From my perspective, it is not always clear in regards to what the difference is between investing and trading, even though we have surely described various aspects that many of us consider to be trading rather than investing, yet the line is not exactly clear, sometimes, and sometimes we might end up arguing about the difference between investing and trading.
The verge of difference between trading and investment is either clear or unclear, and the difference depends on people mindset and actions.
The biggest difference is in mindset: mindset of a trader who only focus on short term volatility and profit, want to do active trading; and mindset of an investor who focuses on long term profit and aim at holding rather than active trading.
Then it's the next difference in action: like an investor can sell their bitcoins at peaks and wait patiently for dips, corrections to buy bitcoin again in order to increase bitcoin he has. It's a trading action but with mindset of investor, it's investment practice too, while surely it is risky as no guarantee on sell high and buy back lower.
A trader can sell and buy bitcoins but he does it too actively and maybe his mindset is to increase $, USDT, not too increase his bitcoins. From active trading and very sparsely trading, it's big difference between a trader and an investor.
I don't agree with your distinctions, since it seems to me that an investor in bitcoin would not sell until he reaches overaccumulation status. An investor does not sell to buy back cheaper, even if he is doing so on large price swings...
Selling to buy back cheaper is a trading practice even if he is engaging in such to accumulate more bitcoin, since as soon as he sells he has less bitcoin, so then he is gambling that the price is going to go down after he sold.
It seems to me that an investor only sells in contexts of spend and replace or after he had already reached overaccumulation status, so if he is in overaccumulation status he is selling within parameters that he does not need to buy back, and sure, if the BTC price goes down after he sells he can buy back, yet he was not selling with intention to buy back. He was merely selling within his overaccumulated amount.. so it would not matter if the price goes up, down or sideways.
Another thing is that I consider that guys should be valuating their holdings based on the 200-WMA.. which are bottom prices, and so historically, the bitcoin price has not spent very much time below the 200-WMA, so perhaps the person might ONLY have restrictions on his selling, after reaching overaccumulation status if the BTC price is within 25% of the 200-WMA or even lower.. and you can see some of my ideas about time based sustainable withdrawal and also price based sustainable withdrawal in
my sustainable withdrawal thread.
No matter the case, part of my point in proclaiming that the line between trading and investing is unclear is also supported by your own definition of what you believe to be an investor (based on mindset) engaging in practices that I would consider to be trading rather than investing since he is selling some portion of his bitcoin with intentions to buy back cheaper, which I would consider a BIG no no in the investor camp, even for someone who I consider might have had reached overaccumulation status, and it is even worse, from my point of view, for someone who has not yet made it to overaccumulation status, since I think that investors should ONLY be engaging in buying techniques - and especially while they are still in the accumulatoin phase of their bitcoin investment.
but a good investor does not only wait for dip season to buy but constantly buy through DCA over a stipulated period of time and hold for very long-term to make good return
Surely, investors ongoingly do there DCA accumulation and then can buy from the Dip when opportunity comes if they have extra cash saved up for the Dip. But where I want to add something is where you mentioned above that investors constantly buy through DCA
''over a stipulated period of time'', and I begin to imagine what you actually mean. Do mean that they and/or should pause there DCA buys?, or they take a break sometimes and switch to other buying strategies? Don't you think that if they buy using the DCA for a stipulated period of time that you mentioned, that it might affect there possible planned accumulation since buying the Dip or other strategy may not be steady and/or the investor may not have enough income to aggressively buy from them.
I think the DCA should be continuous and consistent (non stop), not for a stipulated period of time as you put it, since it ensures consistent accumulation within your means from your discretionary. Even though the investor has extra cash to buy from the Dip or buy a lump sum, I think the DCA buys shouldn't be paused and should be allowed to run weekly or monthly depending on your cash flow. By this, you are assured of a constant gradual growth of your BTC portfolio no matter what
Yes, I also found that statement of "over a stipulated period of time:" from bestcandy to have had been ambiguous in terms of what it means and/or how we might know that we might have had achieved our target accumulation level. .and time is only one of the factors.
