Okay, a couple of questions about thresholds and rebalancing from Kopen. Ill use a real time example: MCO. First of all, weve got to distinguish between speculative and super speculative (which in the real world would be investment and speculative), and MCO is super speculative and was never meant to be anything more than a spec play. According to my bear market rules, no one superspec asset can account for more than 2.5% of the portfolio and must be traded in 1/6th size blocks, scalping 40, 50, 80 percent gains. MCO fell to 1.3% of portfolio size and I doubled down and brought it up to 4% (breaking my own rule, but I really liked the trade for more than an 80% gain at that point). My average buy was ~.00062. My first sell order was in for just under .001, and others were stair-stepped higher. Sold almost 2/3rds on the first run-up and banked around 2.5 BTC. That also brought its portfolio percentage down to 10% from a pre-sell 20%. Now, 20% was way out of line from what I should have done with a superspec, but I liked what I was seeing and I try to let profits run in spite of almost always selling early. Now its back up to 14% and this is a superspec position that is supposed to be a short term scalp! Time to bring it back in line! After all, its getting close to being a 20x off of lows. So that means selling another 60% of the remaining position to get things down to 5%, which will still be double what it should be! Ill then hang on to that until I get a sell signal, which I still dont have, but since Im a shitty trader, Ill stay safe, rebalance reasonably, and settle for the roughly 4 BTC Ill have banked for the 1 invested - and still have about another full BTC left in MCO, which is to say, paid for 4 times over.
Thats not an easy, nor very objective process. Should have been a 2.5% scalping position rebalanced/traded at 5% at most, but I gave it a bit more rein. Its a good project, but still on paper only, so Ill be cautious now with the gains.
As mentioned before in this thread, the rules for more investment grade stuff (what I dont care to become a bagholder with) in a bear market are to limit them to a 5% swing position (that can also have a 2.5% trading amount added to it). Ive got us in an intermediate term upswing at present though, so those figures are now doubled. Whenever they get to 30% portfolio percentages, they get rebalanced. Also as mentioned before in this thread, LTC is my favorite, should not drop below 25%, and has been as high as 50+%. In the bear market environment of last June-July, it was brought lower.
Not all selling is portfolio balancing based. Myriadcoin was a good example. I did not like what I was seeing technically, and I sold on small spikes to get out with a marginal gain. The same thing happened with Nxt, but only with a remnant position since I had a prior profit of an approximate 4x on 60% of the position.
You also asked about USDT in another post. I had all my fiat equivalent in SBD, not USDT. I share your same concerns about USDT. My position in SBD was also a hedge, reached a 30% of the portfolio position, and, along with LTC (which was being used by many as a hedge too) was intended, as such, to neutralize any move either positive or negative and basically keep me flat. Next time I do plan to also use BitUSD as well, and for very short term hedge protection, I will use USDT, but, again, very short term, and with lots of caution.
As I warned you before, it's not really all that rational of a process, despite being founded on rational thought and decision making. Flexibility is very important. After all, were actually responding to dynamic processes, and that means the input data is constantly changing and we need to adjust accordingly. Nonetheless, the interpretation of that data is subjective, and thats what turns theoretical objectivity into something that looks a little more like "flying by the seat of your pants than rational.
That having been said, and to answer another question, this one about what was special about my picks, here we have, aside from the technicals, something that is much more objective. LTC is going to be the BTC replacement, doing what BTC once did (safe storage of wealth), and more its faster and more innovative, and will eventually have a much larger real world use market share than BTC. Theres only 4 times as many LTC as there are BTC, which means it should be valued at around $1,100.00 USD at least! It's the best most undervalued coin out there in my opinion. STEEM is a game changer in blogging, period. BTS is the basis for the first decentralized crypto exchange that I think is very possibly here to stay. SYS has a crypto based market place in the pipeline that looks extremely promising. Those are my big plays. PIVX, XMG, NLG and GRS are more speculative, long shot bets. PIVX is using the masternode concept, XMG has a very interesting PoS code base, and GRS is a GPU mine only coin that really protects the interests of the small players thereby making it one of the few truly decentralized widely distributed coins really available to the masses. GRS could be a major winner one of these days. NLG is similar in a number of ways to GRS, and in spite of being aimed chiefly at the Netherlands, could gain worldwide acceptance just as the Swiss Franc has.
And just like LTC, they're all either undervalued or extremely undervalued!
Thats a generalized summary of the fundamentals, but they also need to be backed by positive assessments of the dev teams, future plans, user adoption, market acceptance, etc., so there's obviously lots more that goes into it. Then, when you see big money going after the same names, that helps to firm up decision making. All these markets trade very technically the opposite of emotional markets meaning professionals are highly involved. All in all, weve got great technicals combined with great fundamentals in all of these coins, and I would not be bothered in the least if I had to become a temporary bagholder and wait a year instead of a couple of months to reach targets with any of them. As Ive said before in this thread, the ultimate question I ask myself about any investment is if I would mind becoming a bagholder at the price Im paying. If the answer is yes, then I dont go there.
Hope this has helped to answer some of your questions. Do take the time to study the thread. Im certain it will be worth every bit of your time. And dont hesitate to ask more questions or even for clarification. Its good for me to keep the wheels spinning!
Sold around 60% of my remaining MCO.
https://i.imgur.com/xYzS9l8.jpgIt'll probably move higher now.
