What to do when you realize you are down 50% on a position
A practical playbook for one of the situations every memecoin trader eventually faces: when you realize you are down 50% on a position.
How to read the situation
A 50% drawdown on a position is a moment for honest assessment, not panic or denial. The question is whether your original thesis is intact or broken — the entry price is irrelevant now.
If the thesis is broken or liquidity is draining, cut it; if it is genuinely intact and you have a clear invalidation, your pre-set plan governs.
What to do right now
- Ignore the entry price — it is a sunk cost.
- Check whether your thesis is intact or broken.
- Verify liquidity is not draining.
- If the thesis is broken, cut and redeploy.
- If intact, defer to your pre-set invalidation.
What not to do
- ✗ Averaging down purely to lower your average.
- ✗ Holding on hope with no thesis.
- ✗ Anchoring decisions to your entry price.
- ✗ Ignoring draining liquidity.
Reading the chart is step one. Getting pinged in real time is step two.
Get the live contract and suggested size in Telegram for $10/week. Free name-and-score DMs are available if you want to try it first. No alert guarantees a profitable trade.
Education only — not financial advice. Memecoins are extremely high risk.
Related guides
- What to do when liquidity is being added to a coin you are watching
- What to do when the market is euphoric and everything is pumping
- What to do when a launch you watched dumped right after you almost bought
- What to do when a coin pumps right after you sell at a small loss
- What to do when you find a coin with a perfect-looking safety screen
- What to do when the narrative you are trading starts to rotate out
- What to do when you are tempted to put in more than you planned
- What to do when a coin has high volume but the price is not moving
- What is Solscan? (memecoin term explained)
- What is SPL token? (memecoin term explained)
- What is Meteora? (memecoin term explained)
- What is Orca? (memecoin term explained)