Topic: Buy the DIP, and HODL! - page 611. (Read 131087 times)

This post was made years before I started buying Bitcoin, but to post something like this before 2017, he must be a crazy sonofabitch. I say that with respect and endearment.

Hal Finny,



"What dip"?

Sure, that is a fair interpretation, and you likely realize that I don't agree with that way of thinking or that approach to investing - even though of course, there are a decent number of people who think and invest like that. 

Even though I tend to advocate for some variation of my approach, I don't necessarily expect people are going to agree, and surely in the end, as long as they are accounting for a the various factors of their own circumstances, then hopefully they will learn along the way and tweak along the way, if they believe that they need to adjust their approach.


Sure.  You and I have been back and forth about this quite a bit, and I frequently proclaim that it is difficult as fuck for even expert studiers of the space and BTC price dynamics to recognize these kinds of factors, so the vast majority of folks are likely not really going to know if they are buying into selling momentum, big dips or small dips or whatever is going on.. even if they might develop hunches around such dynamics.

A vast majority of time, it seems better to establish some kind of system that allows for both buying regularly and maybe structuring various dip points that are largely comfortable and can be tweaked from time to time based on the variety of personal circumstances.



I am not saying that, either.. .but with bitcoin, you should also NOT be getting too worked up about having had bought BTC all the way from $19,666 to $11k and some of your purchased BTC happen to be in the red... In the end, who fucking cares?  You cannot necessarily know.. and after a decent amount of time investing in BTC on a regular basis, it still remains quite likely that you should be in profits with the longer passage of time... and likely in a better position than if fucking around with trying to time matters and just getting stressed out about it. 

So, ultimately a combination of both could be helpful if the person has enough cashflow.  So yeah, having $100 per week (as I mentioned in my earlier post) that is able to be invested into BTC is a decently sized cashflow that could allow for some flexibility in using some amounts to buy regularly (such as half) and the other amounts to attempt to be strategic about those buy price points.

Some people might not have $100 per week, and they might have only $10 per week.  They could still attempt to do the same thing by dividing half and half, but they may have to figure out some other method of maybe buying once a month rather than once a week.. and surely the smaller amounts allow for lower amounts of value to work with in regards to being able to lump sum invest parts of their cashflow, too.

Of course, if someone has higher amounts of cash, even $250 per week or higher amounts, then they are going to have more options, and frequently those higher cashflow folks may have better ideas about how to manage their investment, than someone who may be struggling a bit more with lower cashflows and likely getting more enticed into taking gambling approaches rather than exercising more prudent investment and portfolio management strategies that I tend to argue that dollar cost averaging tends to better facilitate more prudence rather than by trying to time the market through gambling techniques that may or may not be prudent depending on how much of a cashflow that is available to such hypothetical investor(s).


We can agree to disagree, no?  I think that in regards to bitcoin (our lil buddy) the efficiency can work itself out with a long enough investment strategy that largely just mostly engages in DCA strategies that attempt to accumulate and focus on accumulating BTC on a regular and ongoing basis.. and sure short-term it might not seem that such system has been being very efficient, but if someone ends up engaging in a longer term investment approach to BTC such as 7 years or longer, the numbers will likely start to work themselves out in favorable ways - even though with any investment, including BTC, there are no guarantees.. so in that regard, prudence in the amount may help to alleviate feelings of anxiety in regards to whether the investment in BTC is performing well or not in the shorter term.

Again, see the linked website regarding DCA into BTC over the past  7 years with a $10 per week approach that compares gold and equities.  You can adjust the timeframes and/or amounts to see how historical BTC price performance would have varied in comparison to gold and equities.


If someone has a $10k investment portfolio with $1k invested into BTC and $9k invested in various other assets, then maybe they do not need to worry very much because they have a meaningful stake in BTC.. whether it is enough to make a difference or not might be another story.. But, sure, they are already in and if they just let the market ride itself out then if they continue to buy $10 per week or whatever, may not really make a BIG difference.

