A trader chose to gradually build a position when a certain Meme coin hit a new high. Starting from a peak market cap of $46 million, he invested a total of $49,300 in 12 installments. However, the market quickly taught him a lesson—the coin's price plummeted, and the market cap fell below $3 million. Realizing the situation was dire, the trader decided to cut losses and liquidate his position. His final account balance was only $2,894.79. Between entry and exit, his account evaporated by $46,200, with the principal shrinking by 93.77%.

What does this case illustrate? Chasing a high often comes with the greatest costs. Hitting a new high in market cap is usually also the most risky moment—often accompanied by large capital outflows and profit-taking pressure. Building a position in batches may seem to reduce risk, but if the overall direction is misjudged, it can turn into a vicious cycle of "buying more as it falls, falling further as you buy." This is especially true for high-volatility assets like Meme coins—limited liquidity makes them vulnerable to large orders smashing through support. To avoid such outcomes, first recognize your risk tolerance, then set and strictly adhere to stop-loss levels, and finally, never FOMO into a position at the high point.