BITCOIN... HOLD, CLOSE, JUMP IN MORE...?
*NOTE You can follow and even copy all my trades in eToro, go to my website www.willscubatrader.com to find out more.
BITCOIN... HOLD, CLOSE, JUMP IN MORE..?
I’ve been scratching my head for the past half an hour trying to come up with any holes in the strategy I’m about to put in place... this requires a few facts.
My allocation in $btc of my total equity is 3.32%
It makes up 5.89% of my risk factor as it is deemed volatile but not as back as most of the other cryptos ( To answer 99% of questions on the risk score search ‘willscubatrader what number are you’ and the in-depth article will come up)
My exposure is 3.79%
My BTC trades are currently on average 30% in the green (this is important at a later point)
Earlier this morning I closed almost 50% of my holdings in Bitcoin (on eToro) as the was a divergence point of two trend lines and thought there could be a correction coming. However overnight the market exploded and it smashed through these TP and kept going. - Don’t get me wrong I am very happy with the profit and will never regret a green trade, as chasing missed profits is a sure fire way to lose money-
So here’s the dilemma, I want to capitalize on the upturn in BTC, but don’t want to over expose myself in the event of a big correction.
I will attempt to protect our equity in the event of a drop while holding enough to ride the wave where ever it goes to.
Some of the following figures are not quite perfect as they are always changing and the units throw it off a little.
Step 1
Set my current trades on Trailing Stoplosses with a buffer between 5%/10% (the trades are staggered and some range from 56% profit to the lowest 14%)
Open new trades (ideally on orders lower than the current ATH (All time high) to the same value as the current trades at their opening $ value.
So I will effectively be doubling my invested amount.
Scenario 1
Bitcoin continues to rise, all is good the profits keep clicking upwards. I reset the SL (stoploss) to tSL (trailing stoploss) once I’m happy with the current profit and sitting nice and pretty.
Scenario 2
There’s a drop of 20%
My current trades cash out with still an average of 20% profit (as the tSL will cash out when the drop hits 10%)
The newer trades go into -20%.
However my exposure is still the same before I opened the newer trades and I still have that 20% profit from the first round of trades in my available balance to pick up some cheaper Bitcoin.
Don't forget that you can copy all my crypto and stock market trades like for like on eToro either with a free virtual account or real money.