Wall Observer

[ChartBuddy]

 

[blackspidy]

That $737.40 price target seems pretty decent, and fairly reasonable..... though I am curious to see how long and what intensity (how much volume) prices were to rise through the $500s and $600s.. and would we make it through all of that unscathed and how quickly?

Let's say, hypothetically prices go up to your price target within the next few weeks, do you run out of coins at $737.40? or are you down to something like 25% of your stash at that point?

I came across a lot of contradicting thoughts when establishing how much of my BTC holdings I wanted to convert into "profit". I came cross a compromise that I think is quite elegant.
I'll simplify it a bit, but let's say I have 1% of my stash that I sell at each "sell target" price. Each sell target has a buy target a set percentage under it. Each buy/sell pair target has a number ("n") associated with it. I will buy back that same amount of BTC back at buy target n times. I will sell it n-1 times (if all goes according to plan). It all depends how many times it dips to the buy target. I could be anywhere between 0% of my stash (having completely sold out by $737.40) or at an unknown percentage (I haven't run the numbers for if everything acts to my favor, too many factors, the sum of possible outcomes is through the roof).

For example. I have the first sell/buy target pair at $479.26 & $469.67, with n = 3. If that first pair goes exactly according to plan, I will sell 1% of my stash at 479.26 twice, having bought it back at $469.67 thrice. That means (using 1 BTC to represent my stash) I will be left with the same amount of BTC rocketing moonward with an added $0.19 profit. This could happen every step of the way upward (keeping my BTC stash practically intact while I solidify USD and the BTC's value goes up)... but I'm pretty sure it won't. It's almost impossible, I think.

If I have completely sold out by the time we're at $737.40, I will start using margin to keep selling on the way up. If I still have BTC, I'll enact another "sell on the way up, buy the dip" plan. I haven't really come up with a concrete plan of how to do whatever I will do at that price... I'm partially still coming up with the plan right now.

Even though I am engaged in a similar strategy as you (to sell on the way up and buy on the dips), personally, I am too chicken shit to sell too many coins at any one point in time, so even if prices were to go to $737.40 in a scenario that you seem to be suggesting, I would likely continue to hold about 80% of my BTC investment in BTC.

That's my tentative plan, anyhow... Emotions of the moment could, however, change my plan a little bit, to either not sell enough or to sell more than planned.

Aha, another problem I have solved with my plan. I have a few super-targets. These are important pricepoints where I see some resistance at, or I just feel like selling a larger portion. They act exactly like the regular price targets (each sell having a paired buy target and an associated number), except that they use a larger portion of my stash and are less numerous. They're three, the first selling off 12% of my current stash, the second selling 24% of it, and the third 36%.

 

[blackspidy]

Hm... maybe I'll get around to uploading a graphic and a table, better explaining it.

 

[yrral86]

It sounded like a good plan until "I will start using margin to sell on the way up". That is a very dangerous thing to do in this market if it goes full bull.

 

[blackspidy]

Well, I would margin sparsely. A small percentage of my newly-gotten USD stash. I would try to keep my margin under 2X, by the end of the whole thing. Max I think we can get out of this halving year is $2000...

Like I said, that particular, post-$738 plans are a work in progress. I'll start plans for that bridge when we'll try to cross it.

 

[ChartBuddy]

 

[JayJuanGee]

I came across a lot of contradicting thoughts when establishing how much of my BTC holdings I wanted to convert into "profit". I came cross a compromise that I think is quite elegant.

I'll simplify it a bit, but let's say I have 1% of my stash that I sell at each "sell target" price. Each sell target has a buy target a set percentage under it. Each buy/sell pair target has a number ("n") associated with it. I will buy back that same amount of BTC back at buy target n times. I will sell it n-1 times (if all goes according to plan). It all depends how many times it dips to the buy target. I could be anywhere between 0% of my stash (having completely sold out by $737.40) or at an unknown percentage (I haven't run the numbers for if everything acts to my favor, too many factors, the sum of possible outcomes is through the roof).


For example. I have the first sell/buy target pair at $479.26 & $469.67, with n = 3. If that first pair goes exactly according to plan, I will sell 1% of my stash at 479.26 twice, having bought it back at $469.67 thrice. That means (using 1 BTC to represent my stash) I will be left with the same amount of BTC rocketing moonward with an added $0.19 profit. This could happen every step of the way upward (keeping my BTC stash practically intact while I solidify USD and the BTC's value goes up)... but I'm pretty sure it won't. It's almost impossible, I think.


If I have completely sold out by the time we're at $737.40, I will start using margin to keep selling on the way up. If I still have BTC, I'll enact another "sell on the way up, buy the dip" plan. I haven't really come up with a concrete plan of how to do whatever I will do at that price... I'm partially still coming up with the plan right now.

