Topic: Investing is a question of guts (Read 169 times)

no.
this is my system ill even use your prices
my rule and logic is if it dips by 10% put an order in.
then put it for a sell at just a couple percent for high spread and more for low spread. repeat repeat repeat
the higher the spread the less you want to risk in time and money

1000/\/\
  950     \     /\/\
  900      \/\/     \
  850                  \     /\/\
  800                   \/\/     \_/\
  750                                   |
  700                                   |
  650                                   |
  600                                   |
  550                                   |
  500                                   |
  450                                    \
  400                                      \/\
  350                                          |
  300                                           \/\
  250                             _______----         /\ = price
  200________-----------                          _-- = cost
            1    2    3    4    5    6    7    8
in month 1
i would see that the cost was 200 and price was 1000. and so there is a 5x spread..i would not buy

month 2
i would see the price dropped by 10%. but the spread is still 4.5x so i would only risk 10% of my fiat
and will try to get out at 2%
so if i had a fiat hoard of $100k . id put in $10k at 900
so now i have $90k and 11.11111111 coin

month 3
im willing to sell at ~920 and yep it gets there. so i sell for $10,222. total fiat hoard $100,222

month 4
its dipped to 800 and cost is 225 which is 3.5x spread. i decide ill take 20% hoard risk
so i buy in at $800 with $20044 and have 25.055coin
i set a sell for 2% so lets call it $820

month 5
it hits $820 and i take out $20545, total fiat hoard $100723

month 6
it didnt drop by 10%

month 7
it drops to 400. and with cost at 250 thats only 1.6x. so i risk 40% of fiat hoard
so i buy in at $400 using $40289 and get 100.723 coin

month 8
it drops again. I DO NOT SELL ANY COIN
the price is now $300 and the cost is $250 which is only 1.2x. so thats pretty much bottom. and yep. im gonna risk all remaining fiat.
i put in my remaining $60434 at 300 and get 201.46666666 coin

..
ok at this point i have not lost anything. as i never dare sell at a loss
instead i see it as having 302.16999999 coin for $100k initial investment
i see it as 3x better than only buying 100 coin if i went al in in month 1
i see it as me having an overal coin average of $331/coin. meaning anything over $340 i call profit
and yes doing the small risks for 2% allowed me to buy a couple extra coins for free

remember
you can never lose if you never sell at a loss
by knowing the price has gone up. it can go up again. so you just ned to wait.
by knowing its at nearly the cost.. its not really gonna go down..
so no risk
well if you want to call a risk of going down by 0.2x and a chance of going back to 5x
i think my strategy has worked for me.


..
things to note.
if you break your fiat up into 10% and you only risk that 10% per 10% dip. you are still going to have cash even at the bottom to play with.

if you only take profit at 2% for high risk, 5% midrisk and 10% lowrisk and 30% at 'the bottom'. and if you can repeat that. it soon add up.
in short dont be willing to wait long at high risk. get in and out.

if you only take small profits you can easily repeat the effort without locking your money up for months waiting for a big rise
EG i wont wait a year for it to get back to 1000. id probably now i have a good value coin hoard. wait for 10-30%
and then repeat them efforts

You are not getting it. It is not gamble by guts or gut feeling. The point is that no matter how confident or "logical" your are (this does not apply only to bitcoin), at the end you are jumping on a pool of unknown depth. If you do not think so, you have not thought this over enough.

Regarding your system, is full of pitfalls - I would not find time to list. Ok, let´s follow your "system" on a long trend bear market, but not permabear necessarely.

t=1 month   spread 100                               bitcoin price 1000
t=2 month   spread 70 (1st time)                   bitcoin price 900
t=3 month   spread 100                                bitcoin price 950
t= 4 month  spread 70                                  bitcoin price 800
t= 5 month  spread 100                                 bitcoin price 850
t= 6 month  spread 70 (you buy)                   bitcoin price 800
t=7  month  spread 100                                bitcoin price 400   ----- you have lost 4/8
t=8 month  spread 100                                 bitcoin price 300 --- you are down 5/8

t= future (if you know then you have a cristal ball).

etc. So, you can do well with your system as long as the price is rising long term. I see merit on you buying strategy as at least will take the "timing" out of your "gut decission", it is just not purely logic and infalible IMO.