We must agree that we have both time and amount (or price) as our relevant factors, and some guys might be starting from a position of a steady income, and other guys might be in a part of their life where their income is increasing, yet then their age (timeline) can affect where they are at, yet their timeline could be flexible too, since it might not be good to try to transition into fuck you status based on a certain age or timeline unless the wealth level has reached a high enough level to support the guy so that the lost income from going into fuck you status (that means quitting the work) would be sufficiently made up from starting to sustainably withdraw from bitcoin.
A person who is brand new to investing into bitcoin may well at best be able to proclaim a 4-10 year or higher expected timeline for BTC accumulation, yet more realistically, the person might be thinking that it could take 20 years or more to get to a place that the bitcoin might be able to support the targeted standard of living.
I frequently like to think in terms of how much of a person's annual income could be put into the bitcoin investment, so perhaps almost the perfect number would be able to put 25% of the income into bitcoin over 4 years, and then that would mean that a whole year's income would have had been put into bitcoin over those 4 years.. yet that still might not be enough put in and it might not be enough time either, since we might not even know what the BTC price might do over the 4 years, even though it might be more predictable within 4 years (a shorter timeline) as compared to trying to predict 15 to 20 years or more into the future.
So maybe time and amount invested would have to be coupled together, yet that still might not give us much reassurance except maybe to reassess progress in the bitcoin accumulation and valuation of it from time to time at various time points in the process of building up the bitcoin holdings and figuring out what to do based on such accumulated bitcoin holdings and also figuring out how valuable they are, which would translate into some kind of a purpose for the BTC holdings based on their valuation..
From my perspective, it is not always clear in regards to what the difference is between investing and trading, even though we have surely described various aspects that many of us consider to be trading rather than investing, yet the line is not exactly clear, sometimes, and sometimes we might end up arguing about the difference between investing and trading.
It seems that one of the ways that we have tried to differentiate investing from trading is to proclaim that investors ongoingly buy bitcoin and they do not sell their bitcoin, except maybe to sell and replace.
So we might suggest that three ways of accumulating bitcoin is to buy right away, DCA and buy on the dip, yet selling to buy back cheaper does not count as investing and it is trading rather than investing.
If I could remember vividly, earlier this month I was scrolling through X then I saw an interview of Microstrategy CEO Phong Lee explaining the difference between trading and investing in Bitcoin and i so much love the way he puts the concept. Let me paraphrase what he said " traders are more like people with multiple screens in front of them making buy and sell decisions at the milliseconds levels whereas investors are those who buy an asset when ever they have the opportunity to raise capital to buy" and the distinction from his explanation is the sell choice that he didn't mention while explaining the role of an investor, meaning investor are commonly not know for making sell decisions anytime they like.
However since investor don't make quick sell decisions that means their goals are definitely fixed on continually buying and holding long term asset like bitcoin and not shitcoins or shit projects that requires selling after a few month.
I suppose that distinction might somewhat fit with my own sense of one of the distinguishing areas, even though surely I know in practice the two will frequently overlap.. so in common parlance, some of their practices and/or mindsets (as black boss put it) are likely to overlap.
I do tend to gravitate towards my own definition, yet I am not going to proclaim that my own ideas are not going to clash, from time to time, with various definitions that I read and also sometimes cause tensions that might not always be necessary to have since ultimately there is still quite a bit of latitude in what guys do and how they describe what they are doing.
I recall one time a few years ago, I was explaining my own practice of selling on the way up and buying on the way down as portfolio management rather than trading, since I was selling without any expectation of buying back, yet if the BTC price drops below a certain amount, then I end up buying back, yet I don't give a shit if the price drops or not, and I would prefer that the price would not drop, so I am selling such a small amount and with an expectation that the BTC price will continue to go up and I will be forever locked out from being able to buy the sold amount at an equal or lower price than what I had sold it at, and therefore I make sure that my sell amounts are sufficiently small and also within amounts of BTC that I consider to be extra amounts that I own.