I think that it is good to both theorize a plan, as you have described, and also to put your plan to practice.

And, yeah, right, each of us, if we put some thought into the matter, are likely going to come up with variations of theories and plans, even if we got some of those theories/plans from others, we attempt to customize our theories/plans to our own risk tolerance, views about bitcoin, etc.


I personally believe it is good to remain somewhat flexible in our plan applications in order to allow learning from the process, but also to identify our own viewpoints while putting theories and plans to practice.


When I started trading in October 2015, I had a quite a few preset parameters and criteria (theories and plans), and I put those theories and plans to practice, I found that frequently, bitcoin's price would subsequently run further and faster (and sometimes slower and a smaller amount) in one direction or another and in ways that were difficult to predict with any certainty.


Therefore, I found that instead of being rigid, I would adjust some of my parameters as I go which sometimes would be after one or two trades and other times after a series of trades, I would then rethink my positions and projections and to figure whether my stacking of my projected trades were in line with my views of the future price direction and in line with the amount of bitcoin and fiat that I had in my BTC trading portfolio. I also found more and more utility in attempting to set up trading scenarios in which I would be somewhat price neutral - in other words, I would not care so much about BTC's price direction and just exercise trades in such a way that I profit from price moves in either direction (kind of what you seem to be doing by buying back at set intervals)... and always an underlying assumption would be that I don't really know short term direction, but that I anticipate long term BTC prices to be rising... which really translates into overall BTC accumulation no matter what (even while there is a bit of fiat stacking too).

I found that the more that I practiced and readjusted the more cushion that I would have on each end of the stacking, which would cause both additional flexibility, somewhat less stress but also some additional abilities to strategically deploy some of my funds in the event the market moved far and rapidly in one direction or another. Nonetheless, I have found that I can somewhat still become a bit stressed when the price moves farther and longer in one direction or another beyond my level of preparations and there is a bit of a need to readapt to account for those new market circumstances.


From your description of your plan, I really get the sense that you are somewhat failing to account for your own view of what BTC prices could do, and you really don’t want to be in the position that you seem to be acting greedy in that you have pretty much sold all or most of your BTC at a certain price point, such as $737.40… because even you seem to admit that BTC prices could possibly (maybe low likelihood) go to $2,000 on the same upcoming anticipated run…and with that I imagine that you can even imagine scenarios that it could go further than that on the same run (even though you state that you are expecting $2,000 as the absolute top, hm? Think about this "absolute" thinking, do you really believe such?)…

In any event, I personally believe that you should consider adjusting your anticipated trading plan somewhat to account for your own views and maybe at $737.40, at most, you would have sold 70% of your current BTC holdings… Yeah, I understand that you are going to adjust some of your trading along the way, but really, given your own view, it’s better to be in a position to still have some BTC at $737.40 rather than to completely have sold out and to rely on less preferable strategies of margin trading etc…

Aha, another problem I have solved with my plan. I have a few super-targets. These are important pricepoints where I see some resistance at, or I just feel like selling a larger portion. They act exactly like the regular price targets (each sell having a paired buy target and an associated number), except that they use a larger portion of my stash and are less numerous. They're three, the first selling off 12% of my current stash, the second selling 24% of it, and the third 36%.

Actually, I agree that your trading plan is more healthy with an incorporation of what you label as “super targets” Nonetheless, you may like to keep in mind that, even though you are selling a greater amount, that you are still going to have some BTC (maybe something like 30% of your original stash) in the event that BTC prices reach and exceed $737.40.

I'm not against BTC trading strategies that assume views much different than my own; however, in order to always conserve a certain amount of my BTC portfolio (at least prior to prices in the $2,000 price arena, I have been intending to only trade profits rather than principle, but even that could cause the total quantity of bitcoin's to go down in some scenarios. Anyhow, let's say hypothetically I hold 10 BTC, then I will only sell $10 per $1 raise in BTC prices.. but then sometimes some of this will stack and seem to be quite a larger amount.. Let's say that BTC prices go up $20 before I am able to trade and then I sell $200 and then it goes down $10 and back up.. I may then decide to buy back more than $100 on the dip and then sell only part of that again. Mostly that limitation of trading within profits has worked really well for me, so far to continue to accumulate both BTC and dollars in almost a foolproof way, and without a feeling like I am gambling above and beyond my already allocated BTC investment. On the other hand, if we have a 5x or a 10x increase in a short period, then there can be a feeling of top heaviness and cause breaching of this plan to trade a portion of principle (maybe 50% or more of principle and then to buy back in increments on 3% or 5 or 10% price drops, depending on how far any correction may be anticipated to go).

 

[ChartBuddy]

 

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