Well colour me awed!
The old man dumped another 100 BTC at $406.
"This is getting ridiculous. What am I meant to do with this $40K? Buy more Bitcoin?"
"I think I might change the plan slightly. Sell 50 instead of 100 at every $100 mark..."
Yes, otherwise you will be out by summer.
Tell him you expect him to live longer than summer and want to have more time discussing this with him.
That's the advantage of using a
percentage-based withdrawal, with whatever level of conservative/aggression your tastes demand.
Because we've recently gone parabolic, I've personally started using this format, but putting rebuys, proportional to each sell, below each normally finalized sale.
As an example:
You sell 10 Bitcoins at $100.
Rebuy 4 Bitcoins at $90
Rebuy 3 Bitcoins at $80
Rebuy 2 Bitcoins at $50
Rebuy 1 Bitcoin at $33
This way, without knowing how far up the parabolic rise will go before the inevitable correction, consolidation, and finding of new equilibrium.
You'll never have sold more than you were willing to ultimately part with.
All your rebuys will be for a net gain of Bitcoins.
The weakness is that you'll leave money on the table - there is virtually no chance such a system will maximize profits...but that is not the goal.
The advantage? When the instigating event - whatever it may be - causes the crash to occur...all your rebuys will be in place, and according to a pre-planned, controlled method. You will not be hostage to the inability to change your order book for hours at a time - something that occurred both in the April crash, and most recently, for a few hours on our good friend Gox.
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