I wonder....
Given my track record, if I go all BTC tonight and accept that loss from my stupid spontaneous 804 sell, will the price move down in a flash-crash and reach my target of 801-781?
If I stay all fiat will it go to 980?
Or will it remain in the 850-890 range is I go 50/50?
I am starting to feel paranoia.
you should always have a healthy amount of fiat, incase of cheap coins.
I've been starting to wonder the same today. Maybe I should try some kind of balancing plan between fiat and BTC holding.
50/50 for tonight, then. At least I would cover some of the losses if the market makes a sudden move in either direction.
I will probably get shot here for this - but here's my take:
My advice for what it is worth:
I personally find that running spread sheet with all I have ever put into BTC and some alts on it (priced in BTC).
I also have it showing a figure of what price of BTC would have to be to see me at zero profit (this has to be a fiat figure to make sense).
Since I bought some way back, and have bought more since - it gives me an average price of what BTC would have to fall to, in order for me to have wasted my time.
I trade and buy / sell part of my stash (yes, on Gox) always trying to make sure the average ‘break-even’ stays down at a level that I think realistically BTC will not fall to. This is around the 300 USD mark for me - any lower is a net loss on money in vs current price on my current coin holdings.
When I cash anything out (sell some coins) it actually reduces the 'no profit' level, as the cash in the spreadsheet insures against a fall in price.
So my risk from a catastrophic crash looks better (and feels it) whenever I sell a couple of BTC.
If the price drops enough to do between 5-10%, on rebuying, I buy back in, if it doesn't - I consider just withdrawing the funds. A little profit, or some of my fiat back is no bad thing, given I have actually invested funds in.
In the past few weeks - I have many times decided I would cash a few coins out to try to get closer to net profit 'no matter what', but every time the price has dropped to a level it is stupid not to buy back in at - that is, significantly lower that I sold coins for.
Many nights I have thought – OK, I will cash a few out - but left a bid at a lower price for slightly more BTC 'just in case' and woken up to find I had my fiat gone and an increase in my holdings.
In conclusion having some fiat and not worrying about it, is the only way to trade in a calm and sensible way - full BTC means you need to sell with perfect timing and then not miss the bottom and spot it when it is. Most people here seem to be terrified of losing profit on the coins they have by selling - but unless you have some fiat at the right time, you cannot take advantage of this.
In real time trying to trade on short timescales, it is impossible not to get emotional and screw up - if you set trades up and leave them, it does remove the risk of panic in both directions.
Sell at what you feel is a reasonably good price, to take a little fiat out - then if the price does not fall, don't be afraid to cash a little profit out to reduce your risk on the original investment?
I believe in Bitcoin and I have invested some savings - but it will not make me a millionaire just yet. So my aim is to be playing with my original investment back with no risk of crash.
I did not buy thousands of coins in 2011, so I am not in the league of many here, I must add – so my thoughts will not apply to all, but if anyone bought in at under current price levels – if the market flips regularly as it has – keep a little fiat and trade to increase coin, while always being prepared to be in fiat too.
For me, my advice would be to look for 5% to 10% profit on trades – not to be totally right about the big swings top and bottom long in advance…
And if a trade looks bad, hang on either way, don’t panic, just wait – if it’s gone totally bad, just take the fiat out and hold what you’re left with?
Poll
