Project: Bitcoin -- Status: Bitcoin; NEM; Nexus; Safe Exchange; Stratis; Status; Syscoin

Status update: 2017-08-14

Bittrex Balance: USD -10%; BTC -40% (BIG improvement since last update)



The stock market is a device for transferring money from the impatient to the patient.

-Warren Buffet



It has been a few weeks since my last update, but before I go into that, first a big shout out and congrats to those that have been holding AntShares/NEO, OMG, or Civic!

Everyone was waiting for NEO to rocket, and it finally did! I hope you all made a very nice profit, and if you are still in it I hope you will gain even more.

I only had 30 NEO, bought at 7 (before it dropped to 3) and sold it at 32. Could have gotten more, but I walked away with a $700+ profit. No regrets.


Over the past week I have been trying to finish this update, but the market is moving and changing so quickly and I am learning so much, that I went back to rewrite sections multiple times up to a point where it just became an incoherent wall of text.

So I am going to keep it relatively brief and to the point.



You probably have seen the thread going around the internet called: How I fucked up and turned ~600 BTC into 200 BTC

It's a crazy story, but I recognize some of his mistakes, because I made the same, and the text below I wrote prior to reading that thread. While coincidental, I think it's pretty common for a beginner.


I came into Crypo, fully intended to buy Bitcoin and HODL, but very quickly got distracted by altcoins and ended up with a bag of alt/shitcoins which I bought very close to the previous highest highs, and all ended up in the red. At a later point, when I wanted to test some new ideas I added a few hundred more to put in test coins, which also ended up in the red. I didn't even get to test; they went straight into the red even though the charts were looking favorable.

Leading up to the fork and having studied my losses, I started to realize that HODLing losing trades probably wasn't a good idea despite what 90% of the crypto community thinks, but considering I was the noob in the room who hadn't been through a full cycle yet, I gave the community the benefit of the doubt and kept my altcoins.

The same community was convinced that Bitcoin Cash was going to crash, despite me being open to the Bitcoin Cash solution. I think Bitcoin Cash is on the right side from a philosophical perspective, and Bitcoin Core from a practical perspective even though I really don't like what they are doing.

Prior to the fork, based on aforementioned and because I had no idea how the fork would affect the individual altcoins and my portfolio as a whole, I decided to HODL my altcoins, do not pass 'Go' and do not collect Bitcoin Cash. My portfolio wasn't in a great state and I did not want to make it worse by making a wrong move, again.

The fork was a very enlightening experience for various reasons but you were there, so I will skip that part.

One of the things I was most curious about during the fork, is how altcoins would behave. Each have their own character and during times like these they are tested. It is where the shitcoins are separated from the altcoins.

When the altcoins started to bounce, it became really interesting.

1: I started to notice that my overall balance didn't really improve because I was holding too many coins, and different position sizes. Some bounced, others not so much.

2: The test coins I bought after my initial investment came back into the green first. In the meantime I updated my spreadsheet to expose price divergence using my BTC and USD purchase prices as a baseline, and lo and behold, they did diverge, and quite significantly. At some point I had trades which ended up in 30% profit in USD, while still being in the red when measured in BTC.

Side note: You could argue that I got my money back, and in a way that is true, but I want my BTC value back, because that is what I originally bought.

With the confirmation that HODLing losses was indeed working against me, I acted right away, re-balanced my portfolio, and consolidated most of my losses. If I have multiple altcoins with losses within a range from 10-30%, why not consolidate them in 1 altcoin which has much more potential and could gain 30%, right?

In the meantime, I was tracking an asset for a couple of weeks already which caught my attention before it suddenly got hyped and took off. I took the profits from my test coins first and used the proceeds to buy this new asset, and as the price increased, I started to pull the trades of the worst performing assets/losses one by one, and moved what remained into this new asset using the pyramid strategy.

Within an hour my portflio improved quite significantly.

Not only did my new selection make profit, I protected myself from further losses on assets which continued to drop after I pulled them.

