So, all you folks who try and sell at the start of a big crash to buy in nearer the bottom. Do you keep your coins in an exchange ready for such an event, or do you move them across when you think the time is near?
I saw there was a guy in this thread who went from 50 to 70 doing so - that doesn't sound like day trade play money. I'd be concerned about leaving a big stash of BTC in an exchange given how Wild West some of the BTC world is. I guess the chances are small if it's just temporary, but would any of you be concerned that BitStamp or Gox could get hacked, or go out of business, for example?
I have 2/3 of my stash in bitstamp and 1/3 in wallet. I think the risk of losing coins in bitstamp is so small that I'm willing to take that risk, because it lowers other risks. Bitcoin as whole has risks, wallet has risks, bitstamp has risks, how big is the risk and how much can you protect your wealth are the important questions.
For me trading is about lowering the risk of losing money, I think buy and hold has more risks than low risk trading, even thou you have to keep majority of your coins in exchange.
Here's a pic that maybe tells something about my mentality:
In this case you are losing coins, but your wealth is better protected. It's like paying "crash insurance". And if you do this always, someday you will win big when big crash comes. This isn't as easy to do as it seems in the pic.
The most important thing in low risk trading is buying back in with loss and this could be majority of your trades. Winning trades are just so much bigger that this doesn't just lower your risk of losing wealth but it also is better for your coin stash in the long run. (maybe)
EDIT. One important thing to add is that I'm doing this full-time and has been doing and studying this over an year full-time. Don't trade if you don't have time to sacrifice to it.
Hahaha, very nice to see something I do myself put into a crude pic
But really, I have a similar line of thought in my trading. It's a balance... on the one hand, I believe we are now in the "land grab" phase. Forgot who called it that first. But for land grab to be useful, land must have max value in the long run, i.e. BTC must succeed (where "succeed" is somewhat complicated to define... I'll just say I don't believe in the binary model many here seem to follow, where BTC is either 0 or 1 trillion per coin).
So the hedge against land grab being useless (because BTC fails) is to secure fiat profits if there's indications that we're going down for reals this time. And since all of this is based in a purely probabilistic setting, all actions are based on mixed strategies, in game theory terminology.
So a) I try to trade swings profitably, b) avoid swings if I can't trade them profitably (because I missed the inflection point), and c) in violation of a) and b), trade swings *at a btc loss* if I have reasons to believe it is a necessary hedge against total fiat loss.
