses once btc starts moving positively

[nightfury]

While already losing because of a crash, hodling is my only option for whatever cryptocurrencies i have in my portfolio. I know that their prices are affected due to bitcoin's crash but i can still wait until bitcoin come back again.

[metenjean]

I think this was a good suggestion, rather than doing nothing and wait until price return to ordinary buying price. Its one of a plan to cut your losses short, i do basically cut my loss when price dropped below $10k mark, some people tend to did partial cut losses like this strategy, but i tend to cut all in a single order rather than doing that because its hard to do partial order and you should glue yourselves all day in front of the computer in order to do this kind of strategy 

[budakjawa]

there is nothing we can do that we can do can only wait until the price back to normal and be patient not to be easily provoked emotion or affected with others. patience is the key.

[fabiorem]

OP had just explained how bear markets work.

Any doubt we are in a bear market?

[pogiparin]

My suggestion for this one is to liquidate your assets as soon as possible. If the decline is consistent then do not expect that the prices will go up. This will minimize your losses but for real estate assets the trend could be different. After a flood or a disaster, the prices will definitely go down but give it 3 to 5 years max and your losses would lessen.

[di.ako.toh]

I think you can feel it if you think that crypto is starting to crash. Through being updated and awareness , you could prevent your financial losses anytime. Kust be knowledgeable enough, and do some points of alertness in the crypto market

[yamortsac]

If you know you will incur a loss if you sell your coins during crash then it is better to hold it and wait till the price go up to avoid such losses. While you still holding your coins even the price value is low, you still have no loss because it is still yours and has the possibility to increase again to gain profit.

[rickadone]

A lot can happen in 20 days that will mess up your theoretical strategy! What if a huge negative news comes in and the price drops $1500 or more, and then instead of recovering the following day, it drops $500 more! How does one use your suggestion to counter the loss especially when fear leading to panic selling is stronger than most strategies in a bearish market?

A lot can even happen within 1 minute when there is a huge dump or panic sell based on some expectation in the market. Sure, he may have dropped it as a suggestion, but in this market, it seems like something that is highly risky to do. For anyone who is unfortunate enough not to have detected the bearish trend long ago and sell to be able to buy back when a bullish trend is about to start, then there is really no need for them to bother themselves selling anymore. They should just hold even if they are going to end up getting the best of their investment in 2 years.

[audrey12]

No one can predict if the next day is another dump or pump so eliminating potential losses is quite difficult to handle, again we are not professional speculators and what we only have is the instinct of whether selling now is a good profit compare tomorrow. Actually investment in cryptos is a matter of our personal beliefs and setting of our own limits if we think the profit is good enough, we sell, if its not, we hold.

[Edraket31]

No one can predict if the next day is another dump or pump so eliminating potential losses is quite difficult to handle, again we are not professional speculators and what we only have is the instinct of whether selling now is a good profit compare tomorrow. Actually investment in cryptos is a matter of our personal beliefs and setting of our own limits if we think the profit is good enough, we sell, if its not, we hold.

It really hurts a lot whenever you are seeing the price slowly going down it is just like someone special to us broke our heart, but it doesn't matter as we all know that hurts will eventually heal when our heart is fully recovered by recovering the price. So, it is just a normal feeling guys, we don't need to take it seriously just hold and be positive.

[dmamigo]

If you know you will incur a loss if you sell your coins during crash then it is better to hold it and wait till the price go up to avoid such losses. While you still holding your coins even the price value is low, you still have no loss because it is still yours and has the possibility to increase again to gain profit.

Exactly, in crypto market, you have the option to sell or hold during crash. But again its totally upon the investor. So if a investor doesn't wants to take more risk he/she shall sell off few to whole of his holdings to reduce more loss if the crash continues as of now as its happening. Best would be to hold, but playing safe to sell off 30-50% and holding the rest can be beneficial and can turn out to be profitable.

[Barbarian]

A lot can happen in 20 days that will mess up your theoretical strategy! What if a huge negative news comes in and the price drops $1500 or more, and then instead of recovering the following day, it drops $500 more! How does one use your suggestion to counter the loss especially when fear leading to panic selling is stronger than most strategies in a bearish market?

What the op is suggesting is nothing more than to trade to get our losses back but for that you need to be a talented trader something that is not easy to achieve especially when the market is so difficult that is why holding is the less risky strategy, and the one that gives better returns to those that are no good at trading.