There are quite a few other pitfalls on the "strategy", the problem is that you get a good result due to a secular bull market for BTC, so you think you have a robust system. You don´t.

You also think you have considered the risk because is just a portion of your savings. You have only considered one risk (concentration of investments).

The good thing is that it is making you believe that you are using logic, so no "bravery" involved, etc... to go ahead with it and thus, you think it is not required.

TBH that is something that bitcoin has done for many people who just do not overthink stuff... kind of like having kids or buying a house: if you are too stupid you can´t and if you are too smart (plus lacking balls) there is never a perfect moment.

Good Hodling, I have spent too much time on this tread am I am certain that no system of trading works forever... except perhaps those by Renaissance Technologies.

nah
cant use this tactic on a permabull market.
it works to buy on the dip when the price-value spread goes under 30%
emphasis third time: under 30%

meaning it has to go bear to get to under 30%

buy low sell high is a tactic of repeated trading on a volatile market
thats logic

your 'gamble by guts' only works on a permabull because whatever gutsy number you buy at. you hope it will only go up

buy low sell high is the hope of ups and downs. and then using math and logic to buy at the right dips and sell at the right peaks. repeat. repeat.repeat

Only works on a permabull market.

nah. its just doing your job. the 'investment' is automated as its part of your employment contract you have.
..
as for other investments/gambles.. once you can calculate your risk. and use logic to calculate your risk exposure/value you willing to put in.
then its not guts.
..
i just made another post where you can calculate your bitcoin buying risk by knowing how much the price is inflated by speculation vs the underlying bitcoin value/cost. then its just logic of knowing 'buy low sell high' and avoid taking gutsy risk of 'buying high hope for higher'
patients, logic and thought can help more then 'gutsy gambles'
https://bitcointalksearch.org/topic/m.56403118

if you can teach yourself to only buy when the value-price spread is under 30% its no longer a gut feeling needed to decide when to do trades

Once you have done that for a few years, the sum starts to become something significant and it requieres a cold head to keep up investing.

 To have guts means to be brave, determined and courageous. As nice as this attributes sound, these are not the only attributes one needs to become a successful investor. Proper investment require a huge truck load of patience as well. In fact, patience is the most important factor in investing before guts.

guts is about bravery. courage. and leaping in situations many find dangerous
its not about minimal risk. guts and balls are about high risk.

if you can rationalise your decision via numbers and research. limit your risk by not having to sell your home if you lose and instead just not be able to buy a romantic meal for your wife for a month. then. its not longer guts/balls its just logic

if your investing where you need to be brave and there is a fear factor attached in making the decisions and also worrying about the loss.. then dont invest.

re-evaluate your risk to be something you can be comfortable with

EG
investing in your retirement by putting 6.5% of your income into a retirement investment is not something that need guts or bravery.

It is easy to be fooled by a good result - these are not always the result of sensible decisions.

You can make as many numbers as you want, evaluate the risk and think you are making a "rational decision", on the end you are accepting a number of risks that you know and a number of risk that you do not even know exist (have a look at the Black Swan Theory if you haven´t yet). You can even fool yourself thinking that your "spreadsheet" is accurate, rational and you have considered everything, but be sure you haven´t. And I won´t event get into the impossibility of measuring everything (not even approximately) and the irrationality of markets. Again, there is abundant literature on these two.

If you do know what you are doing, you will know that there is always a component of bet in investment. If you have worked hard for your seed money, risking it does take balls and even if you have "calculated" your odds as favourable at the end you listen to your intuition.

This is far from saying that is only a question of balls and guts are your best guide. First the excel, the the guts, then the balls. Intuition works best when you feed data to your brain.

