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Bringing Linear and Exponential Growth to Cryptocurrency. Part I
Have you ever been curious about how math could potentially affect all that comes involving money? Many years ago, the invention of these numbers, formulas and equations have brought us to predict more accurate data or set of number that grows at a given timeline. Like for example, the growth of population has been exponentially computed as n years continously at a given growth rate. And if we checked this from the internet we will be amazed how accurate this formulas and numbers were. Even though it has been created many decades ago.
I am here yet again, diving deeper into cryptocurrency and I just so love Math that I want to share with you how could this affect your trading skills. And how Math could make your hodl growth with planning a less risk trading but of course with an easy Math strategy.
I am not expert on Math nor expert in words. I just love it. If anything I have written here is wrong you can comment down below and we can discuss it.
This will mainly focus on the differences of of linear growth vs exponential growth and how we can apply it to consistent less risk trading.
As you can see with the above figure, linear growth is the growth of x in a consistent amount at a given unit of y. Let us make an example. Disregarding all the fees.
Ana started trading at 0.5 bitcoin cash, every trade she wants to earn 10% of her started amount supposed she was now on her 5th trade how many bitcoin cash she has now if she only use 0.5bitcoin cash every trade.
As you can see using the recursive formula we can see that Ana has made her 0.5 bitcoincash into 0.75 bitcoincash in just 5 successful trade. One thing that I want to imply is that if you really want to save up any cryptocurrency you want you can really dive using these linear growth. However, this requires a lot of patient and studying of graphs. If Ana is in our current situation, where she traded using spot she needs to buy and sell at 10% increase. How will we determine that? For example Ana start trading at worth $500 bch then she needs to sell it 10% higher of her starting price which is 550. Or if she traded at starting 430 just multiply the starting price to 10% and add it to the starting price. Same way when she buy back the bch, at price $500 worth of bch. Pretty amazing right? But of course you need to learn how to analyze these trends in order to successfully execute these patterns.
If you will put this to excel, it will look like this. I know you would ask what if the market took long to reach your asking selling price and buying price, one thing that I would recommend is to study the volatility of the market. You must know where is the support and resistance trend of the the coin you want to invest with. If you have seen that the price of a certain crypto is increasing, you can also take advantage of the situation and increase the percentage of your selling price. And one thing I would add up is that this one requires a lot of patient and studying. If you want to become a day trader, or swing trader, you have to start studying now.
Moreover, one thing I like about math is we can really have the simplest formula, or what we call explicit formula to avoid series of repetitions and to easily manipulate the numbers.
Say, Ana wants to know what will be the value of her bch using 10% increase at 5th trade,
N5= X +( 10%X)*n = 0.5+ (0.5*.1*)5 = 0.75bch
Or if Ana wants to know when she could get double her investment by trading, using 10% increase,
Nn= X + (X10%)×n
We know that she wanted her investment to doubled, so Nn = X*2 =0.5*2 = 1bch
Subtituting these to the formula, we will get,
1bch = 0.5 + 0.05n
n = 0.5/0.05bch = 10 successful trades.
So if you are aspiring 1bch club member you can take advantage of this strategy while waiting for the price to to the moon.
I Will make a new set of article for the exponential growth because this one is already very long and exponential growth topic requires a lot of explanation so I will make it on part II.
Hoping that you did not get bored with everything I have written. And I have delivered it as simple as it is and I did not complicate any thing.
Thank you for those who have invented this formulas and we are lucky we have it easy! Thanks for reading all. See you at the comment section! ☺