In hindsight I could have done a lot of things much better. For one: If I would have bought Bitcoin and didn't do anything at all, I would be in a much better position, but I had lessons to learn, and I feel pretty good about the fact that I took action right away when I understood what needed to be done. I took my losses, profits, and I re-balanced my portfolio.

I am especially happy now that some of the altcoins I owned, became Dogecoins today, like Sia. lol

(There is actually a very interesting story to Sia, which should serve as an example for other projects. Long story short: They mismanaged their project beyond believe.)

Next step is start shifting to a BTC dominant portfolio.

Funny thing: After about half a day later I saw divergences creep back in on my new trades and while this is line with expectations, I was a bit surprised how quickly that happened. It puts another emphasis on why HODLing altcoins only works under specific circumstances, especially now that BTC is rocketing/killing the altmarket.

When the BTC king rises, the altcoins bend their knees.


Re-balancing:

Old portfolio, after the fork:
Assets: Antshares, Bitcoin Core, Burst, DigiByte, Golem, NEM, Nexus, Pivx, Siacoin, Stratis, Verge
Status: USD -30% loss; BTC remained unchanged at -50%

New portfolio, after re-balancing:
Assets: Bitcoin Core, Bitcoin Cash, NEM, Nexus, Safe Exchange, Stratis, Status, Syscoin
Status: USD -10%; BTC -40%

I am well on my way to get back my investment in USD, but still have a long way to go to get my BTC back.

My portfolio is now a lot closer to what I want it to be, I have become a lot more knowledgeable since I bought my first shitcoins, I have settled on a strategy and set of indicators, I found the right sources to follow/learn from and know who to ignore, and overall I think I am much better positioned right now to earn it all back, and go beyond.

While there is still lots to learn, I think I passed though the learning curve, and settling down.

My portfolio and trades aside, I have been paper trading over the past weeks as well, to test my indicators and entree/exit points, and this is looking very promising.

I haven't felt this confident since I started this project.



Other items worth noting:

• There was a point where I wanted to get rid of my 150 Stratis, and I found that I couldn't. There were buy orders but the first page didn't even amount to what I was trying to dump, unless I would sell them really cheap. This puts another emphasis on how important it is to sell in strength. In Forex you can buy/sell at any time because of the volume but in this market, it is easy to get stuck. Which brings me to the following bullet:

• Every time when a top or bottom is reached a distribution or accumulation phase takes place. Meaning, those with lots of capital will sell all the way to the top to the noobs, and when it tanks the accumulation phase begins by buying from the noobs who are selling it at losses. In order to get rid of lots of capital, they have to sell in strength otherwise there is no one to sell it too, and vice versa. It is important to follow these phases because even with very little capital, in this market you could find yourself looking for buy/sell orders where there aren't any.

• I performed a number of back-tests on trading view to test indicators. Of course, none are profitable by themselves, but it does give you a very good idea on the accuracy of an indicator, in this market, under historic conditions. The RSI came out as a clear winner.

• I have a script which is used for pump and dumps, which I want to utilize for different purposes. I have more testing and tweaking to do on a demo account, but the idea is that you can perform actions using a script through API on Bittrex, at a very high speed. I am particularly interested in the ability to dump assets quickly, because of the following bullet:

• Call me crazy but I think the market is in for a crash, this year, and will be followed by a multi-month bear market. The market will continue to expand and prices will grow in the long term, but I really think that the increases we are seeing today are unsustainable and pure FOMO. On Telegram, I see so many people asking how to buy NEO, without knowing anything about anything. "Guide me to buying NEO, please!"

It's scary. Red flags everywhere!

People are selling their souls to get into BTC and NEO.


I really think BTC will crash, maybe once it has bumped into $4800. It might kill the altmarket in the process.

As such, I have set up my account with Vaultoro, and the moment I think I need to bail, I want to use my script to dump all altcoins, and send all BTC to Vautoro to buy Gold until the storm passes.

Having said that: My portfolio is not there yet. Gettng closer to it, but I have a few altcoins I still need to get rid of.




