JayJuanGee You can propose me a strategy to manage the purchase of BTC from January 2021, I think I will have 3 or 4k to start again, if you have more than 1 or 2 options better, as LFC_Bitcoin does it seems good to me, but I need more options to see more clearly how to do it, if it is with a weekly amount, all in a single purchase, with a monthly purchase.
The easiest thing is to enter with everything but perhaps It is not the best.
Thx,
Wouldn't LFC go all in, and then just put his extra cash flow into BTC as the extra cashflow comes in? Something like that?
I am not sure exactly about the LFC strategy, except to appreciate that he largely does not come out of BTC, once he goes in... at least not until somewhere later down the road when he will start some kind of strategic withdrawal process that is kind of still being determined in regards to the amounts that he will withdraw and the price point locations of the various withdrawals.. (one of the advantages that LFC seems to have is that he has been through at least one other exponential BTC price rise period.. so he is in a better position to be at liberty to transition out of the BTC accumulation stage, at his discretion.. in other words, the longer that you have been in the more that the prior ongoing and persistent BTC accumulation gives options about whether to continue with any amount of BTC accumulation or just to enter into some variations of liquidation/withdrawals).
Another question seems to be that you do not have access to any of the $3k to $4k amount, until January? I presume that you will have a cashflow that will be coming in after January 2021, too? And, since I prefer to work with an exact number of cash that you will have, let's just estimate it to be in the middle of your range of the round number of $3,600 - and then you can work with any variation on what the exact number ends up being.
I understand that lump summing and front-loading may well work better than my more patient strategy - so if there is a way that you skew your upcoming BTC accumulation strategy towards front-loading you may possibly do better than what I am going to be suggesting, but I tend to NOT be greedy and I tend to have a preference to attempt to manage my own personal cashflow over a longer period of time.. so even if I miss out, I feel better psychologically to be able to have ongoing abilities to continue to buy BTC and to have cashflow flexibility....
So ultimately, probably, I would employ something like this: Divide the lump sum ($3,600) amount into
3 parts which would be $1,200 for each 1/3.
The
first 1/3 ($1,200) would get invested as soon as you have the total balance in hand - so within a week or two of you getting the balance in hand. Sure, you can try to be a wee bit strategic about your initial lump sum investment, but pretty much you are buying BTC right away within 1-2 weeks with this first 1/3.
The
next 1/3 of $1,200 would be divided over the next 6 months of DCA.... which ONLY gives you $46.15 per week to invest on a DCA basis (that is $1,200/26)... Anyhow, each week you would invest the whole allotted $46.15 amount.. Sure, you can either just set a date and time for each of the purchases on a weekly basis, or you can try to be strategic with the exact time of each week that you buy... could be fun... if you have time.. without getting too emotional about it, since it ends up NOT really being a very large amount, anyhow. Surely, I understand that sometimes there are too many fees involved with some exchanges and the attempts to buy BTC with lower amounts of value, so if you have to spread out your amount a bit (such as $92.30 over two weeks or some other variation) in order to save on fees, then I can understand the employment of those kinds of attempts at fee-saving strategies, too.
The
last 1/3 of $1,200 would be structured in such a way to buy on BTC price dips. So, whatever happens to be your initial entrance purchase price, you would thereby figure out what is a relatively extreme amount that you believe that the BTC price could go down and that you would be willing to run out of money if the BTC price were to go lower than that speculated amount, and then structure your BTC buys for those kinds of possible dips that you foresee (and hopefully you consider some of the extremes, too and be willing to live with either direction, too.. even if the BTC price does not end up dipping, then you do not end up using that money... fuck!!!!).
So, let's say for example, you had engaged in your initial lump sum investment into BTC in the past several days or so, and your average BTC purchase price ended up being in the $15,750 price arena. You perform a back of the napkin calculation, and you tentatively conclude that you are willing to run out of money if BTC were to dip below the $11k arena, in the event that BTC prices were to go down that low... So you might start your buying on BTC price dips at $15,350 (don't set your orders to buy BTC at exact round numbers, buy a little above the round numbers - unless you are market buying, then you have more flexibility to just pull the BTC buy trigger whenever you feel), and buy BTC at approximately every $333 drop in price. So you calculate that there are about 13 $333 price increment drops between $11k and $15,350 (3 times per every thousand price drop)- and so therefore you calculate your authorized amounts to buy on BTC dips to be $92.31 for each of the BTC price dip increments (which is $1,200/13).
So, during the 6 months that you employ this initial plan, there could likely be additional cashflow that comes in to you and for your disposal that you are able to authorize the allocation of it towards this BTC accumulation practice.. If the lump sum of extra cash that comes in is relatively large, then you can allocate in the same way as the above process by dividing it into three parts and then lump-sum buying, adding to DCA and adding to buys on dips....
If you conclude that the extra amount of cash is too small to be dividing into three portions, then you could decide to use it in only one or two of the processes rather than all three.. of course at your discretion.. in terms of if you want to lump sum buy right away, add it to DCA (and if so how) or add it to buying on dips (and if so how).. Sure, getting more money sometimes can be a great experiment to tweak around your plan, but in some sense, you might not want to be tweaking your whole plan every time that a new $20 comes available to you...
So maybe you would have some kind of threshold amounts of value that would trigger you to employ some differing way of dealing with the extra value that come in so that if the new amount that comes in is less than $100 you are going to only add such value to one category.. if the amount is less than $500 you will add to two of the categories, and if the amount is above $500 you will add such value to all three categories.. something like that... and you do NOT have to stick to your own guidelines because you can change your guidelines (even for mere learning and tweaking experiences) depending on some perceptions of what might be happening with BTC or with your own personal situation including changes to your cashflow, your investment in BTC as compared with other investments, your view of BTC as compared with other investments, your timeline, your risk tolerance and your time, skills and abilities to learn along the way, plan and/or tweak your plans including your allocations or your employment of any kind of trading...
Of course, staying the fuck away from shitcoins should go without saying
(even though I said it anyhow)..
Even if you conclude the amounts of your allocation and your timeline for investing differently than me or the increments, this still remains an outline of more or less how I would consider the totality of the situation of how to attempt to manage the cashflow that I have allocated towards BTC by having a lump sum amount and considering new amounts of cash that might come in with goals of accumulating BTC while hopefully never running out of cash to be able to both buy BTC regularly, and to buy BTC on dips without necessarily erring on the side of shooting the whole of wadd value that I have in my BTC allocated fund in one shot.
Another thing that I would attempt to presume is that once you authorize your money towards BTC, then that authorization and dedication of that value becomes a damned close to final decision.. and you better have some pretty damned extreme circumstances before you are pulling any of that money out in terms of letting it ride for 5-10 years or longer... so you better make sure that you have your various other cashflow matters in order including having an emergency fund upon which you can draw from because emergencies are almost inevitable to happen, especially if you try to take them for granted as not going to happen... so best to have your budget figured out for at least 6 months in advance, including some resources that are available to you so that you never have to draw into your BTC.... except for very extreme circumstances and for quite a bit down the road... 5-10 years or longer...
Poll