If someone has zero invested BTC, then they decide to wait, that is on them.   I do not suggest waiting.  I suggest getting the fuck into bitcoin with some reasonable amount that is comfortable for the person that is 1% to 10% of their investment portfolio and then sure they can tweak according to their circumstances.  Invest for 4 years or longer, and if your time line is shorter than 4 years, then you might need to reconsider whether to invest in BTC at all or merely to adjust some of the numbers to fit your shorter time horizon which involves more gambling tendencies - and I am not in the business of recommending gambling approaches to BTC investing... but hey, that is just me.. attempting to presume a 4 year or longer investment timeline and to work from there.. and if people cannot do that, then maybe they should not be listening to what I have to say... or they can attempt to tweak what I say to their personal circumstances... adjusting various parts to attempt to make it work for their personal circumstances and that surely involved figuring out cashflow, other investments, view of bitcoin compared with other investments, risk tolerance, timeline, and time, skills and abilities to plan, learn along the way, tweak their strategies including reallocating and deciding whether or not to include trading within their portfolio management and investment approach... 

What he is saying, in my opinion, has less to do with waiting for lower prices and more to do with waiting for ideal momentum. It's not that "the dip might go deeper so you should always wait to buy lower." It's more that it's prudent to buy into weak selling momentum (indicating accumulation and expected bullish reversal) rather than simply buying at random, or buying early into a crash where you can reasonably expect lower prices in the short term.

I don't think DCA implies you shouldn't put any thought whatsoever into entries. I think both investors and traders (and everyone in between) should make some effort to avoid drawdowns. Drawdowns, especially ones that are deep and long term, can lead to bad emotional decisions and capitulation. It's also just not a very efficient use of a capital.

If you see another bubble and pop like December 2017, does it make sense to immediately buy into the market? Of course not. Your money is better off elsewhere, likely for a couple years. That doesn't mean a 5-year investment timeline won't work out just fine in terms of achieving positive ROI. But it may not be the best plan either.

Anyone getting in BTC would likely be well served by treating it as at least a 4 year investment, and even better if they have a longer investment time horizon, such as 10 to 20 years.

One of the best ways to make any investment is to employ dollar cost averaging techniques, and even if a person might be front loading the investment because they want to get at a certain target investment portfolio, such as having bitcoin serve as 1% of the value of the portfolio 10% or some other target accumulation amount.

So whoever is investing and attempting to reach target positions is mostly aiming at accumulating over a period of time, and of course, if they can buy some of their BTC at a lower price 10%, 20% or 50% lower, then they can accumulate more BTC, but with BTC we cannot be assured that any such dips are going to take place from whatever price point we happen to be at.

So, buying on dips can account for accumulating a bit more BTC over time, but sometimes, it is better just to make sure to get in and stop trying to worry whether you got 1 BTC for your $11k or you were able to get 1.3BTC because the price dropped 30%.

Another thing is that a person might come to BTC and they may or may not have any lump sums that they can necessarily sit on.

Therefore, if you know that you are earning a certain amount of money, but maybe you only have $100 per week extra that you might be able to spend on BTC.  You may decide to invest $50 every week on BTC no matter what, and then let the other $50 accumulate until you are comfortable buying on dips. 

After 6 months, maybe you have an extra $1,300 that has accumulated because you are waiting for dips that have not happened, and maybe you have to consider whether your reserves of cash are growing too big, or whether you are willing to continue to allow that fiat to accumulate and not to be invested in BTC at the current prices (or otherwise tweak you buying price points - quanties of buys or incremental buy spreads). 

There are ways to strategize and to plan out these kinds of BTC price points and amounts in ways that are comfortable for you and your particular situation and just to allocate that value to just buy at certain price points that you have decided in advance, if the BTC price were to reach those various dip price points.  Each of us have to establish those price points for ourselves, and my personal philosophy is to structure my reserve fiat so that I am able to keep buying if the BTC price keeps going down (so that I do not tend to run out of money, and if I do run out of money then I just HODL.. or wait for more cashflow to come in), so I have to project and budget how many dollars that I have to buy at various price points, and if more cash comes in, then I will divide that new cash up into portions that I buy some BTC right away and other portions that I plug into my reserves that are used to buy more BTC at various price points that I have already pre-established, and since I have come across new cash, I can either increase the amounts of BTC that I buy at each price point, or I can choose to dedicate some of that new money towards buying lower, in case that the BTC price goes to those lower prices.   

