I have been watching the adjusted transaction quantities reported by Blockchain.info for a reversal. I believe price is leading transaction quantity, to the extent that price and transaction quantity are weakly independent. There is a hint now of a reversal to confirm what we have seen in price action for a few days.

https://blockchain.info/charts/n-transactions-excluding-popular?showDataPoints=true&timespan=30days&daysAverageString=1&scale=1&address=

Chart display options include a 7 day average, and also a longer duration of data.

It is pragmatic to set aside conventional wisdom, but not mathematics, when analyzing the adoption of an unprecedented disruptive financial technology.

For example, nothing we ever experienced would help us understand the future value of a deflating currency. The price series suggests that given a fixed limit of 21 million bitcoins, the value will continue to trend higher as it has done in the past. Mathematics and statistical evidence of adoption rates may allow us to recognize the halfway point of adoption as it happens, at which point the exponential rate of price increase will rapidly diminish.

Those who wait for bitcoin price increases to be guaranteed will be very late adopters.

Is there any point on your charts prior to this year when the price dropped down to less than 1/3 of the all-time-high (at that time)? Ie once it hit $100 did it then even drop below $33? Once it had reached $300 did it ever drop below $100?

I will start using your system when BTC hits 1000 USD:

I will sell 10% of my "HODL stash" between 1000 and 2000 USD (so 1% @1000, 1% @1100, 1% @1200, ...)
When we double to 2000 USD, I will sell 10% of the remaining stash between 2000 and 4000 USD (so 1% at 2000, 1% at 2200, 1% at 2400, ...)

I bought in between 50 and 200 USD, so I will start with a decent profit
(And as a poor student, I can use the money)

thx for sharing!  

nice plan, ty risto

I hope you will spend your BTC rather than sell them.

I all of the sudden realize something, and maybe finally get the remark of Risto. It is quite likely that if bitcoin hits $1 million, there is no/less urge in 'cashing out' in fiat. It actually by then could be considered quite risky, switching to a centrally controlled non-crypto money. The world would indeed be different than today's. Interesting!

Thanks to OP for outlining the SSS plan and discussing the various advantages of having a rake plan.

I like this b/c I do NOT consider myself to be an all or nothing investor, and I can apply several of the principles to my own BTC investment situation.

I have been inspired to outline my own variation of such a plan, which in essence embodies the concept of small amounts of rake for the purposes of trading that are going to be triggered at increments of 10% rises in BTC prices - and also based on my average price per BTC and then periodic larger amounts of rake triggered (more permanent) at the doubling of my investment - to take off the table up to 10% on the first doubling and likely to take off nearly all of my invested capital by the second doubling of BTC prices  (which hopefully, some day will come).

I will probably play around with Excel to provide me with various categories to monitor my investment using variables that I like to monitor, such as my average price per BTC.

Currently, my average price per BTC is $607 (including transaction fees), so it is very likely that various 1% trading rakes will be triggered this year between about $670 and $1,140.  And, then a more permanent 10% rake will be triggered around $1,214 - hopefully by possibly 2015, but i am o.k. if it takes a bit longer, if that is what is in the BTC cards (which seems unlikely but possible).  I am still considering the possibility of skipping the permanent rake on the first doubling of BTC in order to take my complete investment back upon the second doubling - which would be 25% on the second doubling.

Regarding strategic forms of dollar cost averaging, I am a true believer in that practice of dollar cost averaging for a couple of reasons: 1) when prices of the asset are going down - especially after a recent bullrun (which was the case in NOvember 2013), it would be better to get in slowly and then to increase capital at lower BTC prices rather than going all in at that point in time - which was the case with me in November 2013 (I could have been invested in BTC at $1200 per BTC, and instead, currently, I am invested at $607 per BTC b/c I followed a form of hybrid DCA) 2) a person may NOT have a lump sum to invest when s/he first becomes interested in making the investment, and may be forced to buy into the investment as his/her salary comes in.  

On the other hand, if the asset is surely way under priced, as seems to be the current BTC situation (as compared with late November 2013), it may be better to be a little more aggressive on the front-loading of the investment rather than DCA in order NOT to miss the boat when or if the boat leaves the loading station... or the train or rocket or whatever leaves.

AT this point, I am NOT planning to implement that level of BTC trading, and I will only be trading with the portions that I rake in about 10% increments of BTC appreciation and only 1% of my total  BTC investment by using preset values that I calculate and input into trading at the time that the rakes are triggered. 

At this point, I view my plan as somewhat in the hypothetical b/c my BTC portfolio has been pretty much in the red since I started with BTC since November 2013 - however, once my BTC portfolio is in the black and my trading rake and trading plan are triggered and I play around with it for a while, I will likely provide more details.