This is a brief post, mostly to address points discussed with other forum members in replies and comments below various crypto trading blogs here.
It seems that we all sometimes buy assets in 'packets' and later we are trying to sell these packets above the averaged price.
I am showing below a simple graph, to show how my team deals with this:
I believe the image is nearly self-explanatory. The only thing that may require any further comment is: How much asset to buy in each packet.
Well, we are trading on both sides of the market (trading long in the upmarket, selling short in the downmarket) hence our packets are small - mostly less than 10% of our crypto trading budget (our gold and crypto budgets are separate, and their ratio is about 2:1).
If we were trading only crypto, and only the upmarkets (only long positions, no short sales) then our packets would be very small initially, but getting gradually bigger - in deeper market swings.
To give you a perspective: back in 2018 crash market I traded long only. I averaged BTC at 9k when the market crashed again. I doubled the long position - again averaging my pile of BTC to about 6k (by borrowing USD against a long position in gold). Over the following 6 months I was unemployed (trading gold only - with 50% of my former gold budget). And hardly surviving. Patience. And faith in ones guts. But it was a close call.
My old trading friends were laughing. They knew I was cooked. Now I have new friends. None of them is old.
I hope the above is a simple explainer of how we get this done.