When I set my low buy points, I also have to feel comfortable enough that the BTC price may NOT necessarily go down to those price points and I need to feel comfortable with not necessarily filling those orders... and part of the way of feeling comfortable is to feel comfortable with the amount of BTC that I have been regularly accumulating and the longer that I have been accumulating the more comfortable I become with the whole BTC accumulation matter, presuming that with the longer passage of time, my BTC has increasingly built up and hopefully moved into decent amounts of overall profits (and likely the longer in, the more likely that the profits are greater - not guaranteed, of course, but has historically been the case).

Funny how many times that various posters such as Windfury and I repeat that this thread is not about buying shitcoins and it is not about attempting to time the market.

When in doubt buy bitcoin, whether it dips or NOT and of course, it is better to attempt to buy on dips, but just buying BTC on a regular basis remains better than waiting attempting to time the market and not buying enough BTC in order to feel comfortably prepared for UP.

We do all have that the same target or goal on to know on when to exit and when to get it but meaning of on determining the precise time? No one can tell and thats why its always a challenge
 for us to deal with this market due to its behavior when it comes to volatility or moving prices but somehow due to experience and knowledge we do able to create various strategies and ways
on how to deal with it.Even though it wont be precise but somehow it is much better option rather than doing blind entries or exits at all. Buy every dip isnt really suggested for alts.
I would rather consider this move in Btc and top ranking alts rather than going into the below ground.

I discovered that you need to really study a coin daily as in constantly be watching its price so you get the opportunity and determine the right time to get in and exit point. In this game, I mean buy-sell you always have an exit strategy. One day you could be up but the next following day you may hit bottom. In crypto arena trend is the key!

at this time it is very difficult to predict correctly, because it has been several months that the increase and decrease occurred very quickly and in a matter of days. so it is the right short-term investment to make and accelerate properly, when it goes down quickly buys and when it goes up sells it right away.
but the end of the year is approaching, usually it will recover steadily and will move for a long time so that long-term investment is very precise, because the predicted increase will occur in the next year.

I continue to wait for the moment when market correct a bit as this gives us an opportunity to keep buying more for less price rather than other way round which people are doing and this helps me to see some of them quickly when it rises to book short term if I require money or else it is an good long term investment for me.

Shitcoins are scams, comparable to the Tulip Mania, not Bitcoin. Bitcoin will be a decentralized protocol that will be online for multiple generations. The design-decisions made by the Core developers will make it so.

Few understand this. The community has been tricked that speed/1,000,000 transactions per second is the path to success for a decentralized protocol, but trolls will never educate you of the costs.

This thread is not referring to "crypto" generally, so it would be erroneous to presume that buying dips applies to any shitcoins because you need to be able to have confidence that the various shitcoins are going to go up at some point, and the mere fact that they went down does not mean that they are going to go up, even if bitcoin goes up.

In other words, buying on dips only applies to bitcoin.. fuck that other shit.. and fuck the mindset of believing than shitcoins (altcoins as you refer to them) have any kind of parallel to bitcoin, even if they are wanting to suck off the tit of bitcoin for as long as they can.

Exactly what I've been experienced since 2017. Imagine how many people are as yet holding from 2017, the majority of the alt coins from 2017 either don't exist any longer or they are down 90% or 99% so because they have a bad strategy. Everything will go up again things just apply to altcoins with use case.

We have to get familiar with the market so we realize that when to purchase and sell. Overall, Its called market cycles and corrections after a push.

Some of the people who are reading the topic are posting that they don't know which dips to buy. This is NOT investment advice, I'm only an ordinary pleb, BUT

"Good profit" is not/should not be your true goal. The true goal of HODL, in my opinion, is to have a fall back, a back up when the Fed/Central Banks/the State lose control of the monetary system.

Short term profits might matter to you, but I believe that there are a decent number of other people who think about these matters a bit differently, including thinking about bitcoin as a long term investment.

So back in 2015, maybe you bought BTC at $250, but the price kept going up, and you kept selling at various points on the way up, so if you sell too much too soon, then you may have run out of BTC to sell by the time BTC prices reached $3k in August 2017. 