I am not even going to proclaim that my own perception of the matter, my attempts to distinguish between investing and trading, and my practice around my own bitcoin holdings is unambiguously clear even though I proclaim that within my own system of my BTC portfolio management I am not trading when I sell BTC as the price goes up.
We must first assess our capabilities before investing. If, after calculating everything, our income proves insufficient to allocate funds for investment, then we should not force ourselves to do so. It would be better to first build a business to generate additional income. It's unwise to force ourselves to invest, especially if it sacrifices something we should prioritize.
Investing is meant to secure a future, but it shouldn't complicate our lives now. We must be able to distinguish between what should be prioritized and what we can pursue. Investing is something we should strive for if we can't invest now.
You seem to be creating more obstacles than necessary in terms of any ability that a person would have to get started investing in bitcoin.
in order to get started investing all a person needs is some common sense and discretionary funds, so then once they get started, they might need to work on improving their income situation - including assuring that they have discretionary income on an ongoing basis if they want to continue to invest in bitcoin, and they likely need to have enough income to cover their expenses if they want to be able to hang onto their bitcoin investment and not have to tap into it at a time that is not of their choosing.. including that many guys (including me) consider that bitcoin needs to be at least a 4 year investment and even better a 4-10 year investment in order to count as an investment rather than as a trade, and even there is likely no reason to have less than a 10 year investment timeline unless the person has age and/or health considerations.
So continuing to invest in bitcoin is different from getting started investing into bitcoin, since getting started only requires discretionary funds and common sense. There is no need to have all aspects of your life in order, yet anyone with common sense should be able to figure out ways to modify the amounts that they are investing into bitcoin so that they are not getting themselves into trouble in terms of their finances, which would include that anyone should realize that he cannot spend absolutely all of his existing money on bitcoin, otherwise he might end up screwing up and investing beyond his discretionary income. Frequently any of us need to have and continue to maintain cash cushions so that we are not spending beyond our discretionary income and also to cover lowering of our income and/or increases in our expenses, and guys who have common sense will already have these kinds of ideas in mind at the time that they start with their investing into bitcoin.. and perhaps learning about bitcoin and investing into it at the same time.
No sir, I don't create a lot of obstacles to start investing, what I do is try my best to make our investment go well with full preparation at the beginning. Investing today is different from the investment when I started, I mean when I first invested there was no one to guide me directly, while now my friends have people who can direct directly.
Not to brag, but usually some of my friends come to ask me directly. And I share my experience with them how my investment journey was and what mistakes I made so that it could hinder. So what I said before is based on what I felt during my investment journey, and careful preparation in my opinion will be much better for our investment journey.
I stand by my earlier posts. There is no need to get all worked up about figuring out matters before getting started. Newbies can get started and figure out the various details along the way.
If a person is brand new to bitcoin, they have no bitcoin, so you want them to wait before getting started? You are not even clear about how much preparation is needed, and you seem to be presuming that newbies do not know the right things, so there is some kind of secret thing that they need to know, and the fact of the matter is that all they need to know is whether they have discretionary funds or not.. and if they have discretionary funds they can start.
Sure, they might need to continue to learn once they get started, yet if they are getting started, they can learn within the context of investing, and if they have no fucking clue about what they are doing, then they are likely to be better to start off with $50 or $100 rather than starting off with $1k.
Another thing they might need to do is look at a bitcoin price chart, and they can see that the number tends to go up, yet anyone with common sense, should well realize that the number does not always go up, so they have to temper their starting amount so that they can get used to that in the short run the number could go up or it could go down or it could go sideways... So in that regard, they can figure out the starting amount, and then each week they can figure out if they still have discretionary income, and they can work on putting a system in place so that they can buy bitcoin no matter what every week and no matter the price, and as the weeks pass, they can keep on studying and learning...