Some other notes (to be incorporated in the posts below):

This is Project Bitcoin, and not Project Shitcoin, so making a few changes to my strategy.

Strategy:
• HODL BTC
• Only trade altcoins in up-trends (when price above 50 EMA, and outpacing BTC)
• HODL altcoins only when you get in early and expect a rally in the very short term, and use a stop loss/take profit order to lock in your investment


Indicators (always on)
Candle sticks (W, D, 4H)
20 and 50 period EMA
Stock RSI

Indicators (when additional information is required)
Candle sticks (1H, 15M)
Fibonacci retracement / Extention
Momentum indicator


Milestones:
1: Earn 10 bitcoins and put 5 in cold storage
2: Earn one years worth of salary
3: (Locked)
4: (Locked)


On a final note: I initially started doing big updates on a Sunday, but moving forward I will be providing smaller ones throughout the week. I am finding that I am unable to finish an update in one go, and when I do, parts are already outdated and I leave out subjects I think are interesting to share.


Ps: Blockfolio is a great mobile app which allows you to track a ton of coins and set alerts. Slick design as well.


Pss:








------------------------ Original Post

I am one of the many who didn't buy Bitcoins despite becoming aware of them pretty early on, but I am looking to get more knowledgeable and get in, because I still see a huge upside potential.

I will allocate 10K to cryptocurrency, and will do so publicly, for everyone to follow along (or build upon).

It will be a win, or an epic and public failure.

I am doing this for a couple of reasons:
• A rising tide lifts all boats.
• Share research and progress with anyone interested in Bitcoin and how to get started.
• Possible GLP collaboration. (share knowledge/best practices)
• Your entertainment. (if I fail)


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This post will be updated continuously as research progresses.

First and foremost...

Profit potential:

A few of the reasons why I didn't buy Bitcoin yet is because it is uncharted territory and it is hard to tell where this can go. There was hardly any technical or fundamental analysis you could apply, and when I tried it a long time ago, it was not user friendly at all, and still isn't actually.

It is still difficult telling where this will go, but I believe that this technology will become mainstream when it becomes more user friendly. The underlying benefits of Bitcoin are clear to us on GLP (and criminals), but in the end, whether people will adopt it will boil down to convenience (and regulation).

Below a chart on technology becoming mainstream and fully adopted. What this tells me, is that despite the price of Bitcoin today, there is still a huge upside potential.



How long until mainstream adoption? [link to www.youtube.com (secure)]

I am looking to step in after a retraction and I will expand on strategy more later on, but I've put together a basic table which allowed me to play with a few variables and plot scenarios. Below a screenshot of an easy to read configuration:

This scenario takes into account a few premises:
• The investment is not counted as profit.
• The first 10K is considered break even.
• It's a long term play.

Stating the obvious: Buying more coins will increase your profit before Bitcoin runs out of steam.




Money Management:

Observations:

Having a Forex background, I am looking at the cryptocurrency market through an FX lens because of its similarities, but there are some clear differences as well.

Not only is this new market comparable to Forex, but it is also very much comparable to the rise of the internet and the inevitable crash that followed, bankrupting approx. 50% of the internet start-ups.

Similar to the rise of the internet, we are currently seeing lots of developers trying to take advantage of this brand new market. Some of these companies have a vision and offer true value, while others are just coming up with services and gimmicks to put on top of a blockchain hoping to get rich overnight.

This is a clear distinction between traditional currencies traded on Forex and cryptocurrencies. Traditional currencies have true value, whereas the vast majority of the cryptocurrencies have not, or at least not yet.

As such, I came up with the following cryptocurrency rating system to mitigate risks.
Green: Safe to keep in cold storage; Long term
Amber: Good for trading only; Short term; Pump and dump
Red: Stay away


Long term forecast:

Over the next 5 years, the market will see a large influx of speculators and the first waves of actual active users. The market will mature and slowly find the true value of the projects/cryptocurrencies being launched. The market will remain extremely volatile until the number of active users exceeds the number of speculators, in terms of volume.

