I keep 50/50 fiat/btc in an exchange. I keep two bid/ask orders 11% below/above the current price. During big swings in either direction I manually change that difference to 20% or more.
What happens if big dump happens, you auto buy BTC with all fiat? It might be problem to sell the BTC for higher price than you bought, no?
I keep most of my BTC in cold storage, and just a couple to play with like this. In the case of a big dump, I am happy to buy more coins cheap. I believe in the future of BTC, and believe that it will mostly go up in the long run. I would be more worried about a big rally that kept going on, and having more $$$ than BTC at the end.
It's
Goxtool, a bot in Linux running a
balancer strategy and if it keeps going in either direction it continually places smaller and smaller orders to not get too far from 50/50. I can sleep and work knowing it will catch changes. In the present rally, I have it set for 20%, so that also slows it down (and reduces Gox fees with less frequent trading).
I am a computer guy, not an investing guy, here were my Four Steps to Know That I am Not a BTC Trader (at this point).
1. Newbie, bought half a coin.
2. Placed an ask for it all 50% higher, it hit.
3. Placed a bid for it all at a steep profit, it hit. I SHOULD QUIT MY JOB, THIS IS EASY!
4. Repeat a few times, lost $80. I DON'T KNOW WHAT I AM DOING! THIS IS NOT SO EASY!
So, running the bot is a lot easier and a lot more reliable than me doing it. It basically buys on the way down, and sells on the way up in small amounts. The BTC market is strange and fascinating, and I have learned a lot.
