Tesla Trading Review — Why I Cut Losses at $180 and What I Learned

This is one of my most painful trades. I’m writing it down to remind myself.

In 2024, Tesla’s stock price fell to around 160 after splitting from its peak. I thought it was cheap, so I bought in batches, with an average cost of $180. The reasons for buying at the time: FSD was about to roll out (what Musk said), the Shanghai plant would expand production, and deliveries would begin. It all looked wonderful.

During the holding period, the stock rose to 220, with a 22% unrealized gain. I didn’t sell because I thought, “It can still go up.” Then Musk started crazily selling shares to buy Twitter, and Tesla’s stock price turned downward. I went from profit to loss, holding on all the way to 150. I finally couldn’t take it anymore and cut the loss at $180. I barely broke even, but wasted a year’s time cost.

After reviewing it, I made three mistakes:

First, I relied too much on the CEO’s personal charisma. Musk is indeed a genius, but his energy is spread thin. Today it’s rockets, tomorrow it’s tunnels, the day after it’s Twitter. Tesla is just one of his many projects. Betting your money on a founder who isn’t focused is very risky.

Second, I ignored the competitive landscape. By 2024, BYD had already surpassed Tesla in sales, and after Xiaomi SU7 was released, the response was very enthusiastic. Tesla’s technological lead was shrinking, but its valuation still reflected the “leader” valuation. I didn’t notice this contradiction.

Third, I didn’t know how to take profits. When the stock price rose from 180 to 220, I should have sold half to lock in the gains. But I was greedy and wanted to make even more. In the end, I went from profit to loss, and my mindset collapsed.

Now I set a hard rule for myself: for any position, if the unrealized gain exceeds 20%, sell half, and set a trailing stop for the rest. Even though I might miss some big moves, I can protect most of the profits.

Now the TSLA price on Gate has come back to over 200. I haven’t bought again. Not because I think it won’t rise, but because I know I’m not ready yet. Once I fully absorb this lesson and stop letting FOMO affect me, I may consider it again.

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