By the way, as opposed to JJG's implementation, so to say, of this system, you do seem to have a ladder of sells/buys already set up, and you do your maintainance by removing debris - that is, orders at the same price but on the opposite side of the one just executed. At least, that is the way I understand it.
Nope. Standing buys at regular intervals below the current price, and standings sells at regular intervals above the current price. Two-interval gap in between. There is no removing to be done. When a sell executes, enter a corresponding buy at cheaper price. When a buy executes, enter a corresponding sell at a higher price.
Yep... I think that you make the above point fairly clearly, jbreher, and that is once the buy/sell orders are set up, then when you are employing the incrementalist trade (or step trading) practice, you just sit back and add orders as previously set orders fill and rake in the money from those orders filling (whether you are taking your profits in BTC or fiat is your choice).
MistakesI think that this is a decent place to bring up that practicing the employment of your incremental trading strategy can really help to make the whole process become almost self-propelled because you kind of get into a groove.. yet, if we are humans, from time to time, we are going to make mistakes, and I suppose the same could be true if we were attempting to program bots (which I do not use), we might end up programming some aspect of the bot incorrectly which causes a screw up in our intention.
Since both jbreher and I are attempting to apply our system manually, I am sure that jbreher has had some similar experiences as me in which he has made mistakes in entering his buy/sell orders, and if he catches the mistake before it executes, then no harm, no foul. On the other hand sometimes, mistakes are made that cause either an immediate execution of the order or you do not notice the mistake until after the mistaken order had already executed..
perhaps putting in too large of an order or accidentally making a market buy/sell when you had meant to set up a limited order.
Probably about 1-3 times per month I make some kind of mistaken order that executes before I can catch it and causes me to have to restructure some aspects of my buy/sell orders in order to make up, in my mind, for my mistake(s). In those cases, I restructure my orders in such a way that allows me to either profit from the mistake or at least to largely neutralize the mistake (which might merely be my own mental framework and ability to move on from the mistake).
I will outline a mistake
example from yesterday.
Yesterday, when BTC prices reached $10k, I had several BTC sell orders execute, and I had been getting a bit anxious so I had actually lowered some of my BTC trading price intervals in order that: 1) I could get some more BTC trading action and 2) to attempt to make up for inability to sign into GDAX, but I surmised that my outstanding preset BTC sell orders on GDAX are still going to trigger without my ability to verify if they had triggered because I cannot sign into GDAX's service (those fucks).
So, after one of my BTC sell orders executed at just below $10k, I had intended to create two buy orders around $9k - one buy order just above $9k and the second one at about $9,300. When I entered the just above $9k order, I accidentally typed in $10,xxx, which caused an immediate market buy order at the then price of $10,028... and I said to my selfie, "fuck!! I had just sold at $9,9xx, and now I just bought a decent portion (about 1/4 of the total) of that back at $10,028."
My ballpark remedy for my mistake involved
on the buy end setting only one buy order, instead of two, in the lower $9,0xx range and lowering that buy amount if the BTC price were to go down to those levels. My remedy
on the sell end was to remove two of my upper sell orders at $10,4xx and $10,9xx and to parcel out my sell orders into 5 sell orders that would more than adequately make up for my mistaken buy at $10,028, if BTC prices were to go up.. Therefore my new sell orders were adjusted to be spread out and set at $10,2xx, $10,4xx $10,7xx, $10,9xx and $11,2xx.
I feel good about my ballpark remedy for my mistake, and I have become neutral in my own mind regarding the direction of BTC prices. Accordingly, in my mind, I consider my mistake to be remedied no matter which way BTC prices go. If BTC prices go up, then I profit by the way I set my additional sell orders, and if the BTC price goes down, I buy less BTC, and consider my $10,028 to have been a buy that adds to my BTC accumulation (which I am trying to achieve anyhow). I consider my whole accidental buy of 1/4 of my $9,9xx sell amount at $10,028 to have been largely neutralized by my removal of one of my buy orders and decreasing the buy amount on my other buy order at $9,0xx.
Surely, in this actual situation, I do come out better if BTC prices go up, but since I am in this whole BTC accumulation business for the long term, and I have been valuing my wealth in bitcoin (as Adam Meister says) and I am not bothered by some additional BTC that I ended up accumulating because in the long run, I do consider that my goal is to accumulate BTC and that in the long run, BTC prices are going to go up much beyond my $10,028 mistaken purchase price (which was buying back about 1/4 of the amount that I had sold at $9,9xx)..***
Hopefully, this example outlines one approach that an incrementalist (step) trader might employ to deal with a mistake that would allow: 1) to potentially profit from the mistake, and 2) to largely mentally move on from the mistake, while allowing the BTC price to come to his/her position rather than taking some more drastic (or risky gambling) measure that might either lock in losses or cause too much gambling of the holdings or stress.
*** actually another way of characterizing my BTC buy mistake is that I had sold 1/4 less than I had originally planned. because I bought 1/4 of the amount that I sold back right away, so that would have been a net selling of 1/4 less BTC.
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