If you truly believe that, and I believe you do + I am not saying you are wrong, why are you then still publicly trading for a few bucks profit per bitcoin? Is it the rush you are getting when the price runs away from you in either direction? Are you hedging against your own bullish judgement? This seems like a dangerous strategy believing what you are saying is sincere.
Yes, I attempted to make my above highlighted statement to be within what I really believe, and I framed my statement general enough that it is reflective of what I believe at the moment to be within reasonable possibilities.
Contrary to what you seem to be asserting (or implying) bitebits,
I don't see my BTC trading strategy to be contrary to my view that BTC prices have decent probabilities of reaching $25k to $250k within 5-10 years.
Decent probabilities can mean a lot of things including beliefs of anything between a 10% chance and a 90% chance [...]
Somehow to me, bitebits, I get the impression from your above comment that you believe that in order for me to be consistent with my views, I should be buying more and more BTC and even leveraging more in order to buy BTC because the present value of such a view (if I really believe it) would seem to dictate that I invest more financial resources into BTC.
Really, I don't think so.
[...]
I hope that makes sense to clear up what seems to be a kind of inconsistency in my position from your point of view.
By the way, in a nut shell, what are you doing in terms of attempting to prepare your BTC holdings in a way that you believe is consistent with your view of BTC's future and in light of your own financial circumstances?
Thanks for trying to explain JJG, appreciated. Not sure if I fully understand or agree though.
I am not sure how to respond further, except maybe by providing a bit of an illustration.
Each of us are going to have to attempt to tailor, as best as we can, to our own expectations and views, and there may be a range of reasonable strategy outcomes, and certainly, some strategy outcomes may prove to work out better than others, but merely because one strategy plays out better than another strategy, that does not necessarily mean that the poorer performing strategy was less reasonable or worse.. only means that the person choosing the worse performing strategy had considered that strategy to be best for his circumstances based on the information that he had at his disposal at the time of the choosing. And, yeah, we can attempt to learn and adjust our strategies, and I certainly am not opposed to adjusting, if I conclude that adjusting would be the most prudent route for me.
O.k. let me give you a bit of a description of my trading approach, how it has been playing out in recent months. I generally attempt to have enough cash in order to buy at least 20% down, if the price were to completely crash in that downward direction. Usually, such a 20% crash does not happen all at once, so frequently there are going to be ways to preserve enough cash fiat value to be able to buy with even a larger crash.
Currently, as I type, here is exactly my distribution and amounts of buys and sells, as if (hypothetically) I had 100 Bitcoin (approximate current value $45,200) plus about $1,520 in fiat (with about 96.7% of the total in bitcoin and 3.3% in cash) (therefore total value of hypothetical BTC portfolio of $46,720).
I buy on the way down and sell on the way up.
Down for 5% looks approximately like this:
BuyPrice BTC_tobuy $Amt_ToBuy
$423.00 0.20263425 $85.71
$426.00 0.20120724 $85.71
$429.00 0.19980020 $85.71
$432.00 0.19841270 $85.71
$435.00 0.19704433 $85.71
$438.00 0.19569472 $85.71
$441.00 0.19436346 $85.71
$443.00 0.19348597 $85.71
$444.50 0.19283304 $85.71
$446.00 0.19218450 $85.71
$447.50 0.19154030 $85.71
$449.00 0.19090041 $85.71
Up for 5% looks approximately like this:
SellPrice BTC_toSell $amt_toSell
$453.50 0.15750512 $71.43
$455.50 0.18817626 $85.71
$457.50 0.18735363 $85.71
$459.50 0.24871755 $114.29
$462.00 0.24737168 $114.29
$464.50 0.24604029 $114.29
$467.00 0.24472316 $114.29
$469.50 0.24342005 $114.29
$472.00 0.24213075 $114.29
$474.50 0.24085504 $114.29
$477.00 0.23959269 $114.29
$479.50 0.23834351 $114.29
According to you own logic, even with your lowest estimate of a 10% chance on your lowest estimate of $25k per bitcoin, you should not be selling any bitcoin under 2500$.
Even though I am trading, tentatively, I plan to keep buying (without completely cashing out) until at least $2,000. My plans could change; however, if my viewpoint changes.
But I am not judging or telling you what to do, just noticed the inconstancy.
I really don't think that it is inconsistent, especially, since I am selling such a low percentage just to protect myself a bit more from downside movements, which seem nearly inevitable in bitcoinlandia.
Psychological it might be hard to not trade when you watch the price closely and have bitcoins / fiat on an exchange. Like Warren Buffett recently said during the Berkshire Hathaway annual shareholders meeting: "A full wallet is like a full bladder — you may have the urge to pee it away very quickly".
I think that I am being more strategic than emotional regarding whether I feel that I have to buy or have to sell. I think actually going through the process of trading also helps to learn and to exercise more self control regarding what to do under a variety of circumstances (putting the theory to practice, so to speak)..
My 'strategy' is simple since I have a certain percentage of my wealth invested in Bitcoin where I feel comfortable with. Don't care whether it's short term manipulated dollar value abruptly decreases or increases.
In nearly my first two years of buying bitcoins, I believe that my strategy was merely to accumulate; however, I feel much more protected (my total BTC portfolio) after I have been both buying and selling.
Do care when I would lose bits in the trading process.
Surely, no system is completely fool proof, and I have had several instances where I may have attempted to time the market, to get greedy or to just do too much at one time, and then I put myself in a bit of an awkward position because of my rashness.
Nonetheless, I think that overall, my BTC portfolio has profited considerably from my somewhat measured approach. In that regard, I have increased my BTC holdings, brought down my average cost per BTC, accumulated a considerable amount of fiat (within my BTC trading portfolio) to hedge somewhat in preparation for downward price movements.
When/if the dollar value of a single bitcoin gets >$2k I am probably forced to rebalance my portfolio, even though I share your believe that the future dollar value of a bitcoin is likely way higher.
You have seen rpietila's thread on Sane Simple Savings...
https://bitcointalk.org/index.php?topic=345065.0Well, maybe it is a bit much to use sane and rpietila in the same sentence, but his thread gave me quite a few ideas, and probably, I should create my own thread to show how I have improved upon it... .well at least tailored some of the ideas to my own considerations.
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