Portfolio Rebalancing: A Trading Fee Analysis

crabby

member

Activity: 276

Merit: 48

Quote from: clrpod on January 06, 2019, 08:20:55 AM

The inherent volatility of the market coupled with its unpredictable nature means that re-balancing your portfolio frequently when facing high fees is just going to dwindle away your money. When there's little in the way of a strong indication for which way prices will move you're better just to stand pat and preserve your funds.

Thank you for your response! Based on the research we have been conducting, this is not true. Rebalancing actually often results in accumulating assets which ends up boosting the performance of your portfolio. You can see some of our studies here:

https://hackernoon.com/rebalance-vs-hodl-a-technical-analysis-6f341b0db9cd
https://hackernoon.com/crypto-users-who-diversify-perform-better-new-research-ebf775d348dd
https://blog.goodaudience.com/exchange-liquidity-a-comparative-study-e184ef7162f

Please let me know if you have any questions about the results!

clrpod

full member

Activity: 322

Merit: 114

The inherent volatility of the market coupled with its unpredictable nature means that re-balancing your portfolio frequently when facing high fees is just going to dwindle away your money. When there's little in the way of a strong indication for which way prices will move you're better just to stand pat and preserve your funds.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Quote from: StarofBTC on January 05, 2019, 02:12:11 PM

I just wonder that trading fee is playing major role in deciding our profit levels while trading in crypto exchanges ? Because I never bother about trading fees because most of the time as far as I have noticed that it is just less than 0.5%, it means I assume myself I never need to bother it as a criteria for choosing an exchange for having cheaper fees or it will be having no impact on my trading performances.

Moreover, I am not an active trader who will be trading multiple times in a day and most of the times per week. This might be another reason why so far I am just ignoring trading fee. I just start studying your article and let me ask if I will be getting any questions.

Trading fee will much bother for the day traders who keep buying and selling when the prices dumps and bumps when the fee is 1% then they need to have more profits margin.But as I am not a trader I never cared about trading fee or deposit and withdrawal fee.I just sell when I want to,on any of the exchange where the prices is better.

upsidedown75

legendary

Activity: 1288

Merit: 1036

Quote from: crabby on December 05, 2018, 02:25:16 AM

I just released a study on how trading fees affect the performance of a portfolio which is rebalanced over time. I would be happy to answer any questions or discuss the research!

You also released an app for rebalancing portfolio (based on trading fee ?).
May know what you will be exactly doing in the name of rebalancing the portfolio ?
I mean to ask how you will be helping me in saving trading fees ? Like you will be suggesting the exchanges where I can get cheaper trading fee ? Or anything similar to that ?

In that case I may not be interested in trying your app. Because, I'm not paying any big money as trading fee and I may not opt for saving those some part of trading fees by sacrificing my favorite exchanges.

StarofBTC

hero member

Activity: 1148

Merit: 528

I just wonder that trading fee is playing major role in deciding our profit levels while trading in crypto exchanges ? Because I never bother about trading fees because most of the time as far as I have noticed that it is just less than 0.5%, it means I assume myself I never need to bother it as a criteria for choosing an exchange for having cheaper fees or it will be having no impact on my trading performances.

Moreover, I am not an active trader who will be trading multiple times in a day and most of the times per week. This might be another reason why so far I am just ignoring trading fee. I just start studying your article and let me ask if I will be getting any questions.

Dondont

member

Activity: 446

Merit: 12

BitbondSTO.com | Germany’s First STO

Quote from: Renaldi blackspadeteam on December 29, 2018, 09:33:57 PM

Quote from: mapofgordious on December 13, 2018, 06:21:31 AM

Quote from: Renaldi blackspadeteam on December 11, 2018, 08:01:07 PM

yes. Crypto Trade costs affect portfolio performance, so the accuracy of prices in Fortopolio is sometimes not the same as prices on the market, but there are only a few differences, so I don't think that's a problem,

I think that regardless of the market prices, you can up to some extent minimize the risk of your assets in the portfolio so yes this is a fact that it is not a big problem but there is always a limit to the diversification.

there is a limit to the price diversification in the portfolio, so I always see my crypto asset price from the exchange directly, because if I look at the portfolio, I'm afraid the price isn't the same when on the exchange and makes my trade mess.

why don't you do the opposite, count the portfolio before our assets enter the exchange. calculate total assets in the form of "FIAT" before we use to buy crypto assets. It aims whether we really profit or not. Because crypto prices tend to be unstable. If only we count the total assets in the form of crypto then we trade and we think we get profit, but of course the main coin price goes down, then when we exchange to "FIAT", we realize that the profit is only a bit from whole assets we use for trade

Renaldi blackspadeteam

full member

Activity: 504

Merit: 100

Quote from: mapofgordious on December 13, 2018, 06:21:31 AM

Quote from: Renaldi blackspadeteam on December 11, 2018, 08:01:07 PM

yes. Crypto Trade costs affect portfolio performance, so the accuracy of prices in Fortopolio is sometimes not the same as prices on the market, but there are only a few differences, so I don't think that's a problem,

I think that regardless of the market prices, you can up to some extent minimize the risk of your assets in the portfolio so yes this is a fact that it is not a big problem but there is always a limit to the diversification.

there is a limit to the price diversification in the portfolio, so I always see my crypto asset price from the exchange directly, because if I look at the portfolio, I'm afraid the price isn't the same when on the exchange and makes my trade mess.

mapofgordious

newbie

Activity: 23

Merit: 0

Quote from: Renaldi blackspadeteam on December 11, 2018, 08:01:07 PM

yes. Crypto Trade costs affect portfolio performance, so the accuracy of prices in Fortopolio is sometimes not the same as prices on the market, but there are only a few differences, so I don't think that's a problem,

I think that regardless of the market prices, you can up to some extent minimize the risk of your assets in the portfolio so yes this is a fact that it is not a big problem but there is always a limit to the diversification.

Renaldi blackspadeteam

full member

Activity: 504

Merit: 100

yes. Crypto Trade costs affect portfolio performance, so the accuracy of prices in Fortopolio is sometimes not the same as prices on the market, but there are only a few differences, so I don't think that's a problem,

crabby

member

Activity: 276

Merit: 48

Hi Everyone!

I just released a study on how trading fees affect the performance of a portfolio which is rebalanced over time. I would be happy to answer any questions or discuss the research!

https://blog.shrimpy.io/blog/crypto-portfolio-rebalancing-a-trading-fee-analysis

Thanks,
Shrimpy Team

Topic: Portfolio Rebalancing: A Trading Fee Analysis (Read 237 times)