I'm new to bitcointalk but not a complete novice when it comes to crypo. I was able to generate a few btc through alt-coin GPU mining, trading, and some luck. Unfortunately I didn't have a risk mitigation strategy in place, I was greedy, and I didn't think crypo had a future. I'd swap mining to the newest coin with minimal research (to mine as many as possible before difficulty increased), make greed driven near all-in trades, etc. I got left holding the bag on some junk-coins but generally was pretty lucky. After the crash in 2013 I got discouraged and left mining for some time. Eventually I traded my remaining btc for CSGO items (luckily! My btc was on Cryptsy and I got it a couple weeks before they tanked). I haven't had time for gaming in a while and decided to return to mining as a hobby/high risk investment. I have adequate income/savings/investment from my day job so I'm not super concerned about converting a large percentage of crypto to fiat. My goals are to offset electricity/mining equipment cost, build a mixed fund of BTC/Prominent Alt-Coins for potential long-term gains, and have some coins to trade for fun and hopefully profit.
I think the biggest thing that will help me is having a strategy to diversity my coin holdings along with rules for trading. A set structure will reduce FOMO and help mitigate risk. I want to know what your thoughts are on my plan along with what your personally strategies are. Thus far I have just been observing the markets, researching different coins, and mining higher profit coins.
Start:
- 50% current crypto converted to btc and hold
- 25% current crypto left in high volume alt-coin holdings as speculation
- Target 4-6 alt-coins for medium-term holds
- 25% current crypto used for trading/high risk alt-coin speculation
On weekly basis:
- Convert 50% of newly mined crytpo to btc to hold
- Rebalance alt-coin speculation holdings - Max 33% total holdings
- If speculation fund greater than 33% total holdings, convert excess to btc and transfer to wallet
- If less than 25% of total holdings, transfer up to 25% of newly mined coins to speculation fund
- Rebalance trading fund - Aiming for 25% total crypto holdings for trading.
- If fund value greater than 25% total holdings, convert excess to btc and transfer to wallet
- If fund value less than 25% total holdings, add up to 25% newly mined crypto to trading fund
- Any remaining balance from mining converted to btc to hold
Trading Rules:
- No low volume coins (to help reduce risk of bag holding after pump & dumps)
- Maximum 25% trading fund value available for any individual trade
- Prevent all-ins
- Limit maximum number of concurrent trades
- I will reduce this value as my total crypto holdings increase
- Aim for 5% profit - sell once target met
- Stop loss order - I'm unsure about setting a rule for this but suspect I should - thinking 90% of purchase price. What do you do?
Transfers to FIAT:
- Withdraw proportionally from main btc wallet, speculation fund, trading fund
- Used to fund mining hardware purchases
- Used to fund/partially fund non-standard purchases
Does it seem like I'm on the right track? What would you do differently? Why?
