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Author Topic: CAS - Trading strategy for Beginers!  (Read 29 times)
ElcinB
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June 23, 2018, 09:22:23 PM
 #1

I've noticed that a plenty of members, especially Newbies create posts like "Which coins to chose?; Bitcoin or Altcoins? How much to invest? and etc.". However, they often forget that for being successful in something as well as on trading person needs strategy. I decided to review one of the most preferable trading strategy for newbies and not only for them. Taking into account that majority of them new into trading as well, I did my best to make this post as simpler and short as its possible. So lets begin.

CAS - stands for Cost Averaging Strategy, which is used for minimizing the risk in volatile market. Usually when trader applies following strategy in stock market, he chooses the same day of the month and starts buying stocks for fixed amount of money at the current market price irrespective of whether it has risen or fallen. Some people say that this strategy doesn't suit for crypto-market.
Nevertheless we can adopt this strategy into cryptocurrency market!
Let's assume the following scenario: You have 1.5 BTC in total. The price of ETH went down to 50k satoshis, and you decide to buy it for 0.1 BTC, in a while the price goes down again for 10% and here you will turn on CAS strategy and will double your position. Some hours later price goes down for -20% and you again double your position which you had in -10% down. When price decreases for -30% you will double your previous position.

Now lets see what we have:

Price of ETH in satoshis - 50k;     The % of price drop - 0%;        The amount of position in BTC - 0.1 BTC;       Added amount after price drop - 0  BTC;       The amount of ETH - 200

Price of ETH in satoshis - 45k;     The % of price drop - 10%;      The amount of position in BTC - 0.2 BTC;       Added amount after price drop - 0.1 BTC ;    The amount of ETH - 423

Price of ETH in satoshis - 40k;     The % of price drop - 20%;      The amount of position in BTC - 0.4 BTC;       Added amount after price drop - 0.2 BTC ;    The amount of ETH - 923

Price of ETH in satoshis - 35k;     The % of price drop - 30%;      The amount of position in BTC - 0.8 BTC;       Added amount after price drop - 0.4 BTC ;    The amount of ETH - 2066

After this kind of scenario average cost of ETH would be equal to 3874, which means when price will eventually return to your first entering point you will receive 30% profit! Now decide which one is better, entering at once with all your money at 50k price and waiting till market recovering or dividing your assets and being ready for making profit even in Bear Market.

Hope that it was clear enough to understand and would be useful tool in your trading-arsenal! Wink
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Tankdestroyer
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June 24, 2018, 09:56:55 AM
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It was a nice strategy but its downside is that a newbie with an average portfolio to start with(let's say only 0.01 bitcoin) cannot keep this up if the market goes sideways for a month or two. That being said, I think the best strategy a newbie can use is to buy altcoins with potential for growth and use scalping strategy(selling immediately when already in the green) paired with daily pivots(buying in daily lows, taking advantage of volatility).
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June 24, 2018, 10:29:10 AM
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I agree that Scalping is also great one to try, and everyone should decide what kind of strategy suits for him by testing various ones.
P.S BTW think that CAS is more suitable for long term positions.
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