Reply To: Spot Grid DCA Mutation Project

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Before start talking about ideas and improvements I would like to explain why I think this strategy can give some mental peace compared to other strategies. Obviously it also depends on how you interpret it, but I will explain later why I think it.

On another note, in my opinion, during a bull run USD base pairs are a good choice. The trend is your friend, you know. Ok, supposing we add the pair USDT-BTC, my points are:

1- When BTC price is raising, this strategy takes advantage of it and keeps making profitable trades constantly.

2- When BTC is in a range, it keeps doing profitable trades. For example if BTC price is ping ponging between 30000 and 31000 range, it’s a very sweet spot for this strategy.

3- When BTC price goes down slowly, it gets a better average bought price and it gets rid of the bag with profit when the price bounces a bit, and at the same time starts a new cycle with a better starting point than the previous one. Note that the price never goes straight down or straight up, I mean, regardless the trend is upwards or downwards, the price is always bouncing up and down.

4- When BTC price drops a lot (worst scenario for this strategy running USDT-BTC pair) it can get stuck if it doesn’t get a good enough average bought price to sell with profit and start a new cycle. I have been running several versions and testing this strategy during almost 1 month, and at some point 4 of the 6 coins I was running got stuck. Two of the coins that got stuck got a good enough average price to sell with profit and start a new cycle quite fast (I think they were stuck for 2 days aprox). The other 2 coins took around 10 days to be released. At some point we could even manually sell a stuck coin taking a small loss as a cycling coin means profitable trades and it may worth it to take a small loss first to start cycling again and keep getting profitable trades as soon as possible. In this case it wasn’t needed, just thinking out loud.

At this point, after taking a look to all the possible scenarios, we can conclude that scenarios 1 & 2 are perfect, scenerio 3 is good enough, and scenario 4 is not that good. The question now is: How do we plan to “fix” or minimize effects when scenario 4 happens? I would like to mention 2 points:

a) Working on strategy variants / modifications that can make it to handle better these kind of scenarios.

b) Talking again about “mental peace”. I’m going to tell you my point of view. Some time ago I felt like BTC future eas uncertain. In other words, BTC was a flipping coin. The question is: Is it now? Maybe taking a look at these news you can get an idea of what I mean:

– Tesla buys $1.5 billion in Bitcoin and plans to accept it as payment. Full article here.

– Switzerland’s ‘Crypto Valley’ Has Started Accepting Bitcoin and Ether for Tax Payments. Full article here.

– Florida Tax Collector to Accept Bitcoin and Bitcoin Cash Payments. Full article here.

– Citibank says Bitcoin price will pass 300k$. Full article here.

– 11 major companies that accept Bitcoin in 2021. Full article here.

– Blackrock says Bitcoin will take the place of gold. Full article here.

I could post more news, but I think you get my point. What I mean is, in my opinion, it’s quite obvious that there is a high probabilty of Bitcoin price will reach to 150k$ at some point (maybe in 1 year or maybe in 10 years). My point of view is, during the journey to 150k I can keep getting a lot of trades, the longer the journey it takes, the better, as more trades I will get. The longer BTC is stuck into a range, the better as more trades I will get. The more ups and downs, the better. And taking a look to BTC price history… ups and downs are a constant. Would I be able to keep my mental peace while traveling through scenario 4’s desert? Definitely my answer is yes.

Obviously I’m aware of how risky crypto related investments are, I mean, someone could hack Bitcoin and be able to create more BTC, or maybe some regulations could hurt it… But at this point, and considering how big companies and even goverments are committing to BTC, I think the probability or something like that happening is really low and I accept that risk.

On the other hand, even if it’s too soon to take definitive conclusions, the data we have collected until now seems to point to the fact that the higher the volatility is, the more trades it makes and the higher the profit. Those who picked coins with high volatility got more trades and higher profits, but obviously they are taking more risk. And it’s not the same to be stuck with BTC than being stuck with Dogecoin…

Some people just added one pair: USDT-BTC, others added also ETH and other “mainstream” coins, and others added some random volatile coins. This is a personal call, as always.

The important thing here is that you feel comfortable with the risk you are taking.

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