Don't sell more bitcoin than you can afford to lose. Some thoughts on HODLing strategy.

in #blockchain7 years ago

Do not sell all of your bitcoin holdings on what you speculate is a local peak, because you don't know when the local peak is, macro you are operating on your long term thesis that bitcoin is digital gold and long term target is much higher. Selling all at what you guess is a local peak, can go against you - then you end up holding no bitcoin because you sold it all, and price doubles, never to return. This is what people are talking about when they say they learned the hard way. Then you are no longer a bitcoin holder or you buy back at a higher price and have 5x instead of 10x.

Generally day trading a slow exponential random function with high volatility is high risk - statistically you will lose. If you want to guess news-flow do it with a small part like < 10% so you still have 90%+ in long term holdings that you do not touch, in years, if you guess wrong! Anyone who has day-traded regular stocks will tell you news-flow is hazardous, even when you get the news that you bet on, often enough the market already bet further than that so it falls instead of rises etc. Don't forget the market is also trying to predict the future.

And don't spend all of your speculative cash allocation in one shot - put it in say 3 buckets in increasing size, and start with smallest and set limit orders larger downwards for bucket 1. If that all triggers then wait a bit, re-examine if you want to try the next bucket. and don't be afraid of a profit take, a profit is a profit - but keep the proceeds in BTC and HODL them - don't ramp up your speculation fund. If it goes against you, just HODL - historically sometimes it will take a year or more, be patient. Slow buy the dip, monthly with spare spending money while HODLing.

As Bitcoin morpheus says "Buy the dip" - often unexpected news flow driven dips are overblown and recover fairly quickly. Can be a good way to pickup coins for long term holding, or to start putting in some speculative cash reserve limit orders.

Generally I think most people get too trigger happy with day trading or too active. Few trades, and take your time think about it for a few days do not act with emotion, have a plan and stick it, stay calm. Your speculative allocation holding pattern should be hold for a worthy news dip. The main thing you'll be kicking yourself on is not having cash reserves left to buy the dip.

A strategy to get in at start, you could be buy a bit so you have a start and then set up a regular buy, just allocate something you can afford monthly and buy to dollar average.

As Francis Pouliot said "dont sell more bitcoin than you can afford to lose!"

(Not investment advice, just my thoughts, I mostly HODL and buy dips).

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Good Advice - thanks. I noticed that the Russians did the same thing that China just did - before they totally reversed their position. This manipulated the bitcoin market - allowing them to get in at a reduced price. Of course, now that the fright is wearing off - the price is up a little. So... probably a lot of smart, richer people buying on the dip. Crypto's are here to stay. It's just the beginning.

I totaly agree with you. Theres a sevey been done beginning of this year stating that 0.15% of the world own bitcoin and it has risen to 0.3 % in a few months. Now that is impressive. Massive addoption will come in no time. So thats why bitcoin is so volitile these days so many rumours/fud will hit this market in the coming months big players/companies/banks/goverments will do anything i theire power to panic the market to buy the dips. Blochain will thrive in the years coming.