Instead what do you want? you want the newbies to come to you and ask for advice on how to get started and which pieces of information that they need to have besides having common sense and an ability to determine their discretionary funds in order to get started and to learn whatever else along the way? Which parts are missing from common sense and discretionary funds that is needed? What are you presuming about people that causes them to have to delay in their getting started? You and your friends offer some kind of a beginners' course based on other things that the beginner might need before getting started in bitcoin?
[edited out]
I think an investor should not withdraw his Bitcoin holding completely after reaching the excess savings stage. Some part of the discipline and patience that has been required in the process of saving Bitcoin for a long time should be considered for sustainable withdrawal. Because the price of Bitcoin can increase further. The main purpose of investing is to take profit but if you withdraw the entire amount of Bitcoin holding after reaching the excess savings stage, then you will have to start again according to the current market price. That is why I recommend that it is the right decision to be stay bitcoiner rather than a bitcoin zero level. Start DCA from the previous holding level rather than new starting.
Once a person reaches overaccumulation status, any bitcoin that he sells should not knock him out of overaccumulation status.
So the amounts of the withdrawals would never be so much to knock a guy out of overaccumulation status.
I suppose part of the reason that a guy might want to have some cushion of bitcoin that is higher than his overaccumulation status level is so that he does not have to worry about knocking himself out of overaccumulation status.
Let's say that a guy had been working with an income of around $30k per year, and over the past 10 years, he had been investing around $100 per week into bitcoin, and his goal was to quit all of his work once he feels that he is sustainably able to draw $80k per year from his bitcoin investment. So the guy had invested around $50k and he had accumulated more than 16 BTC. When he looks at the sustainable withdraw chart, he sees that
right now, he ONLY needs 14.253 BTC to sustainably withdraw $80k per year, so in essence, right now and within this hypothetical, this hypothetical guy with about 16 BTC has about 1.75 BTC more BTC than he needs for the threshold level to be able to start to withdraw $80k per year or $6,666 per month from his bitcoin holdings on a sustainable and perpetual basis.
If the guy is withdrawing at $6,666 per month or $80k per year, he should never ever ever have to buy any more bitcoin in order to continue to withdraw BTC at that rate forever into the future. Furthermore , I personally believe that it is the case that bitcoin also allows for a guy who has reached overaccumulation status (based on the valuation of the BTC based on the 200-WMA) to increase in the dollar withdrawal rate to be increased 7% per year for each year and forever into the future, so yeah, year 1 right now he would be withdrawing $80k per year, then year 2 he would be withdrawing $85,7k per year, and year 3, he would be withdrawing $91.6k per year, and year 4, he would be withdrawing $98k per year, etc, etc, etc. so that continues to go on forever and ever into the future.
Of course, it is assuring (and more comfortable) to have a cushion in the amount of BTC that has been accumulated in case the calculations are wrong and/or if there seem to be times in which the bitcoin's value is not growing faster than the anticipated withdrawal rate... and various reassessments can continue to go on while the withdrawals are already happening and to see if any adjustments need to be made in regards to the withdrawals being sustainable.
It is not just about being patient it is also about doing the things that is required properly because even if someone is patient and he or she is not accumulating properly, that is not buying consistently, selling at any little profit they see in the market etc that investor will not get any meaningful rewards because they won't be able to accumulate or grow their portfolio so big and there is no much difference between them and traders selling when you have not gotten to overaccumulation stage or selling often is an act of trading. Do you know some people use to be patient but they are not serious with their investment and so it is more like a waste.
These are definitely not the characteristics of an investor, a real investor will only think long term, should continue to buy without worrying about the market fluctuations, the characteristic of a real investor is consistency in buying and holding for the long term without any panic or short term greed. One must be patient, investors can never have a restless attitude, if there is restlessness, one cannot be successful in long term investment, it can only cause regret in the long term.
If a bitcoin investor is restless, then he is likely either overinvested or underinvested in bitcoin, so he likely needs to take some actions to get himself (and his bitcoin holdings) into a better and more balanced status in order that he is no longer feeling restless in regards to his bitcoin holdings.
