Exploring Increase & Strategies That Make It Possible In Any Market
Increasing The Stack
Applying a slightly modified trading strategy over the past two weeks or so has proven to be a lot more enjoyable and profitable than I had originally hoped. Essentially, it’s an amalgamation of some of my key strategies and works to increase coin holdings, as opposed to a dollar valuation. Inevitably, this tends to rise as well, making it a rather attractive strategy. I have not sat down and looked at specifics, in terms of my performance. However, at a glance, I have been able to increase my allocated holdings by approximately 25% in a week.
If I can continue at this rate, I will be doubling my holdings in under a month. This becomes achievable thanks to the compounding dynamic at play. Initially, I was able to average a 5% compounded daily return. However, I found that with the drop in volatility and volume over the weekends, my average was dropping. Essentially this means that the amount of coins I am trading with grows by 5% per day. I then earn 5% of the new increased total… and this continues every day until I remove the newly earned coins from the stack.
Depending on how I can fair over an entire month, I might be able to grow the stack by 200%, or even 300%. However, this means maintaining a daily compounded return of 5%, or more. I am looking at moving to lower time frames over the weekends to see if I can boost my productivity that way. I am still exploring this option. With this strategy performing a lot better than expected, I am looking to make this a continuous stream of income, and perhaps even a main source of income. However, it’s still early days.
If I am holding 1000 coins and they are doing nothing, what’s to stop me from making another 1000 coins and selling those as profit, while holding onto my initial stack? Essentially, it’s maximizing a hodl position. The strategy is very low-risk and operates on a multi-position dynamic that factors in numerous relativity ratios, as well as the law of averages. It’s still too early to break out the champagne. Firstly, I need to see months of consistency and profitability, and secondly, I will need to increase my working capital.
The Core
Essentially, the core strategy was conceived during the bear market of 2018. I have found ways to further enhance it by applying a few additional dynamics… including a more profound understanding, which has developed over the years. Many think that they can begin trading immediately, or perhaps, after a few months. However, you need to travel entire cycles and spend countless hours in the trenches before tasting any level of success. This usually deters the majority of potential traders, and so the 90% failure rate that exists within retail is predominately made up of such cases.
I executed my first trade more than 15 years ago. Financial markets and Crypto have been a part of my life for ages, and still, I am continuously learning. The more I learn, the more I realize how much I am still to learn. Continuous growth makes me more effective, and so I refute the idea of ever arriving. I want to learn something new as often as I can because I know it will make my next trade that much more powerful. When I look back over the past 15 to 20 years, I see a journey and the benefits of that journey.
The very thing new traders should embrace, they reject. You always have to pay a price… there’s no such thing as easy money. It may look easy when executed, but what led to that point of execution? What’s the story behind the moment? Many are unable to stomach the journey. However, I have come to appreciate the journey because I know it is packed with lessons and nuggets of wisdom that I both need and desire. Despite this strategy performing a lot better than I initially anticipated, I am still looking to fine-tune it. Never become complacent as a trader. It’s usually the first sign of defeat… even if it is yet to be realized.
Final Thoughts
Growing one’s holdings is an excellent approach during a bear market or even a ranging market that is not doing too much in terms of price action. This was an approach I used to some extent during 2022. While everyone was buying the dip that kept dipping, I was selling the pumps and buying back lower. My previous article addressed the futility of dollar-cost averaging in a collapsing market. Most don’t realize this because they have never done the math.
Many will perhaps argue this point, but I guess that next time around a fly on the wall catches them dollar-cost averaging into cash and stablecoins, only to buy into the market much lower down. Buying Bitcoin at staggered levels such as $45K, $40K, $38K, $33K and so on can never outmatch buying at $20K, never mind $15K. This is entry-level math, and yet it evades the majority of investors. If you want to grow, develop a thick skin, question yourself, and look to find fault with your strategies to avoid the market doing it for you.
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
