⭐ Merited by JayJuanGee (1)
Bitcoin isn't predictable and some fancy lines won't help either whether they come from a guru or not.
Sometimes the squiggly lines have persuasive power that contributes to the assignment of higher probabilities than they deserve.. even though sometimes the squiggly lines might also end up working.. or appearing to work.
That's indeed true to a certain degree, but it mostly applies when there is a lot of sideways price activity and then people draw their lines and the more people promote the same line, the more these lines work like some kind of catalyst for herd behavior. But at the end of the day the losing trades are the relevant trades. As you have said before, it needs one trade to wipe out winnings from nine (or any other number) trades. As we have seen with the recent crash, I am sure a lot of traders lost while perhaps a handful won, but even those who won were probably gamblers betting on a crash with leverage. If you can afford these trades without harming your total holdings in a way that it truly hurts you, then it is fine. Go for it if you like it, but since we are also talking a lot about DCA, it makes it especially painful when someone sticks to the set DCA rules and then destroys weeks and months of consistency because trading was too tempting.
So yes, I wasn't actually recommending to use simulators in order to develop a proper understanding and learn how to manage emotions. Of course, real money is the real deal here but I hope not too many people fall for the dream that day trading makes them rich. In many cases a simulator for a week would probably enough to prove that they can't predict the price.
There are certain personalities drawn to it, and yeah sometimes a few successes might contribute to more boldness and/or greater confidence.
If a person has a day job and they are trading on the side with some of their extra money, then I suppose that could help to learn and they are still getting their income from their job.
The most I hope to accomplish is perhaps to attempt to convince someone to limit their exposure to trading to no more than 10% the size of their bitcoin holdings and without cheating (and keeping on drawing into the bitcoin after they lose it), and sure there could be some cases in which a person has concluded that he is good at trading, so there surely can be more and more and more temptation to tap into more and more capital in order to make more money (and to make it "worth their time," so surely the whole trading practice is problematic in regards to slippery slope dynamics of getting lured in more and more and more...
Personally, I would rather talk about investing and cash management techniques, anyhow, and sure if there might be ways to be profitable in trading, then there are threads to specifically talk about those kinds of things.. and this thread does not seem to exclude such discussions about trading.. although trading discussions sometimes will devolve into talking about shitcoins, and surely we are not in an appropriate thread to devolve into shitcoin discussions.
Hell no, but I guess for those who are truly new to this field of digital money, it is probably normal for them to watch out for the "next big thing". Sticking to bitcoin from day 1 requires a reasonable amount of research (and IQ I guess?) to understand why this bitcoin ecosystem is likely to have long term global consequences and impact. I admit it is not easy to grasp, but in contrast to over 10 years ago, sources are plenty these days, albeit not all of them are good or helpful of course. That's why I often think that those who do understand it have good reason to repeat it over and over again. Basically what you are doing here in the forum.
The thing is that I believe those with not a lot of money at their disposal should ALWAYS use DCA whenever they have a long term plan because price drops wouldn't make them nervous, shouldn't make them nervous. They can see their BTC stash grow faster when BTC drops and that is actually their goal and why they want to day trade. They want that BTC number to go up in the first place and that is what's happening when they buy for 50 USD a week and BTC dropped in price by 20%. Their BTC account is growing faster.
Sure. Accumulating more BTC would result in portfolio value going up once the BTC price goes back up...so yeah, there is a longer term rather than shorter term need, and surely, people can also get distracted by merely being in profits, so then they may want to start to sell too much of their BTC too soon when they get into profits by a certain level, which might end up screwing them later down the road if they end up selling too much too soon.
Trading is maximum risk and usually for those who already have quite a lot of money and are willing and able to put it on the line. But there is a reason why many of these dormant whale wallets don't make a move for years or sometimes a decade. These whales might still be trading with a portion of their holdings they have elsewhere, but the big wallets are just dormant for a good reason.
Sure, probably playing the big moves is a better strategy than attempting shorter term trades... but yeah there can still be weighting problems with any account in terms of how much might be kept in dollars versus how much is kept in exchanges, and surely there are some folks who keep large portions of their BTC completely off line, so I would imagine that you are mostly keeping some BTC on an exchange out of a possibility to sell some or all of it at some point, and the same is with keeping cash on any exchange for the purpose of using it to buy some or to use all of it to buy bitcoin... so yeah, there can be a question regarding how much BTC and dollars to keep on exchanges.
up until 2017, I kept quite a bit of my overall value on exchanges (probably more than 50%), and I suppose I had extra of both dollars and bitcoin on various exchanges "just in case." In late 2017, I downsized to about 20% of my value on exchanges, and then around 2020 I was down to about 12% of my value on exchanges. Around early to mid 2022, I got it down to about 8% and I think these days I might be around 5% on exchanges... so I am trying to keep the amount somewhat streamlined, and anything that is there is already in buy orders for dollars and sell orders for BTC... My buy orders go down to $25k-ish..and my current sell orders go up to $150k-ish... and over the years the spread has gotten bigger and bigger both in terms of dollars and also in terms of percentages, but even sometimes when the price is ranging, I do end up narrowing the spreads.. .. so there is the spread between buys and sells that can be tweaked, of course, the amounts can be tweaked and the increments between orders can also be tweaked.. so don't get me wrong, I don't sell with any expectation of buying back, so the amounts that I sell are quite small, so I think even if the BTC price doubles I am authorizing myself to sell up to 10%, but my sell orders amount to less than 5%.. and my buy back orders are slightly greater than my sells.. which over time had caused my lowest buy orders to move up from sub $20k and currently right around $25k. ..and right now, I am having a hard time imagining any buy orders below $35k being executed, and surely I am not even holding my breath for any of those lower buy orders to be implemented.. including that I never even want the BTC price to go down rather than up, I am way better off if the BTC price goes up rather than down, even though I have maintained both up and down orders since about mid-to-late 2015, and prior to that I ONLY had buy orders.. through the whole of 2014 and more than half of 2015.
