I personally think that it makes a big difference to bet 100% versus betting 90%, and to play around with the 90% in the system that I employ (and maybe you too with the something similar that you mention).
Only a 10% difference, even if it psycologicaly makes you have a much different perception.
There is a mindset difference too, to gamble everything in one direction or another versus the hedging that does not cause as much of a betting behavior.
Yes, I agree in the mindset difference. But it is just that, a mindset difference, not a REAL difference.
In the end, I will admit that my overall approach is biased in favor of long term upwards price movements and relies upon a certain amount of ongoing volatility to increase its profitability. Otherwise, the application of my whole systematic approach is almost non-thinking. It is like the application of an algorithm (like a bot) to almost assuredly make money as long as you stick to the system.
That's it. You are "betting" on long term up direction, and you are doing it with 90% of your bitcoin allocated funds. It's no wonder you have had a great result overall for the past two years.
And with the 10% you have been basically scalping, which might have given you even better results. That's ok. But most of your great results are because of an "almost all in" bet in the right direction.
If this past two years the direction of price would have been downtrend.... you would have had a pretty poor result no matter the small 10% hedge you were using.
Without giving some kind of details regarding how the betting 100% one way or another works, it does not seem like that guy is employing any kind of system, except for luck and guessing. So, maybe in the end, I need more details from that other guy regarding how he employs his seemingly guessing game system.
He is employing a "system". He thought the price direction could be downwards and got all out. If he is right, good for him, he will get all in when he deems appropiate price. If he is wrong... maybe he will also go all in (at a "loss") if he thinks the price will keep going upwards.
The only difference I appreciate is that you devote a 10% to sorta scalp and he doesnt. I like scalping. I was a big time scalper in 2013 (with very good results btw), until I ended "all in" because the price came lower than I would sell any more nor invest one more buck. I just let it sit, until I started again buying (not selling) in 2015 after the dump to $300 right after the $500 spike.
But scalping/hedging with 10% is still 10%. Your result is mostly defined by the 90% you have in a bet of long term upside (which I also share, btw).
In other words, he guesses on the direction of the prices and I do not... there is a whole hell of a lot of difference in those two kinds of systems and those two ways of thinking (even though you are trying to argue that they are almost the same, when they are not).
Of course you are "guessing/betting" on one direction. You are doing it with 90% of your allocated funds on upside move!
In fact you are also doing it with the 10%.... Yes, you are reserving it in a bet on a possible downwards movement. Call it hedging, or whatever you want, but its also a guess/bet.... Otherwise you would be 100% on your feeling.
Maybe an example might help? This is not exactly my whole system, but it is the main part of my system.
An example? Well, maybe you think that guy is all out and if the price keeps rising he will keep forever out.... But he can change its mind if price keeps rising an additional 10% and now he thinks it will keep rising for sure. Yes, he will have lose a 10% profit, but again, you also did for not being all in. So both of you are on par on that.
In the end, I am just trying to say that we are all betting on up and down, no matter if you do with 100%, 90% or any other arbitrary percentage of funds. What is really important is that we don't do it with more than we can afford to lose/keep frozen for a long time.... if that happens, you are fucked big time.
Let's say in my system, I begin trading with 10 coins, and BTC price are around $300, and I trade for 2 years with the same amount of coins and I use those proceeds from those trades to buy back. For some reason, you would think that after 2 years, and reaching a 90% allocation, that once BTC prices reached $1,200 my system would cause me to have 9 coins and about $1,200? Right? But instead my system has allowed me to have 10 coins and $1,200 with the same amount of investment. I don't know the math exactly, but for some reason, my system seems to have allowed me to maintain the same amount of coins and to stack dollars.
Your system have been working for you because:
1) Mainly you have been almost all in, in a bull market.
2) YOu have been scalping, buying the dips and selling the spikes in a bull market.
If you would have been doing the same in a downtrend market you would feel very different about your system.
Personally, with the betting 100% system, I really don't think that systematically a person could have as much confidence to have the similar kinds of consistent results if he was continuously betting 100% in one direction or another. In my opinion, just seems to be too much reliance on luck and too much reliance that at one point or another, the bet is going to go wrong which in the end causes long term losses rather than gains.
Oh, you don't need to always be right with a 100% betting system. You just need to be right more than 50% of the bets. Again not much more different than any other system bassed on percentage of allocated funds to be in/out and hedge.
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