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Author Topic: I need help with terminology - buy and selling Bitcoin  (Read 661 times)
DrBitcoin
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April 20, 2014, 10:04:39 PM
 #1

This may be off topic, but I have a quick question.  Is there a "term" for the following type of trading activity?

Example:
Person buys x amount of Bitcoin at $500
The price of Bitcoin then goes up to $550, and the person sells a percentage, and reinvests the earnings (now the person has X + earnings in Bitcoin)
Then, the price of Bitcoin goes down to $440, so the person buys more Bitcoin
then the price goes back up, and the person sells some and reinvests.

etc.

Does anyone have any websites that point to a system, or excel spreadsheet, or just a nice set of rules to follow?
Like if it goes up a certain percentage, you sell X amount. etc.

This could work with any stock, or commodity...I'm just looking for a good system.

Thanks
-Dr. B

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amawyer84
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April 20, 2014, 10:57:47 PM
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Wish I had something online but I use my own excel spreadsheet that does the math, just record each purchase at each price and make a formula for the percentage gain or loss.  If you're doing a bunch of trades a day you might ask one of the good folks here if they have something to sell, but in my opinion having a ledger like this is essential to tracking your progress and in the long term making gains from this.
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April 21, 2014, 07:26:03 AM
 #3

Example:
Person buys x amount of Bitcoin at $500
The price of Bitcoin then goes up to $550, and the person sells a percentage, and reinvests the earnings (now the person has X + earnings in Bitcoin)
Then, the price of Bitcoin goes down to $440, so the person buys more Bitcoin
then the price goes back up, and the person sells some and reinvests.

I don't understand the part about selling some of your holdings at $550 and then ... buying it back?

I think what you are proposing is a variation of rpietila's Sane and Simple Savings plan (SSS). He proposes selling 10% every time the price goes up 100%.

My own plan is more like yours. I sell 2% of my total holdings every time the price goes up 20%, and I buy 2% every time the price drops by 20%. The goal is to lower risk as the price rises and to take advantage of price swings. It assumes that the price will go up in the long run, of course.

Here are the specifics assuming I own 21 BTC @ $100:
PriceHoldingsValueIncome
$10021.00$2,100$0
$12020.58$2,470$50
$14420.17$2,904$59
$17319.77$3,415$70
$20719.37$4,017$82
$24918.98$4,723$96
$29918.60$5,555$113
$35818.23$6,532$133
$43017.87$7,682$157
$51617.51$9,034$184
$61917.16$10,624$217
$74316.82$12,494$255
$89216.48$14,693$300
$1,07016.15$17,279$353

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gagalady
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April 21, 2014, 01:06:02 PM
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I just call it flipping but i don't know how this process is called internationally. Undecided
NotLambchop
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April 21, 2014, 01:54:08 PM
 #5

This may be off topic, but I have a quick question.  Is there a "term" for the following type of trading activity?

Example:
Person buys x amount of Bitcoin at $500
The price of Bitcoin then goes up to $550, and the person sells a percentage, and reinvests the earnings (now the person has X + earnings in Bitcoin)
...

This is where I lose you.  What's the point of selling if you're "reinvest[ing]," presumably in bitcoin?  Why not just hodl?
jamesc760
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April 21, 2014, 04:11:24 PM
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It's a modified form of HODLing. He wants profit-taking when price goes up and re-investing when price goes down. I believe there is a term for it, but I can't recall it.
NotLambchop
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April 21, 2014, 09:22:40 PM
 #7

Ah, gotcha.  In that case, i guess the term is simply "trading" (or "swing trading" or "day trading").  The difference between trading and investing is this "rince and repeat" cycle Cheesy
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