The most interesting thing about $CHZ this time is that before it fell, it still looked fairly strong—like it was ready to keep pushing higher. But it dropped from 0.01844 to 0.01663, and short-sellers’ profits ran up to +472.7%. The discrepancy in the chart all of a sudden became obvious.

This is exactly the kind of position where people are most likely to make mistakes. When you see it pushing up, people without positions want to chase it; people who are short want to cut. And once it truly starts to decline, they’re too afraid to jump back in.

At the time, I didn’t rush to decide which direction it must go. I only watched whether the rally after the spike would get continued “follow-through.” If there was no follow-through, it actually suggests the key level above is still intact, so the subsequent sell-off also isn’t surprising.

After trading short-term for a long time, I’m increasingly convinced that it’s not always about being faster than everyone else. Being able to hold still during a fake show of strength—and not mess around—often saves you from losing a lot all at once.

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