To HODL is to hold onto your Bitcoin regardless of developments in the market and falls in the price.

I HODLd after the summer of 2014 through most of 2015 more out of laziness and inertia than as a policy. It is not enjoyable during a bear market and I will not repeat that experience.

By the way I did average down on the Russian stock market and it has done well since then.

Bitcoin reached a low in June, 2015. Data on the Bitcoin Currency Basket Index from Blocklink.info:

In retrospect it would have been better to have cut my losses around autumn 2014.

I bought more Bitcoin in December 2015 and am obviously in the Green now, at least on paper.

I am not prepared to risk losing the notional profits I have made from cryptocurrencies. (I have also done well with Monero.) Therefore I am not planning to HODL. On the other hand, I have deep faith in Bitcoin and I will sell my Bitcoins only if my hand is forced by a Bitcoin crisis. If there is a crisis, I want to be holding cash so that I can buy back into Bitcoin and average down.

How can someone who followed Bitcoin not have faith in it? Source Blocklink.info :

The Solution: Stop-Limit Sell Order

The solution to this problem is the Stop-Limit Sell Order. It is available at Poloniex.com. I like Poloniex for its super-fast site and range of functionality and markets, and the Bitcoin prices always seem higher than at Coinbase.

From the Poloniex Help on Stop-Limit Selling:

BTC is now $968. (28 December 2016). This is a Stop Limit Order to sell 0.1 Bitcoin at $900, to be triggered if the price falls to $910:

Press Sell and this screen pops up for confirmation:

You can sleep easier with Stop-Limits in place. You don’t face the possibility of being punched in the stomach one morning by an overnight crash in the market as you’ll get stopped out. Moreover it means you take your decision to sell in a rational, considered way and don’t have to take decision in the heat of the moment and possibly in panic.

And the beauty of it is, if there is a crash, you have cash to Average Down by buying more, now cheaper Bitcoin. At times I find myself hoping the Bitcoin price will fall through my triggers, creating a Bear Trap and perfect buying conditions.

My policy is to review my Stops regularly and to nudge it up or down in line with the Bitcoin price so that it is generally about 5–8% below the market price.

There are two significant drawbacks with this policy of put Stop in place to protect your Bitcoin portfolio. The first is the need to keep some Bitcoin in an Exchange wallet, which is by its nature vulnerable to hacking. I keep most my Bitcoin on a hardware device, and I am uncomfortable keeping coins at the exchange. Secondly, there is always the possibility that you will get Stopped Out overnight and then the market immediately shoots ahead again. In other words, your Stops push you into a steel Bear Trap.

My experience with Stops

AltCoin Bloodbath, October 2016:

The Stop Loss trades did exactly what is says on the can: they stopped my losses, after beginner’s luck experimenting with Altcoins.

Bitcoin goes mad, December 2016/January 2017

I trailed my Stops up behind the rising price and they were triggered while I was taking a shower in a flash crash on 5 January. I took the immediate, impulsive decision to buy back in.

The flash trash that wiped me out:

My Stop trades running up to that:

Lessons: