My silly little system | Bitcointalksearch.org

aardvark15

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Quote from: xPPx on September 29, 2017, 06:45:38 AM

I have BTC/ETH/DSH/OMG. I have a strong faith and believe in ALL of them. I came up with a system. Let's say that BTC outperformed all 3 (highest % gained), so I took 10% of my Bitcoin (10BTC) and traded it for ETH (highest % lost). Then waited until ETH outperformed the other 3 and traded ETH for the worst performer of the three. Wash/rinse/repeat.

The VALUE of the coins moved will always be the exact USD value of the initial 10BTC moved. However, the NUMBER of coins I have would increase greatly. Remember, since I believe in all of the coins, I'm more concerned with quantity than USD value. Also, the only thing at risk using this system would be the initial 10BTC moving around.

Am I on to something? Is there a math/trading wiz in here? Was this tactic discovered 20 years ago and already has a name in the world of trading? Thanks in advance!

I agree that you buy more of a coin when the price is low and you sell when one goes high. If you are looking at 4 coins, there's a good chance one or two will be down while these others are up.

As long as all these coins do well in the long run, your system should work. Where it could get tricky is when one of them drops in price and you keep buying it and it doesn't recover. Let's hope you don't have that problem. That is why it is good to stick with the major coins with good trading volume.

xPPx

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Okay. I'm gonna make this easier on myself. I just traded 3BTC for 1268.52OMG @0.00235904. I will only deal with the BTC/OMG pair. I really like OMG, plus it is today's worst performer. I will update after every trade. I'm not looking to get rich. Just trying to create more than 3BTC or 1268OMG in my Bittrex account for free. Happy trading!

crairezx20

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Since you are believing to your coins increasing the amount of your coins was good but its still the same value.. so i think there's no problem since you are holding them for a long time just keep doing it and increase the amount is ok and just hold tightly until the price are keep increasing you can gain more profit because your system is to increase the amount of your altcoin instead of making profit so this method what you do is for long term..
Well for me honestly i don't know those altcoin can be stay for long or it can be increase its value in the future..
For me i still believe what we are commonly use like ethereum and litecoin .. or other altcoin which is already in top rankings..

xPPx

sr. member

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Thank you! I'll do some research on portfolio restructuring. All of my coins are on a Trezor/MEW at the moment, so I don't trade. However, everything will stay on the Trezor/MEW except 10BTC to Bittrex to test this little theory. There's risk, but only 10% of your biggest held coin. Again, thanks for all of the insight!👍🏽

HeRetiK

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Quote from: xPPx on September 29, 2017, 06:45:38 AM

I have BTC/ETH/DSH/OMG. I have a strong faith and believe in ALL of them. I came up with a system. Let's say that BTC outperformed all 3 (highest % gained), so I took 10% of my Bitcoin (10BTC) and traded it for ETH (highest % lost). Then waited until ETH outperformed the other 3 and traded ETH for the worst performer of the three. Wash/rinse/repeat.

The VALUE of the coins moved will always be the exact USD value of the initial 10BTC moved. However, the NUMBER of coins I have would increase greatly. Remember, since I believe in all of the coins, I'm more concerned with quantity than USD value. Also, the only thing at risk using this system would be the initial 10BTC moving around.

Am I on to something? Is there a math/trading wiz in here? Was this tactic discovered 20 years ago and already has a name in the world of trading? Thanks in advance!

I think that's a fairly well known form of portfolio restructuring, although I don't know whether this particular strategy has a name of its own. Also it's the first time I've ever heard of someone applying this to crypto.

The rationale behind this strategy (in the traditional context) is that you spread your risk by keeping your portfolio diversified, as naturally some assets will outperform others and as a result bring your portfolio off-balance. Thus you periodically restructure your portfolio in a way that reflects the original composition, ie. decrease holdings that gained in value and increase holdings that lost in value. Looking at the way you use this strategy, it apparently also helps increase each respective holding

One of the criticisms of this strategy is that you cut the top-performers short in favor of under-performers, i.e. inverse survival-of-the-fittest by gradually exchanging your top investments for assets that don't fare so well. So that's a potential downside.

xPPx

sr. member

Activity: 531

Merit: 250

Essentially cheap coins. A crypto "going-out-of-business" sale! LOL! You're ALWAYS trading the best for worst. But all of your picks are all great coins, so there is no "worst". The worst is actually the "best deal"...

Basically buying the dip without using your USDs...

xPPx

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Activity: 531

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Quote from: MissionPhailed on September 29, 2017, 09:41:35 AM

Quote from: xPPx on September 29, 2017, 07:04:22 AM

Basically, the USD of portfolio would stay the same, but number of coins would increase. Or am I an idiot who is spinning his wheels?

I made a lot from the stock market off of pop culture (NKE/AAPL/DIS) 2015 and got out. Invested in crypto ever since. I dunno most of the trading terminology. Clueless to backtesting software. I just get silly ideas every now and then. I just know most get rid of the crap and trade for the hot performer. I just figured that the contrarian point of view might be more lucrative. Thanks for the speedy response!

But the price of your coins would generally decrease when the value of your portfolio remains unchanged while you increase your coins (?). So a stable price of your coins would already be enough to increase the value of your portfolio if I'm correct.

I'm getting back into trading soon too and this is certainly a strategy to consider for me personally.

Exactly. But I feel that BTC/ETH/DSH/OMG will moon. Using my logic, next year you could have 200BTC, 200ETH, 200DSH, and 200OMG. If you truly believe in a few coins, it's no different than HODLing 100 of each as far ask risk goes. You will just procure MORE coins. I haven't went too deep into testing. This was just a silly thought I had this morning.

Of course you could also end up with different totals for each coin, but the way that a different one outperforms the others every day leads me to believe that they would all almost balance out. Meh... WTF do I know?

MissionPhailed

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Quote from: xPPx on September 29, 2017, 07:04:22 AM

Basically, the USD of portfolio would stay the same, but number of coins would increase. Or am I an idiot who is spinning his wheels?

I made a lot from the stock market off of pop culture (NKE/AAPL/DIS) 2015 and got out. Invested in crypto ever since. I dunno most of the trading terminology. Clueless to backtesting software. I just get silly ideas every now and then. I just know most get rid of the crap and trade for the hot performer. I just figured that the contrarian point of view might be more lucrative. Thanks for the speedy response!

But the price of your coins would generally decrease when the value of your portfolio remains unchanged while you increase your coins (?). So a stable price of your coins would already be enough to increase the value of your portfolio if I'm correct.

I'm getting back into trading soon too and this is certainly a strategy to consider for me personally.

xPPx

sr. member

Activity: 531

Merit: 250

Quote from: jimbo2000 on September 29, 2017, 08:20:41 AM

Quote from: xPPx on September 29, 2017, 06:45:38 AM

I have BTC/ETH/DSH/OMG. I have a strong faith and believe in ALL of them. I came up with a system. Let's say that BTC outperformed all 3 (highest % gained), so I took 10% of my Bitcoin (10BTC) and traded it for ETH (highest % lost). Then waited until ETH outperformed the other 3 and traded ETH for the worst performer of the three. Wash/rinse/repeat.

The VALUE of the coins moved will always be the exact USD value of the initial 10BTC moved. However, the NUMBER of coins I have would increase greatly. Remember, since I believe in all of the coins, I'm more concerned with quantity than USD value. Also, the only thing at risk using this system would be the initial 10BTC moving around.

Am I on to something? Is there a math/trading wiz in here? Was this tactic discovered 20 years ago and already has a name in the world of trading? Thanks in advance!

This is an interesting concept and I have some questions. Over what period would it be that you drew conclusions as to which one had performed the best? Do you realise that in theory you would constantly be buying high and selling low? If you believed in all 4 coins you would be better in my opinion to trade out the best performing coin for the worst performing in the belief that it will perform better in the future.

It doesn't matter when you start. You're using what you've already purchased a long time ago. Just look on BlockFolio or something one day. Check 24hr %. You may see +5, +3, +1, and -2. Trade 10% of your +5% BTC for however many -2% OMG. When OMG goes on a run, trade the EXACT number of OMG that BTC got you for the worst performer in your portfolio.

This isn't buying high and selling low. It's selling high and buying low. Maybe you misunderstood me, but YES I believe in all four and will be trading the best for the worst, just like you said.👍🏽

jimbo2000

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Quote from: xPPx on September 29, 2017, 06:45:38 AM

I have BTC/ETH/DSH/OMG. I have a strong faith and believe in ALL of them. I came up with a system. Let's say that BTC outperformed all 3 (highest % gained), so I took 10% of my Bitcoin (10BTC) and traded it for ETH (highest % lost). Then waited until ETH outperformed the other 3 and traded ETH for the worst performer of the three. Wash/rinse/repeat.

The VALUE of the coins moved will always be the exact USD value of the initial 10BTC moved. However, the NUMBER of coins I have would increase greatly. Remember, since I believe in all of the coins, I'm more concerned with quantity than USD value. Also, the only thing at risk using this system would be the initial 10BTC moving around.

Am I on to something? Is there a math/trading wiz in here? Was this tactic discovered 20 years ago and already has a name in the world of trading? Thanks in advance!

This is an interesting concept and I have some questions. Over what period would it be that you drew conclusions as to which one had performed the best? Do you realise that in theory you would constantly be buying high and selling low? If you believed in all 4 coins you would be better in my opinion to trade out the best performing coin for the worst performing in the belief that it will perform better in the future.

TheQuin

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Don't worry about backtesting software. Just go back through the charts, say 2 years, then work out where your system would have bought and sold and how that would have worked out. That'll be the first indication as to if you're onto something or not.

xPPx

sr. member

Activity: 531

Merit: 250

Basically, the USD of portfolio would stay the same, but number of coins would increase. Or am I an idiot who is spinning his wheels?

I made a lot from the stock market off of pop culture (NKE/AAPL/DIS) 2015 and got out. Invested in crypto ever since. I dunno most of the trading terminology. Clueless to backtesting software. I just get silly ideas every now and then. I just know most get rid of the crap and trade for the hot performer. I just figured that the contrarian point of view might be more lucrative. Thanks for the speedy response!

TheQuin

hero member

Activity: 2576

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Freebitco.in Support https://bit.ly/2I9BVS2

It's not a system I've heard of before so you may be the first. When devising trading systems the first thing to do is backtest them. You have access to all the historical trade price data so go back and see how your system would have performed. If it shows it would have made a profit that is at least a good start but not a guarantee that it will continue to work in the future as market conditions can and do change. Also, one other thing to watch out for is curve fitting. That's when you make amendments to the system so that the backtesting shows it would be profitable but really you're not going to have much chance in the future with a system that is pretty much made to work on one specific set of data.

xPPx

sr. member

Activity: 531

Merit: 250

I have BTC/ETH/DSH/OMG. I have a strong faith and believe in ALL of them. I came up with a system. Let's say that BTC outperformed all 3 (highest % gained), so I took 10% of my Bitcoin (10BTC) and traded it for ETH (highest % lost). Then waited until ETH outperformed the other 3 and traded ETH for the worst performer of the three. Wash/rinse/repeat.

The VALUE of the coins moved will always be the exact USD value of the initial 10BTC moved. However, the NUMBER of coins I have would increase greatly. Remember, since I believe in all of the coins, I'm more concerned with quantity than USD value. Also, the only thing at risk using this system would be the initial 10BTC moving around.

Am I on to something? Is there a math/trading wiz in here? Was this tactic discovered 20 years ago and already has a name in the world of trading? Thanks in advance!

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