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.
Even though you are making a statement, here, I think that you are asking a question in a disbelieving manner.
The fact of the matter is that 10% makes a whole fucking lot of a difference in the way it plays out - even a few percentage points can make a considerable difference in approach.
And, it is not merely the 10%, but also the way that a person approaches a large number of investments and/or allocation of investments - in order to structure in a way that is either systematic - or on the other hand gambling. There is a difference and sometimes it does not take a whole hell of a lot of funds in order to hedge in a systematic and strategic way rather than going into an investment in a kind of balls to the walls manner.
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.
Maybe we should just agree to disagree, even though this tends to be a common theme that I harp upon when posters here seem to be unnecessarily gambling with their bitcoins - and seem to be either unwilling or unable to recognize that there are safer and more systematic strategies.
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.
I don't think so.
Sometimes small differences in approach can cause a world of difference.
Even though I attempt to explain my system to people on an ongoing basis, I don't really criticize anyone who choses to merely exercise one side of the equation and that is to buy and to accumulate. That is one side of my particular equation but does not result in more bitcoins and more money, it only results in more bitcoins, while investing more money. My system results in more of both.
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.
Sure, there are a variety of ways to tweak the system, and I am not suggesting any one-size-fits-all approach. In the end, you have to tailor to your own situation - but any kind of playing with percentages and hedging is likely to play out better than attempting to go balls to the wall without any kind of clearly outlined system.
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.
The first two years that I was in bitcoin, I did not sell any, and I only replaced when I sold - so I was in accumulation mode. Yeah, if we return to a downtrend, then I will accumulate more bitcoins and I will not have as much cash, as I already said. i am still prepared for either direction, even though my portfolio (as you said) does better when the price goes up in the long term because that is a built in assumption). For example, once I started trading, my average buy price was about $510-ish, and then is currently below $400.. however, if the price were to return to below $300, then I would end up acquiring more than 15% more additional coins and my average price per coin would drop a bit -but the overall amount in the negative would be around 20% rather than 40% if I had not done anything.
In the end, the whole strategy that I employ is meant to provide decent protections in regards to volatility and to take advantage of volatility while not guessing about price direction or gambling.
Maybe you have some of your various fucked up explanations to attempt to suggest that there is no difference, but in the end, relatively small amounts of hedging and systematic employment of incrementalism provides a lot of protections on the downside - even though it may not result in larger upside in the event that a person gambles correctly (which I think is a bigger risk to engage in ongoing gambling practices).
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.
Now, you are white knighting and speaking for someone else. You are guessing.
Yes, there could be ways that a person could systematically employ balls to the walls strategies, but in this particular case, you have no fucking clue, and you are guessing about the practices of someone else who has not explained whether or not he has any kind of strategy - beyond feelings and intuition.... which is hardly systematic.
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.
Maybe this, maybe that. Sounds like guessing.
The only difference I appreciate is that you devote a 10% to sorta scalp and he doesnt. I like scalping.
Sure. Call my system scalping or whatever, there can still be some variance in the way that different people employ it and even with myself, I continue to have some flexibility if I want to deviate somewhat from my own system - even though I tend to find that I largely stick with the system and only deviate in small ways from time to time - and I never really bet big (which continues to be a difference that you fail / refuse to appreciate and wants to argue about your failure/refusal to recognize).
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.
Well, long term views about bitcoin could have changed the way that each of us attempted to employ our strategy (whether you call it scalping or otherwise). Since you seem to have gotten into bitcoin before me, your strategy seems to have played out differently, but it could have also affected your ways of thinking about some of these matters. I am not sure, yet it does seem that you and I have some difference in what we actually did when the price fell from $1200 to $200. When the price was in the $600s and when the price was in the upper $300s, each time I made considerable investments because I thought that we had reached bottom. I did not go 100% in, but I was pretty fucking close, and at that point, I mostly just had the tool of the dollar cost averaging to continue to buy on a regular basis for the period of time that prices were largely in the lower to mid $200s.
So, yeah, maybe in the end, both you and I were in a similar place and running out of money and with a average cost of several coins that was higher than the then current price.
However, one thing that differed in my practice from yours is that I continued to buy throughout the nearly year long period that prices were below what I expected them to be. Sure, I did not have as much money because I had anticpated higher prices, but I did not stop buying during that period of low prices.
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).
Again, I don't think so, and we seem to be kind of repeating ourselves and maybe even quibbling about some nuances.
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!
We don't agree. The situation plays out differently, as I keep repeating.
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.
Again. I try not to predict too much. If the price goes down I buy and if the price goes up I sell. Every once in a while I will throw a little more in one direction or another, but generally I attempt to refrain from any kind of meaningful guessing and I just attempt to apply the system and maybe tweak it a little way here and there depending on whether I believe that I am running out of funds - and so that I do not run out of funds.
I recall that a couple of dips, I was at 98% and 2% and I had to engage in some tweaking of my holdings that was a little bit out of the system but an attempted to continue to have some dollars in case the price kept going lower... I had to tweak because I was running out. I also recall tweaking at 92% to bring up my BTC allocation to 94% .. because I thought that I had too much cash and I was a bit more inclined to think that I did not have enough bitcoin in the event the price was going up. These are tweakings that are based on a kind of gamble - but overall the large majority of the system is NOT playing around with guessing the market direction but instead employing a kind of algorithm (like a bot)
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.
You can speak for yourself, but again comes off as white knighting if you are describing what the other guy is doing and what trigger points he might have.
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.
No matter what, I am saying there is distinction with difference, and you seem to fail and refuse to recognize such distinction (whether you are not capable might be another story).
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.
We seem to agree about the point of not over investing, but some people figure out ways to employ margin trading too... which could be too much gambling for my tastes, but still there can be systematic ways to employ in a prudent way.
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.
Again we are repeating. I don't agree.
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.
I agree with that, so I agree that there can be systematic ways to employ 100% betting, and that is why I posted in the first place to attempt to get some specifics regarding what the guy's plan was or is.
Again not much more different than any other system bassed on percentage of allocated funds to be in/out and hedge.
I agree that there are ways that seemingly different systems could be employed in ways to achieve similar results.
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