I guess we are all the same and at some point kept some, or too much, on an exchange. But I have been around for quite some time and learnt a few lessons, painful lessons. The last one that once again opened my eyes was the FTX demise. Nobody, really nobody saw that coming, which now with the information one has is essentially surprisingly stupid given what kind of dude was running that whole operation. But when the really big guys like hedge fonds and advisory giants lose tons of money, then everyone can be fooled I guess. FTX was another great lesson for everyone who refuses to take their BTC off exchange due to laziness. If it makes sense for people financially and for security reasons to leave it on there, then that's ok. But larger amounts, better think twice.
As for people being hesitant because of all the downside risks they see, my impression is a bit more positive as I know people who bought BTC where I never thought they would. Some in their mid 50s, even 60s, and often times they don't fully understand the technology behind it, but they slowly but surely get this idea why it is very likely to be around for a very, very long time. Lots of people are changing their minds for the better, but it is of course still true that the vast majority is still skeptical although only a very tiny fraction of the skeptics could tell you in a few easy words what bitcoin is about. They are still in ignorance mode. But I am convinced that with time passing by, more and more people will either voluntarily learn about it, new generations grow up with it as if it has been there forever, and some people will learn the hard way when one day they ask themselves why their fiat can't pay the same amount of stuff it was able to pay 10 years ago. It's already happening and the number of people approaching me asking about bitcoin did certainly increase over time.
Well yeah, some of the fiat people who failed refused to buy bitcoin are asking why that bitcoin holder has not suffered the same denigration of wealth as the one who had failed/refused to invest in bitcoin, and yeah, so we have already been undergoing what may well be the greatest wealth transfer in history from the no coiners to the coiners, and some of the no coiners will realize earlier than others (do we call those precoiners?), and so yeah the wealth transfer process can be uncomfortable and at the same time, it also can be a bit subtle.. especially while it is happening and without using a zoomed out perspective.. and people frequently don't even believe in the zoomed out perspective when they see it.. many nocoiners and bitcoin skeptics will see the zoomed out perspective as an unsustainable bubble rather than as the wealth transfer evidence that it really is.
I like the term "precoiners"!
I am sure there are a lot of precoiners out there. Probably everyone who is 20 years away from death. If bitcoin keeps expanding and in 10 years from now there are people without holding a single satoshi, I guess it must be people who are about to die anyway. Others would be hardcore deniers. But one thing holds true: most people can't resist selling back and forth when they get started with bitcoin. Stories when someone sticks to a plan from day 1 are quite rare.
It is probably o.k. to play around with trading if there is some kind of way to limit your practicing amount.
Let's say if a person comes to bitcoin and such person already had spent 15 years or more building his investment portfolio and he has right around $500k in networth through various quasi-liquid assets, so he decides to invest 15% into bitcoin, which would be right around $75k into bitcoin, and yeah maybe the first issue is how to accumulate such bitcoin, so then once he establishes his position, then he might be tempted to trade and/or to fuck around with shitcoins... so if there is a limit of 10% towards shitcoin and/or trading, then at least he would ONLY have a total budget of $7,500 for those things.. and hopefully he would be able to live within such limitations in terms fo whatever experimenting that he might attempt.
Another thing is that if he decides to continue to invest $1k per month into all of his various holdings.. so if he sticks to investing 85% into his traditional investment ($850) and 15% into bitcoin ($150), and so maybe from the bitcoin investment, he might want to take 10% and put into his shitcoin pot and/or his trading.. so that would be around $15 per month that could go in that direction based on these parameters. Surely, folks can create whatever parameters and limitations upon themselves....and sometimes people who have already spent a decent number of years building their investment portfolio, they are not going to be very inclined to be fucking around with either trading or shitcoins, and so we likely can logically infer that much of the temptations of trading and/or getting into shitcoins more likely comes from folks who are trying to get rich quick and they might not even know how to set trading and/or shitcoin limitations upon themselves, when they also should be focusing on bitcoin first and bitcoin investing first, but they may well get lured into trading and/or into shitcoins rather than focusing on first building their bitcoin stash.
That's the right approach and as I said above, there should be enough resources for people to learn from that there is no such thing as a bitcoin killer. I have just seen some more about Onecoin, this gigantic scam that never made anyone a single dollar and yet they managed to scam people for several billion dollars. Everything was a lie and millions of people fell for it. There will still be people falling for those scams in the future, but I hope that scams of that magnitue aren't possible anymore.
My impression is that those who have substantial amounts of money available for investments are rather inclined to go into BTC with a rate closer to 100% and stay in it long term. The less money people have, the more they are inclined to double it up and this is a serious threat in this market. Too few people do the research and familiarize themselves with numbers like relative number of people owning BTC globally. If they figure out how little that number still is, they would also be able to see the growth potential. But many of them only watch the charts from the past and try to find a coin that does these insane jumps again.
And of course this thread is about buying or selling and maybe timings or so, but it's all a very individual matter eventually. There is no one true approach. But some basic things we brought up here should be sticked to and I think one is that someone should develop a target as to how many BTC they want to own and then don't consider selling until the target is reached. After that, strategy could be recalibrated.