- Nov 19, 2020
- 561
- 316
Relatively new to crypto space, I'm experimenting with spot trading.
Let's say that you have a capital of $10.000 USD. You start off your first trade by buying BTC with a very very low percentage of your capital, around $10 USD.
If BTC rises, you can cash it out when it goes up 0.2% - 0.3%, depending on your strategy and start a new trade.
If BTC dips instead, you buy more with double the money ($20 USD) , so you average your position down.
After averaging down, you repeat the process. If we go up you cashout, if we go down you buy $40 worth.
Obviously this is very boring to do manually and a bot would need to be set up, but could something like this work? I'm not aware if people are doing it already.
The key for me is to invest so little that even if BTC pulls off a crazy -90% , you will STILL have enough money to buy and average down your position.
In my opinion the only downside I see to this is :
- Either having a very strict sideways movement (higher than your next buy order and lower than your sell order )
- A huge crash that will bring crypto all the way down to $0 , but I don't see that happening til quantum computing takes over.
Thoughts ?
Let's say that you have a capital of $10.000 USD. You start off your first trade by buying BTC with a very very low percentage of your capital, around $10 USD.
If BTC rises, you can cash it out when it goes up 0.2% - 0.3%, depending on your strategy and start a new trade.
If BTC dips instead, you buy more with double the money ($20 USD) , so you average your position down.
After averaging down, you repeat the process. If we go up you cashout, if we go down you buy $40 worth.
Obviously this is very boring to do manually and a bot would need to be set up, but could something like this work? I'm not aware if people are doing it already.
The key for me is to invest so little that even if BTC pulls off a crazy -90% , you will STILL have enough money to buy and average down your position.
In my opinion the only downside I see to this is :
- Either having a very strict sideways movement (higher than your next buy order and lower than your sell order )
- A huge crash that will bring crypto all the way down to $0 , but I don't see that happening til quantum computing takes over.
Thoughts ?
