Quote from: JayJuanGee on March 03, 2024, 11:46:13 PM

Quote from: I_Anime on March 03, 2024, 07:09:05 PM

Quote from: JayJuanGee on November 24, 2023, 03:33:22 PM

As I have mentioned in various other places, my first year and a half in bitcoin from late 2013 to mid-2015, I was almost exclusively in BTC accumulation, so whenever I sold any amounts of BTC, I would immediately replace whatever I sold. Even though I had largely concluded that I had reached my overall BTC accumulation goal by late 2014 (which was to invest an amount that equalled 10% of my investment portfolio into BTC), I continued to accumulate some BTC in 2015 (the BTC price was quite low through the whole year, but also my additional cash was not really very much), and so by the middle to end of 2015 I was getting to be around 13.5% accumulation into BTC into my quasi-liquid investment portfolio, so I started to consider that I had gotten into a state of 0ver-accumulation - or a conclusion that I had too much BTC, so I was not really sure about how to deal with my over-accumulation status, except to create a plan to be able to sell BTC on the way up, some variation of Risto's SSS plan.

well I went through the post but I think I would go through with it again for more solid understanding, this part quoted you actually said something that caught my interest, concerning the selling of some profit in your bitcoin and replacing it. We all know that whenever bitcoin dip your coin don't reduce in quantity but the value does. But when you selling from it you are actually reducing the quantity of your bitcoin right. And we know buying low price would give more advantage's buying in high price , like when Bitcoin was $25k those if you purchase $1k worth of bitcoin at that time you would endup with 0.04 BTC , but if you purchase that same amount which is $1k worth of bitcon when the price was $50k you would endup with 0.02 worth of Bitcoin, which is lesser than when you purchase at $25k.

So In a scenario where I purchased $1k dollar worth of bitcoin at the price of $25k, having 0.04 bitcoin and lateron the price rose to $50k and I sold out 0.02 from my bitcoin that am holding, having the mindset of replacing it back, and lateron price experience a surge to the price range of $69k and kept increasing. If I want to replace it then what step should I take should I wait or the or should I increase the money want to I wanna use to purchase to coverup 0.02 bitcoin at that price range of $69k and above.

Please hope this wasn't confusing, and if I had made any mistake please do so in correcting me .

You are referring to my post that relates to my raking tool that is based on rpietla's SSS plan. And, rpietla has a thread on that too that is linked within that post.

The foundation of the raking tool is that there is a presumption that you have already accumulated more than enough BTC, so there is a certain presumption that whenever you sell any BTC, you are selling with an expectation that you might never be able to buy back, so in that regard you would not sell for small profits, even though you may well only sell a small portion of your BTC holdings. For example, no more than 10% of your BTC stash for every time that it doubles in price.

The tool that I created does have a section in which you can calculate a probability that you would be able to buy back the BTC that you sold in up to three possible levels, so it is not exactly intended to be used for trading, even though you could sell some small parts of your BTC holdings and then just keep the money (proceeds available) in case the BTC price drops to a certain percentage amount and then you would buy back using some or all of your proceeds from what you had sold earlier. I tend to describe these kinds of tactics in terms of insurance for downside rather than trading or necessarily wanting to get more BTC buy buying back lower, but if the BTC price happens to go down to a great enough extent to trigger the buy back of some or all of the BTC, then that would be a kind of side benefit.. even though the overall presumption from my perspective is to sell such a small amount that you are not intending to buy back.. but if the BTC price goes down you would end up buying back.

You can set those buy back levels wherever you like and you can also attempt to use all proceeds to try to buy back lower or you can remove the proceeds so that you are not using proceeds from whatever you sell to buy back in the event that the BTC price goes lower.

There is also a link within that post in which you can go to fillippone's Google spreadsheet and you can input your own numbers in order to play around with the various possibilities to see how the numbers might vary.

Of course, in your example, if you bought $1k worth of bitcoin at $25k and you ended up getting 0.04 BTC, then you could sell half of that amount at $50k to get your $1k back, and potentially try to buy back cheaper. I surely don't play around with my BTC in those kinds of BIG ways (you would be gambling rather than investing), but instead if you might start to withdraw some BTC starting at $50k and you ONLY have 0.04 BTC, then maybe I might consider potentially selling up to 10% of the BTC stash the first time that the BTC doubles, and then if I wanted to stay consistent, but I did not want to wait for the BTC to double each time, then instead I might sell up to 2.5% of the BTC stash every time that the BTC price went up an additional 25%. So if we did not calculate buying back, and we strictly consider selling without buying back, then formula for the selling rakes that I described would look like this:

You see that the total value of the BTC holdings in terms of dollars keeps going up and you are not raking off more than just a portion of the profits, so that you still are able to enjoy compounding effects, which you run the risk of not enjoying compounding effects if you sell off too much of your principle. Of course you can play around with the numbers, and you may well prefer to shave off higher portions, but I think that you are nutso if you shave off half the profits merely because the BTC price doubled, then you have absolutely no compounding effect and you end up losing a lot of bitcoin's potential Upward price power.

For sure, in the end, you can do what you want.

Now let's say that you want to use 100% of the proceeds to try to buy back lower, so you try to figure out your chances of buying back upon certain price drops, which surely is going to have lower probabilities the lower that you expect to be able to buy back, so you can plug those into your expectations and it might look something like this.

You set three buy back orders with a 10% drop, a 20% drop and a 30% drop, and you assign probabilities of 30%, 15% and 8% respectively. With the buy back you end up with more BTC with the passage of time and you also end up having had raked more BTC into dollars (meaning a higher dollar value raked).

So there can be advantages to buying back, as long as you attempt to set some realistic expectations and don't overly expect to be able to buy back, which would include not selling a lot on the way up so that you can profit on the upside.

Now if your goal is to accumulate BTC and you feel that you have not accumulated enough BTC, yet, then you probably should not be employing any kind of tools to sell BTC with expectations of being able to buy back, since it seems that you need to first get to a certain high enough level of BTC so that you generally have the sense that you have accumulated enough BTC to be able to feel comfortable shaving some BTC off along the way as the BTC price likely goes up with the passage of time. I hardly would consider 0.04 BTC to be even close to enough BTC to start such a selling on the way up technique since you are likely still accumulating BTC.. so you would be selling with one hand and buying with the other, yet at the same time, I am not opposed to those who might continue to buy BTC with a DCA method and then try to supplement with some kind of raking strategy, even though it seems a bit contradictory and you may well end up either confusing yourself and/or realizing that instead of buying and selling, maybe you should just focus on buying until you have enough (or more than enough) first before prematurely fucking around with selling.

You know asking questions would give you proper understanding (which just did for me). Thanks for the clarity really appreciate it, this actually nice and easy to make use of . Well I haven't gotten to the stage in my bitcoin accumulating to think of start using such epic strategy, I don't want to any means trade with my bitcoin but to hold till I have meet my accumulation goal. But I would make sure to copy the link of this reply so that I can easily access it when needed, Because it as just answered my question properly .