I think the biggest thing that will help me is having a strategy to diversity my coin holdings along with rules for trading. A set structure will reduce FOMO and help mitigate risk. I want to know what your thoughts are on my plan along with what your personally strategies are. Thus far I have just been observing the markets, researching different coins, and mining higher profit coins.
Start:
- 50% current crypto converted to btc and hold
- 25% current crypto left in high volume alt-coin holdings as speculation
- Target 4-6 alt-coins for medium-term holds
- 25% current crypto used for trading/high risk alt-coin speculation
On weekly basis:
- Convert 50% of newly mined crytpo to btc to hold
- Rebalance alt-coin speculation holdings - Max 33% total holdings
- If speculation fund greater than 33% total holdings, convert excess to btc and transfer to wallet
- If less than 25% of total holdings, transfer up to 25% of newly mined coins to speculation fund
- Rebalance trading fund - Aiming for 25% total crypto holdings for trading.
- If fund value greater than 25% total holdings, convert excess to btc and transfer to wallet
- If fund value less than 25% total holdings, add up to 25% newly mined crypto to trading fund
- Any remaining balance from mining converted to btc to hold
Trading Rules:
- No low volume coins (to help reduce risk of bag holding after pump & dumps)
- Maximum 25% trading fund value available for any individual trade
- Prevent all-ins
- Limit maximum number of concurrent trades
- I will reduce this value as my total crypto holdings increase
- Aim for 5% profit - sell once target met
- Stop loss order - I'm unsure about setting a rule for this but suspect I should - thinking 90% of purchase price. What do you do?
Transfers to FIAT:
- Withdraw proportionally from main btc wallet, speculation fund, trading fund
- Used to fund mining hardware purchases
- Used to fund/partially fund non-standard purchases
Does it seem like I'm on the right track? What would you do differently? Why?