As an anecdote, there was this guy, I do not remember his name sorry, he elaborated a widely know and accepted portfolio theory that allowed to reduce to the minimum the systemic risk of a portfolio. When asked about what portfolio did he effectively have for his own investment he answered "Oh... just US T-bonds". >Great calculations, lack of balls.

thinking that investing is just putting money in.. its not
because you can just put money into gambling

thinking investment needs guts to make a decision.. its not
a gut decision is a decision without logic/precaution.

when i got a hoard in 2012 it was not guts. it was planning. it was observing. it was maths. it was calculated. it was seeing the pattern and using numbers.
a gut decision is more about a guess and willing to accept loss.

a gut decision is "oh well if i lose i lose. its my choice ill live with the consequence"
a logic decision is evaluating the risk and calculating a lower % of value to risk based on it.
its also evaluating the chance of a 0.1x increase or a 10x increase. and assessing how much value to put in based on how much gain you can get out based on the time

EG if a bank usually offers (premillenium) 5% savings account interest. if inflation is 4%. then anything above 10% a year is considered a good investment.
so if you can make 0.1x(10%) a year based on monthly 0.01%. then great.

but having a gut decision HOPING for 10x(1000%) within 3 years. not a good 'bet'
having a one time punt/gamble. and willing to lose it.. not a good 'gamble'

there is a massive difference between not knowing the future. vs not knowing the risks vs not evaluating a plan of action

gut feeling means not using your head, meaning you didnt think

That is simply not possible, there is abundant literature on it. But I understand that you have tried to be logic, yet you could not forecast the future, so, in the end, you do make a gut decision.


Not that simple. Just read about the people who invested in railways. I understand that being what is called a "contrarian" can provide many benefits, but is super-risky because the crowd is often right. Thus, balls required.


There is thin line between investment and gambling, but it is not related to the amount of money. You can invest 1% of your net worth or 90% and same for gambling. Apart from XXX rated assessments, investing does imply risk and many times volatility, so balls are required. Even for professional managers, they risk their careers when taking risk.


He took too more risk that he could handle. Too brave.

When it comes to financial decisions, one must be careful and tactical about it. Investment is a long term practice and before one can invest, one must be ready to exercise some patience.

Hey, I'm sorry for that

Just remember the golden rule in crypto (and investments in general): don't invest what you can't afford to lose.

As op said, and apart from sad events like the one of MtGox, not everybody has the strong hands needed to hodl. Daytrading seems difficult but if you have to go through a bear market, not selling is more difficult if you need the money for other purpose.

Im sorry but there’s a point where "investments" become "gambling".

If you’re using words like “hold” and “balls” and you’re not auditioning for an upcoming pornhub movie, you’re most likely risking too much.  Investments are something that should produce a return with a reduced risk or be placed into something you’ve confidence in. Don’t get me wrong there’s a number of ways you can reduce the risks, just none of them involve having nerves of steel and are more educated plays.

On a side note I use to talk to a guy I met on here back in 2011, he had the same mindset as you “hold “don’t back down, after mtgox crashed he went silent for a few months... Then his mother called me asking me if I wanted to attend his funeral. 

Just go against everyone if you want to be successful, there is no such thing exists like everyone can make profits so it is just about thinking contrarily on the futuristic things.

The best hodlers are those that didn't invest all or a greater part of their life's capital. Investment is a game, and the real winner is the one that sees the investment through and makes a complete accomplishing profit at the end.

for me (a hoarder since 2012) it was not guts or balls. it was a logical mindset putting emotion aside.

i took all emotion/'gut feeling' out of my decisions

for instance i look at mining(base) cost to base the bottom level true value of a coin. and if the speculative(spec) price is low and near the base value. its a good time to buy. if the speculative(spec) price is high good time to sell.

december had a $17k base value and a $20k spec meaning low spec=good value (buy)
this week has a $21k base value but a $45k spec meaning high spec=bad value(sell)

i never think 'i should sell when im at the price of a dream home.'
i think. ill sell 1-10% and hope to buy in with more coin after the correction
i think. ok the value:spec are at good value. ill buy.

i didnt choose to only play with 1-10% from guts/balls/emotion. i based it on logic

try to take emotion/feelings out of investment decisions

You don´t have to be smart to hodl when everybody looses their head, just need to have some balls. It is probably the single most important thing to make money by investing, apart for having a general mistrust about everything and everyone.