I scalped my way to a comfortably high entry short again.
Come 6k, make me some money. Come 16k, the insurance fee is already written off as a loss.
I will keep nursing it higher (and possibly still a bit smaller).
My play money grew approximately 20% in the process.
For me at least, it's a tough job. I couldn't do this everyday if my life depended on it.
I'm glad I listened to the furry elephants.
Margin trading? How much leverage?
Either d_eddie is referring to margin, or alternatively, he is saying that he sold a certain decent-sized chuck of his BTC upon this recent price rise (which overall is selling on the way down.. but that is o.k. if it makes you more comfortable) in order to increase his available cash by 20% in order to prepare and insure himself for the possibility of additional down (although I find the characterization of insuring for up to be a bit confusing).
I am actually applying the 2J-ladder to a short, that is, I'm selling before I buy.
The 2J in the name is meant to credit the two distinguished gentlemen who recently discussed its details.
Your characterization is fair enough, because you seem to acknowledge that laddering is not a unique practice, but it is one that jbreher and I have gone on extended tangents to discuss our attempts at systemic ways to employ it.
The short isn't insured for up: it is actually an insurance for the rest of my btc in the case of downie-down. The "insurance fee" I mentioned is the price of blowing my short at the top (while selling off some actual coin on the way up, of course).
O.k. I think that I understand what you are saying, and there are probably various ways to frame the situation, but in essence if you are holding a decent amount of BTC... let's say 10 BTC, then if the price goes up 2x from $8k to $16k, then you could have sold 50% of your BTC and still be in the same place in terms of financial value. I don't like to have to rely on that BIG of a price jump in order for things to work out (but yeah we should also prepare for extremes because they do happen in bitcoin, too), so let's say for example that you hold 10 BTC and you hold $8,000. That would be about 9.1% of your BTC investment in fiat ((10btc x $8k = $80,000)+ $8,000 = $88,000), but you are feeling a bit nervous about downside scenarios, so you decide to double the amount of your available fiat by selling 1BTC, so you then have 9BTC and $16,000, which would be about 18.2% fiat ((9btc x $8k = $72,000)+ $16,000 = $88,000). In that case, you would have doubled the amount of fiat that you have available to play with, and if the BTC price ends up doubling by going up to $16k - you would thereby have ((9btc x $16k = $144,000)+ $16,000 = $160,000) rather than ((10btc x $16k = $160,000)+ $16,000 = $176,000).
Taking out insurance for the downside does have a price, but in the end, you may be able to play the situation in such a way that the outcomes end up being close to the same either way, while feeling more comfortable that you are prepared for either direction and you have enough downside price insurance (as you put it).
Edit: Fuck... this just ain't my day... d_eddie beat me too it and pretty much blew my whole speculation thesis out of the water by admitting that he is employing margin trading.
Sorry for both things.
- Didn't mean to beat you to it, but you know, I can be quicker because I type less (on the average)
Sometimes quicker doesn't work out as well as anticpated.
- I am a newbie trader, and I usually don't trade - but this time it's different, the line of mammoths spoke to me in their chilling calling sounds. They smelled a black swan. I got scared.
I admit that it can be a bit of a pain in the ass to attempt to find your comfort zone, and even to experience levels of temptation emotion to deviate. Furthermore, the market can play out in ways that are a bit beyond expectations and new preparations need to take place to ensure that you remain prepared for either price direction.
In the last month, I made a couple decently-sized tweaks, and I designed each of my tweaks in order to feel more comfortable for either direction rather than attempting to increase my profits. And, in November/December, I had to make a couple of decently-sized tweaks, too, because the price was performing more bullishly than anticipated.
Why do you call this scalping, are you taking a bunch of different positions at the same time on margin?
It's just one position, kept short at a semi-consistent size, with slowly growing value (entry point).
I am progressively making the position smaller by buying a tiny bit at a lower price, or making it larger by selling (shorting) a little bit at a higher price. Riding the waves trying to put a handful of froth in my pocket, so to say.
To me the term scalping means buying selling for really small gains like 1-5%....i could be wrong though
My understanding of the term is the same as yours. I think it fits what I'm doing.
That's what I am talking about!!!!!!!
At some point in the near future, we are going to have to refer to the d_eddie ladder-scalping method... a form of tailoring, tweaking and adjusting particular to bitcoinlandia...
