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| danny_galaga:
--- Quote from: Zebidee on May 10, 2021, 10:01:08 pm --- --- Quote from: fallacy on May 10, 2021, 10:49:23 am ---Noob, if he thought that way he would have already sold long ago. He will sell when he can think of a better investment to put that money into. --- End quote --- That's not how it works if you actually want to make money from investing. I'm not saying that "long-term hold" isn't a valid strategy, but it isn't one to apply to highly speculative stocks like bitcoin. Risk management: A good strategy would be to minimise future risk and to lock in gains already made by selling a portion at either a pre-determined profit level, or once it has fallen a certain level from a peak (tip: you can do both with provisional stop-loss orders!). Managing your risk is the most important thing when investing, and once you have made a paper-profit you are at risk of losing it. So lock it in by selling some. If you still believe in bitcoin, you can buy back in later when you think the price has fallen enough and an upward trend is starting. Another reason to sell some is that highly speculative stocks should make up a quite small proportion of your portfolio. The exact proportion is up to you, but my point is that if Bitcoin has gone up dramatically, an initially small proportion is now a relatively large proportion of your total portfolio. If something happens to it, you'll be hit hard. So again, de-risk yourself by selling some to bring your portfolio balance back into line. If you don't care about portfolio balancing then you don't care about risk, and you are just gambling. May as well head off to Vegas. In general you shouldn't sell something just so that you can buy something else. That's because the best times to sell and buy rarely coincide. Rising tides lift all boats, and rising markets lift all stocks. The time to sell is usually when the markets are up, and the time to buy is usually when they are down. It is therefore good practice to be disciplined with your buying and selling decisions, don't link them directly together because you set yourself up for selling and buying at the wrong times for the wrong reasons. Might sound funny but when the GFC hit, my first thought wasn't "OMG my stocks have lost all their value!", it was "damn, I don't have enough cash to take advantage of the bargains". If only I'd sold some stuff earlier at "fair value", made some more cash available, I could've made a killing on undervalued stocks. But selling into a depressed market to get money to buy stuff with is crazy. The best times to buy and sell rarely align. --- End quote --- Exactly all this. I'm not saying vocalitus has to do anything we say, especially if he only spent say five bucks on Bitcoin at the start. If it disappears tomorrow he's only lost five bucks. But if a dollar investment then is now worth say fifty Grand now, it sure would be sweet to just sell 10-20% of your holdings right now. :cheers: Oh and Zebidee, I feel you. I've had three occasions now where markets feel sharply and I didn't have enough cash to take advantage. Doh! |
| danny_galaga:
Fell sharply. It's insanely difficult to edit a post on my phone :timebomb: |
| Zebidee:
--- Quote from: danny_galaga on May 11, 2021, 09:41:13 pm ---Exactly all this. I'm not saying vocalitus has to do anything we say, especially if he only spent say five bucks on Bitcoin at the start. If it disappears tomorrow he's only lost five bucks. But if a dollar investment then is now worth say fifty Grand now, it sure would be sweet to just sell 10-20% of your holdings right now. :cheers: Oh and Zebidee, I feel you. I've had three occasions now where markets feel sharply and I didn't have enough cash to take advantage. Doh! --- End quote --- Using your limited cash to buy into something is a bit like being a sniper with a musket. You only get one shot and it takes ages to reload. Choose your targets carefully and aim well :D However if you prepare and sell something to cash up during good times (and wait 3 days for the funds to clear in many cases), it is like having another few muskets ready and on hand during the bad times, when there are plenty of easy targets. Aside from hoarding cash, there are a few sneaky ways to make sure you are cashed up in a crisis. However they all come at a cost, bit like insurance. Warning: these are only for "active" traders that know what they are doing. You can use derivatives, like contracts for difference (CfDs) or options, to make bets that the market goes down. These come in all kinds of flavours but are usually linked to specific tradable securities (hence "derivative"). You can massively leverage your exposure and risk (and gain) with these so take care. An interesting and less-risky one is an index warrant, which as the name implies are linked to market indexes. These also come in different flavours, but are very like insurance policies in that you buy the right to sell (or buy) at a set price. They can be set to automatically execute if certain conditions are met (NASDAQ falls by XX%), but they also have time limits. If the market tanks you trade the warrant for a cash bonanza when everyone else is floundering around cashless and selling cheap. Because they can be executed automatically, you can cash in while drinking daiquiris and eating peeled grapes by the pool. YUM YUM. DISCLAIMER: Follow my ideas at your own risk! Always seek financial advice from some qualified person in you pay, that has insurance for when you sue them, before investing on some dumb idea from a guy giving armchair advice on BYOAC. |
| danny_galaga:
Definitely no derivatives of any sort for me. And no leveraging. Just what I can put away. Mind you, I am thinking of buying a bit of Bitcoin and etherium, which for all intents and purposes is a derivative- that is, not a commodity. A friend has been trading for a number of years so aim getting learned up from him. |
| Zebidee:
--- Quote from: danny_galaga on May 12, 2021, 09:32:38 pm ---Definitely no derivatives of any sort for me. And no leveraging. Just what I can put away. Mind you, I am thinking of buying a bit of Bitcoin and etherium, which for all intents and purposes is a derivative- that is, not a commodity. A friend has been trading for a number of years so aim getting learned up from him. --- End quote --- Safer. Don't learn just from your friend, even if they are wise. While I'm sure you'll learn things from them, you'll also pickup their bad habits (we all have them). Grab a few good books on share trading and investing, and if you want to be an active trader get at least one on trading to charting signals. Charting is a good way to pick up on short-medium term price trends, though there are a few caveats to that. You can mostly ignore charting if you are a longer term fundamentals buy-and-hold investor. Whatever you do, develop an investment strategy and trading plan that works for you *and follow it*. It is your precious money so protect your capital by diversifying your investments across different sectors and markets. Decide what proportion you want to actively "play" with for short-term & speculative trading and stick to it (I would keep this relatively quite small). Continuously adapt your trading plan as needed but follow the plan, let it tell you what to do. Avoid making decisions "on the fly", while the numbers are whooshing past you - it doesn't work as emotions will override good sense. |
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