So then you say to yourself that it is o.k. the price will come back down, and so far, the BTC price has not come back down to below $3k.. Yeah, sure you made a lot of profits, and you even made 10x on some of the profits that you had sold closer to $3k, but you still missed out on a lot of additional profits, too.



My personal approach to BTC is to attempt to plan to never run out of BTC to sell and never run out of fiat to buy, so therefore you have to plan accordingly, even when the BTC price has tendencies to have very extreme runs in either price direction. 

Sure, no one can be perfect, but surely there are ways to attempt to plan to be prepared for even the most extreme of extremes.



No matter how much money you have, you should be attempting to buy BTC within your budget and hopefully not risking any money that you cannot afford to lose or that you might need for short term expenses, even emergencies.   So, if you do not have your cashflow in order, then probably you should not be investing in bitcoin.

Of course, any of these kinds of investing matters are going to be easier for people who have built a larger investment portfolio, and frequently it takes time to build a decently large investment portfolio.. but no matter if your investment portfolio is large or small, there tend to be a lot of similar principles - especially if you are attempt to treat bitcoin as a long term investment rather than gambling.

Furthermore, if you have BTC accumulation targets, you likely need to focus more on just regular buying and buying on dips rather than selling any BTC at all... because it may well be very risky to sell any BTC when you have still not met your accumulation targets.

Accumulation targets are something that each person sets for themselves and it is going to vary.   



I doubt that the questions that you proclaim to be on everybody's mind is actually the case, because people vary in terms of how they strategize their investment, and whether they sell any BTC at all, especially if they are accumulating, like I said.

So, sure if your BTC holdings are considerably profitable, then maybe you can shave off some small profits along the way, but shaving off profits along the way can become very problematic, like in the situation that I described above and you end up selling way too many BTC too soon and then you don't get any opportunities to buy them back for lower than you had sold them.. plus you miss out on the opportunity to sell much higher, including selling more than 6x higher than the highest price that you had sold.

So, personally, I would frame the whole matter much differently from the way that you are framing it, Oilacris - because you seem to be much more inclined to engage in risky kinds of behaviors of selling too much of your BTC.. because you are trying to time the top of a wave which is a kind of gambling.


Exactly..

This is what happens to people who are too busy engaging in trying to time the market, rather than really getting their shit together in terms of establishing their BTC accumulation goals and meeting that first... DCA and buy on dips.. and sure maybe play around with a bit of it, but try NOT to run out of money..

Once you meet your BTC accumulation goals (which surely can take a while), then you may well have a bit more freedom.. especially if whatever BTC that you have accumulated is in profits, too.

At the same time, until you are really solid with your BTC accumulation level, you still should not be playing around with trying to time the market, but instead attempt to establish modest plans and practices that prepare you for no matter what direction the BTC price goes and allowing the price to come to you... and including when in doubt buying on dips... (which is the title of this thread.. buying on dips).   

If this is the case I am holding, like what I am doing for a long time now.

If I have no choice to do things I wanted with it, I will just keep on holding. For sure time will come that either buying or selling is the choice so I just need to wait for that time. We really need to take advantage of the opportunities we have.

this is exactly why we keep seeing so many panic moves (a panic sell where price suddenly drops down, or a panic buy where price suddenly jumps up). there are always a decent number of traders who think they can make profit with the trend that has gone up for a certain time in the future too, but then that trend changes and they get confused not knowing what to do next so they panic and increase the volatility instead while losing all the profit they had made to that point.

When you ran out of btc to sell, then what else you can do? as long you do already have sold and in profits then that what matter most for everybody.

What if its going down but you do have ran out of fiat to buy more? Then so be it, everyone does have different level when it comes to financial capacity.Lucky for those who have more but to think
that buying  even more does increase the risk even more.So its still a good call for someone who do buy on minimal but of course when in talks to profit then it would really be always equalled on the
money you had risk.

The real challenge here is on how to determine the right time for you to sell and when to buy.This had been always a question on everybody mind.

What if it keeps going up but does not come back down and you run out of BTC to sell?

What if it keeps going down and you run out of fiat to buy more BTC?

yes, profits can now be made every day because the movement of bitcoin every day can go up and down quickly, if you listen confidently buy when it goes down and sell it after going up. because the difference is quite good and very profitable if it happens several times.