[Cootie]

The most common answer to this question will be to hoard and to wait for the correction to reduce or elimate your potential losses. <You only lose money, when you sell at a lower price than what you bought it at, right>

My suggestion to reduce potential losses, might sound a bit controversial, but it might just work in the current environment.

What I have noticed lately, is that the price is dropping within a $500 margin daily and then recovers. <lots of mini crashes and mini corrections>

So in theory, If you were one of the people who bought coins at say $18 000, and IF you sold now at say $9000, you would have lost more or less $9000. <Some people panic and sell at a loss>

My suggestion : Use these daily crashes to your advantage. Buy more coins when the price falls with $500 and sell when the price goes up with $500 again. After trading fees, your profit will be anywhere between $450 to $490 per coin/day.

Take the profit, put it aside and repeat this strategy until you have chipped away at the potential loss that you would have made.

Day 1   - $9000
Day 2   - $8550
Day 3   - $8100
Day 4   - $7650
Day 5   - $7200
Day 6   - $6750
Day 7   - $6300
Day 8   - $5850
Day 9   - $5400
Day 10 - $4950
Day 11 - $4500
Day 12 - $4050
Day 13 - $3600
Day 14 - $3150
Day 15 - $2700
Day 16 - $2250
Day 17 - $1800
Day 18 - $1350
Day 19 - $ 900
Day 20 - $ 450
Day 21 - $ 0

In 3 weeks, you can eliminate any possible losses, if you follow this example. This is definitely(edited) not a guaranteed recipe for success, but given the current situation, this might just work.  

Yes. This might actually work, if the pattern stays like that for a period of time. But we all know that cryptocurrencies are impulsive, they change from every single time passed. There is no pattern to follow in the changes that occurring. It is totally random even though I read that some people were trying to manipulate the price, if that's true, still they cannot change it the whole time these cryptos are existing. Maybe they affect the cryptos now, but tomorrow, it will be a different situation. The point is even though some people tries to influence the whole cryptocurrency world, the chance of success is low because they are like fighting the future. Another point is even  we have references for theorizing some stuffs, still we don't know what will happen next. So you can't just simply rely on strategy like this, you must have series of them to be able to cope up with some possible scenarios.

[Clement Kaliyar]

While already losing because of a crash, hodling is my only option for whatever cryptocurrencies i have in my portfolio. I know that their prices are affected due to bitcoin's crash but i can still wait until bitcoin come back again.

Holding your coins is always a good option ,but make sure you average your loss my buying the coins at dips ,so that you will be having a bigger profit rather than holding the coins and selling at a mere profit,the strategy outlined by OP is a good one,but i does have its risk,but prices are swinging in both ways on a daily basis,if you can monitor the market carefully you can make profit in any market condition.

[kalawang]

The most common answer to this question will be to hoard and to wait for the correction to reduce or elimate your potential losses. <You only lose money, when you sell at a lower price than what you bought it at, right>

My suggestion to reduce potential losses, might sound a bit controversial, but it might just work in the current environment.

What I have noticed lately, is that the price is dropping within a $500 margin daily and then recovers. <lots of mini crashes and mini corrections>

So in theory, If you were one of the people who bought coins at say $18 000, and IF you sold now at say $9000, you would have lost more or less $9000. <Some people panic and sell at a loss>

My suggestion : Use these daily crashes to your advantage. Buy more coins when the price falls with $500 and sell when the price goes up with $500 again. After trading fees, your profit will be anywhere between $450 to $490 per coin/day.

Take the profit, put it aside and repeat this strategy until you have chipped away at the potential loss that you would have made.

Day 1   - $9000
Day 2   - $8550
Day 3   - $8100
Day 4   - $7650
Day 5   - $7200
Day 6   - $6750
Day 7   - $6300
Day 8   - $5850
Day 9   - $5400
Day 10 - $4950
Day 11 - $4500
Day 12 - $4050
Day 13 - $3600
Day 14 - $3150
Day 15 - $2700
Day 16 - $2250
Day 17 - $1800
Day 18 - $1350
Day 19 - $ 900
Day 20 - $ 450
Day 21 - $ 0

In 3 weeks, you can eliminate any possible losses, if you follow this example. This is definately not a guaranteed recipe for success, but given the current situation, this might just work.  

To be honest for me holding is the best key so you wouldnt feel this losses try to dont panic every time crypto decreasing or try to sleep and dont see your blockfolio lol i think it will helps you a lot for our safety.