Bitcoin will remain strong and will reach 100K per coin, both because of its brand and because it serves as a gateway to altcoins. Once cryptocurrencies become mainstream, bitcoin will drop in value and gets overtaken by better technology.

Having said that; Until we arrive at the tipping point where the number of active users exceeds the number of speculators, speculators will continue to drive the price through pump and dumps, hypes, emotional bias, sentiment, and to some degree true value, which is going to provide for many opportunities to take advantage off.


Strategy:

• HODL BTC
• HODL altcoins only when you have done your research, you are early, and expect a rally in the very short term
• 50% of total investment in cold storage (long term)
• 50% in Bittrex for trading (short term)
• Diversify digital asset: Currencies vs. Services; Protocols vs. Dapps; Low vs. high risk/reward
• Always be prepared for a big crash


Milestones:

1: Earn 10 bitcoins and put 5 in cold storage.
2: Earn one years worth of salary.
3: [Locked]
4: [Locked]


Trading:

Indicators (always on)
• Candle sticks (W, D, 4H)
• 20 and 50 period EMA
• Stock RSI

Indicators (when additional information is required)
• Candle sticks (1H, 15M)
• Fibonacci retracement / extention
• Momentum indicator

• Buy when its red, sell when its green (buy low, sell high)
• Don't chase a trade (FOMO) (if a coin goes up more than 100% in a short period of time, expect a 50% retracement)
• Trade liquid currencies; $500K volume as a minimum
• 10% of total investment per short term trade
• Only trade altcoins in up-trends (when price above 50 EMA on the daily, and outpacing BTC)
• Use stop loss orders to minimize losses
• Use take profit orders to lock in profits
• Don't go all in, ever
• Don't trade on margin

• Follow the accumulation and distribution phases



• Take into account human psychology




Emergency Exit Strategy::

• Buy Tether (price pegged to USD)
• Buy Xaurum in Bittrex (price pegged to Gold)
• Buy Gold on Vaultoro (price pegged to Gold)


Digital Assets:

(ratings will be subject to changes as I become more knowledgeable on the projects)

Green:
Bitcoin (currency)
Bitcoin Cash (currency)
Dash (currency)
Decred (currency)
Ethereum (protocol)
Ethereum Classic (protocol)
Factom
IOTA
Lisk (protocol)
Litecoin
Monero (privacy)
NEM (currency)
NEO (protocol)
Nexus (currency)
OmiseGo
Pivx (privacy)
Stratis (protocol)
SysCoin
TenX
Tezos
Verge (privacy)
Xaurum (gold; hedge against bitcoin)
ZCash (privacy)

Amber:
Aeternity
Ark
Augur
Basic Attention Token
BitBay
Bitcore
Blitzcash
Blocknet
Burst
Bytecoin
Civic
CloakCoin
Cofound.it
Counterparty
Crown
Digibyte
DigitalNote
Dogecoin
DopeCoin
Filecoin
GameCredits
GCCcoin
Golem
Golos
GridCoin
Heat
Humaniq
I/O Coin
INPAY
Kore
LBRY Credits
Magi
MaidSafeCoin
MobileGo
Monaco
Musicoin
NAV Coin
NeosCoin
NXT
Patientory
Pillar
Populous
PotCoin
Radium
Radix
ReddCoin
Ripple
Safe Exchange Coin
Shift
Siacoin
Status
Steem
Stellar Lumens
Ubiq
Veritaseum
Vertcoin
Viacoin
Voxels
Waves
Wings

Red:
Chaincoin
Syndicate
Bitconnect (MLM/HYIP)
Genesis (MLM/HYIP)



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Please feel free to share your favorite exchanges, sites, tools, strategies and best practices, or bad experiences and fraud to help your fellow man.

I will improve the content through my research and with the feedback provided.


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Disclaimer: Trading is counterintuative and comes with high risks, which is why 90% lose their money. Information and opinions shared in this thread does not equal financial advice. Do your own research, trade at your own risk, and only trade with money you can afford to lose.

Last Edited by Psych on 08/17/2017 03:38 AM