Hodling vs Trading in crypto

johnarb said:
You can have an amount for trading, but always hold a core holding position that you can pass on to your heirs
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What's the object of a core position? How big?
Is there no risk control on the core position?
Why hold a position if it's moving against you?
 
deaddog said:
What's the object of a core position? How big?
Is there no risk control on the core position?
Why hold a position if it's moving against you?
More...

1. Objective - to hold it as a savings account to store your wealth and purchasing power. It's the opposite of storing value in fiat that is designed to be debased at a rate of 2% (target inflation) per year which obviously is much higher, currently

2. How big? Imho, if your net worth is less than $100M , a 50% allocation is proper and re-balance if it gets too high. If you never plan to re-balance, then start with 25% allocation

If your net worth is higher than $100M, then allocate to bitcoin the amount you are not willing to lose

3. No risk control

Bitcoin is a savings account, once you accept it, the price volatility in the short term should not really matter to you

Fiat thinking vs Bitcoin thinking

Convert to latter, never go back to the former

 
deaddog said:
OK my question is if you are actively trading why would you hold during a downturn?
When the trend turns why not exit and buy back lower?
Why hold a position if you were not willing to buy at that price?
The worst thing that can happen is the price starts to rise right after you sell. The best thing is the price continues to drop and you are able to buy back much cheaper.
What fear are you facing by going flat?

Holding as long as possible is sort of a vague answer. What would make it impossible to hold.?
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It is very hard to predict what is the peak of a coin. What goes up crazily can go even higher.
How about phrase it this way. If you bought bitcoin at $1, do you think you would need to sell all your positions now? $70k could be the peak but it could very well go even higher.

Even in the 2017 mania, if went from $200 to $2k and you may think that's it and sell all, but no it went higher to $20k and it then crashes, but it never went to $2k ever again. If I bought it at $1 or $10, I might not even bother about selling it ever again unless I want to move in to other coins with more profit potential.

If you sell something that is heavily trending, you are just capping your profit potential for consistency.
 
HolyGrailSeeker said:
If you sell something that is heavily trending, you are just capping your profit potential for consistency.
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I did some analysis of parabolic moves a few years ago, and it was better to use a very wide trailing stop (eg. 30%, 50%) than take profits on the way up.

If you can stomach the roller coaster ride, it's probably better to HODL.
 
Ed48 said:
I did some analysis of parabolic moves a few years ago, and it was better to use a very wide trailing stop (eg. 30%, 50%) than take profits on the way up.

If you can stomach the roller coaster ride, it's probably better to HODL.
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Yes true, you need a wider stop as prices get more volatile. I would say trading is part art and part science,
there isn't a definite textbook answer. If you feel the amount is too large making you sweat, you can always sell some.

The famous trend follower Ed Seykota once said "I set protective stops at the same time I enter a trade. I normally move these stops in to lock in a profit as the trend continues. Sometimes, I take profits when a market gets wild. This usually doesn’t get me out any better than waiting for my stops to close in, but it does cut down on the volatility of the portfolio, which helps calm my nerves. Losing a position is aggravating, whereas losing your nerve is devastating."
 
what if...?
 

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HolyGrailSeeker said:
It is very hard to predict what is the peak of a coin. What goes up crazily can go even higher.
How about phrase it this way. If you bought bitcoin at $1, do you think you would need to sell all your positions now? $70k could be the peak but it could very well go even higher.
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I'm not disagreeing that it could go higher. If right now you have 70K at what point do you sell if it starts to drop?

I can understand the FOMO. But I have trouble grasping the reason one would hold on to an asset that is falling in value or that one feels is overpriced.

Why would you hold an asset you wouldn't buy at todays price. I'm not suggesting you sell everything just because it's at an all time high. You're right it could go higher. I'm just suggesting you have a plan in place to protect your unrealized profits.

If you were to buy today, would you have a stop in place?
 
The trouble with cryptos, even the biggest one BTC, is that they are so darn volatile, where do you set a stop?
 
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