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Knifecatching

Defensively aggressive laddering dips - "Knife Juggling" I contest that Crypto is currently not bull and bear, but pigeons and eagles. "Just buy the dip" and "HODL" are two bromides of wisdom for the pigeons, kindly given by the eagles. Ways to keep skittish retail from panic selling and causing even more volatility. But clearly in a volatile market with big swings (10-20% within hours), buying dips is a good strategy. But we are sagely warned against 'catching knives' - get confirmation before buying. Great, but whenever Bitcoin shits itself the market drops with it, and Bitcoin is more erratic than modern politics, which means you can timidly wait a long time for a good entry... and still catch a knife in the hand. HODL is also cute. "Just buy whatever the market is doing, don't try to time the market". Michael Saylor, gigachad himself, bought 500 million worth of Bitcoin for 37.6k average... within a week it was trading consistently under 32k. The circumstances there are a bit different, as held in fund etc, but one can't help but think a bit of timing the market would have been wise. If you bought Bitcoin at 65k, and it slumped to 55k, and then it was clearly heading down, why wouldn't you sell 'at a loss' and buy back in later? More satoshis for the same amount as the original investment, even if the first cash out was less money than you originally put in. Stressful and with some risk, I grant you, but not dumb. This is what all money managers do, but we are told dilligently not to do it - one rule for the pigeons, one rule for the eagles. But one great idea from HODL is the Dollar-Cost Averaging... If you are 'under water' on an investment, you can keep buying back in as the price craters. There is a horrible amount of sunk cost fallacy to it - throwing good money after bad - but you can reduce your break even sale price quickly that way. How does this fit in with catching a falling knife, or rather knife-juggling , you ask? Well, if you keep track of your DCA, and you are using an exchange with lower fees (eg Kraken) rather than something with a high spread (eg Uphold), you can buy dips and sell tops slightly safer. IDEA This is more for swing trading than 'investing'. Invest in bear markets, sell in bulls... let the pigeons get that backwards. With this technique you are still able to aggressively buy dips, as long as you believe the market is in an overall uptrend. It relies upon laddering in (multiple buying points) on the way down, and taking decent profits sensibly on the way up (don't sell all in one go, but take some off the table whenever there is a big move - do not sell below your break even price (BE)). If you are tracking your DCA, as you take profits on peaks, your BE. As your BE price drops, you can use that for your new stop loss limit level, and use BE*1.05 for your stop loss trigger... ensuring you get 5% return whatever. You could also split it, so half your remaining bag stops at that level, whereas the other is stopped as high as possible but decently below a key support to allow retracement. You can then set limit order buys on a small amount above good support lines, which should provide a base in times of market fear. You will often snipe a good deal and it will roar back up. If it is being pushed down by BTC price action, it often recovers quickly, regaining that support level, reducing your risk. NB: If you buy into further dips on the way up, your BE will also rise, so be careful if your BE is close to market or has no support cover. NB: If you buy into further dips below your BE price, because the market has dropped since your first entry, your BE will also drop, thus making it easier to get out of your position without a loss (especially if you bagged some profits when possible) when it next upticks. It does rely on eventual market upticks, but that's crypto. Keep your head, don't panic sell, and try to clear out of your holdings now and then to reassess the market. Be clear what you are investing in, and what you are trading in - they are different strategies. And no shit half the battle is good entries and exits. Sell into strength, buy at peak fear etc, but try to get the meat of the move. Good luck. HOW No Pro, no Show :'( - See comments In arrange QUANTITY and PRICE in two columns, and just copy the trade numbers from Cryptowatch etc. BUY is simply quantity, but SELL is the negative of quantity. (eg 50 | 0.10 ; -50 | 0.15 ) Sum the quantities, which should give you your current holdings (check!) Then use =SUMPRODUCT(B8:B24,C8:C24) to add all the multiplied quantities and prices. You then divide that by the sum of your current holdings (repeat the sum equation or call that cell) Voila. That will give you BE, and *1.05 will give you BE + 5%, giving you your SL price to ensure a profit. Figuring this out has helped me deal with swing trading the schizophrenic BTC/Alt market the last week or two. --- Let me know if it helps, or if you think it is ridiculous/sophomoric/dangerous. I'm also fairly new - but not doing terribly.
TLong
by JohnWukong
1
Trading styles. Part 1/5. The 4 different kinds of bottoms.I see 4 types of bottoms. Most retail try to buy at the bottom and lose, this might indicate that it is a fool's game and best avoided, but if it is used intelligently, within the correct bias, or going with the higher timeframe trend, or just to put it generally, inside of a smart positive expectancy strategy, THEN it can be a powerful tool. I still think this is dangerous and requires plenty of experience and understanding markets in general, as well as the specific market very well. Type A: The rock solid bottom. The price hit a wall and buyers stopped sellers, that are unable to push the price to new lows, even thought they are trying. What looks exactly the same but is not it: I enter inside of the consolidation, more in the middle, once it is perfectly clear. Trying to buy at the bottom of it is plain stupid. 100% of those that try lose. Type B: A bis. Less clear, quicker one. The buyers have stopped the sellers (and vice versa) for a few candles, and then manage to reverse the price! What looks exactly the same but is not it: Here I think it is more interesting to enter at the low. Or once we break above the high of the consolidation. And better have strong reasons to think this is a reversal point. Type C: Opposite forces started showing themselves. Also know as "the divergence bottom". I assume 90% of the time or more there is going to be RSI / MACD divergence here, but it does not bring any info we don't already know. Here is that copper trade I posted 2 months ago: There also was a hammer candle on the daily chart. What looks exactly the same but is not it (oh my there are plenty. Biggest trap ever): Really important to let these continue and not enter too early. How far well that depends, it's not an exact science anyway. Type D: The V shape recovery. Or the idiot's game. Buy the dip! Now I'm sure some people are letting every one know how they make money being lucky - er I mean catching falling knives at the bottom, and there might be very very few that get lucky over long periods - eeer I mean manage to consitently make profit for a certain amount of time. I did try this myself because I wanted to try every thing, I stayed really small. The kind of people that try this 99% of the time have a few things in common. Little experience (newbs), do not understand odds risk to reward, do not understand risk, have no idea how to make money, think you have to be right all the time and "buy cheap" and follow the idiots calling them super legends or some dumb names. They also all always have a completely flawed logic that leaves no doubt as to how smart they are. I estimate the average IQ of people that "buy dips" is around 60. Just going to show a few examples here: Here is how I would trade those: not. Let fools take one for the team and create an A B C. Let them not miss out on all the juicy losers tell you what an idiot you are for missing out, and in 6-12 months go check their profile on tv (or any other similar site) and notice how they have been inactive for the past 3+ months :D If you have insider info or are value investing and have big bags to fill, then this is the best I would say. Just soak up all the tremendous momentum miam miam miam goble goble goble. A personal favorite: I must admit, that Helios & Matheson situation makes me soooo happy. I am so glad they got their faces smashed to the ground. Crushed. I just want to lick their tears à la Cartman. A harsh but important lesson was learned. I really really would love to see the cocky absolute morons - that think they're smarter than every one why is this a recurring theme among idiots? - of Tesla and Bitcoin get DESTROYED. Not just down 90%. Noooooo I want to see them down HMNY% *cruel evil laugh* Ye don't catch falling knives, especially blindly, and use stop losses that make sense.
Education
by MrRenev
2