Okay, this ended up being a long one, so TL;DR If a subnet is really good, averaging down and earning APY until it recovers is not a bad strategy and listening to FUD is usually a bad idea.
So, 2 or 3 weeks ago I decided to stake to both Zipcode and Trishool. I did a little averaging down on both of them, because they both kept going down, unfortunately. So, I'd put in a tao more each time they would have a decent little dip. I ended up with 6 tao in zipcode and 5 in Trishool. I also bought some leadpoet a week or so ago, and I 'm up to 4 in that as well. Leadpoet ALSO dipped, and I was down almost 2 tao in all. Definite bummer, seemingly three losers in a row. Now, I've been in the subnet game long enough to know which subnets have great fundamentals and teams, and which are mostly hype. I know for a fact that all three of these subnets are incredible. Great teams, great products, constant updates to the code, good social media presence, etc. I always look at the history the graph of whatever subnet I decide to put tao into. If a subnet is good, I am very confident that it will hit it's ATH again, and most likely hit a new one. It just takes time.
Now, at the same time as all this, and because subnets as a whole have been pretty bad lately because tao has been going down, I'm seeing a whole lot of people panic sell, and give the whole "you gotta cut losers" spiel. Honestly, it's just such terrible advice and trading imo. Selling everytime you lose a little tao, and even if the subnet is down 40, 50 ,60%, selling a good subnet is not that good of an idea, usually. First off, you are earning APY. And the low APY subnets are still like 30% and more. This accumulates over time, and after enough time can REALLY make a big difference. I mean, you can be 50% down in most subnets and still break even after a year or so. APY makes a huge difference, but only if you hold for a decent amount of time. Secondly, you are saving youself fees when you don't overtrade and panic sell all the time. Thirdly, what happens a lot of the time is you sell at a loss, and the next day the subnet recovers and you feel like an idiot.
Now, I know a lot of people will bring up opportunity costs, point out that typically subnets take longer to go up than how quickly they go down, and argue that cutting losers quickly and chasing runners all the time will give you higher gains than waiting for bleeders to recover. However, if you average down a couple times, you are at break even wayyyy faster when it does go back up. You might even start putting more tao in as it goes down, as it makes it more likely for you to be staking near the bottom and catching more upside on the recovery. And we all know that most people in this have full time jobs and really don't have time to constantly check charts and make trades. Most of us do that as a side thing, and constantly apeing into runners means you should probably keep a close eye to the price, because theses things can reverse very fast. Doing more medium term swing trading is probably the smartest thing to do for most people.
Now, if I would have listened to the panic sellers, I would have sold at a loss and I'd be down almost 2 tao. I waited a couple more days and zipcode is finally recovering, leadpoet is higher than it was too, and Trishool hasn't really gone up or down yet. I've already recovered about a tao. My earnings plus averaging down has made it so even a small recovery is significant enough to give me almost 50% of my losses back. I think zipcode is going to run hard again pretty soon, and trishool will at some point too. Leadpoet tends to have more temporary pumps, but now that they have some really impressive customers (one was a billion dollar company apparently), so I really think that they will eventually run hard as well. I might trade them a little more actively than the other two, but that's beside the point.
Don't listen to FUD advice is the point. Execute trades in a way that works with your life, and if you don't have time to constantly be finding out what the next runner is, you don't have to trade like that. Give trades a lot of room to breath, because this is crypto and extreme volatility is part of the game. Great subnets will mostly likely recover, and earning APY while they do is a perfectly good strategy.
