I've been making a lot of "THE SKY IS FALLING" posts about the Bitcoin market right now. During these extremely volatile times it's hard to keep a cool head, and I make it no secret that I am "overwhelmingly bearish" right now.
Because I really can't be THAT bearish... I often neglect to say that I am still totally 100% all in right now. I have no fiat reserves to spare should the market crash from here, even though all my predictions are nothing but gloom & doom with blood in the streets.
Well, first of all, I'm a diehard zealot holder. If I could hold during a crippling 3-year bear market I can hold for one more year while the price is going up. No problem. So perhaps all the gloom and doom is simply all part mentally preparing myself for the worst, as has been a common theme for the last 3 years.
At the same time I'm really hoping this 2019 fractal pans out, because that will give me the opportunity to sell some of those gains into fiat so that I actually have some stability in case my predictions come true.
That's where the 20-point system comes in. I need a trading system that will keep me grounded so I don't make foolish and impulsive decisions based on irrational emotions. We've all been victim to selling a dump out of fear, only for the market to recover as little as a day later.
By dividing the money I'm willing to gamble with into 20 blocks of 5%, I feel like this is just enough to play around with while also avoiding moving in or out of the market too quickly.
Even though I'm EXTREMELY bearish on Q1? I still wouldn't recommend exiting more than 3-5 points at the moment. Even if this fractal pans out and we are trading near all time highs in a week, I still would not recommend exiting more than 10 points. Having skin in the game is important for a variety of reasons.
So of course, when I was trying to think of a name of a 20-point system I thought of this scene from Role Models with Paul Rudd. This is the only role I've seen him in where he is unapologetically depressed and a total cynical shithead who's way too good for the job and position in life he has currently. I can relate!
IT'S CALLED A VENTI BECAUSE IT'S 20 OUNCES! TWENTY!!!
[Looks at cup mildly impressed]... Is that true?
Ah yes, the strain of being an insufferable dick who hates everything can be a strain on any relationship. Watch the movie to see Rudd hit rock bottom and get forced to babysit a LARP nerd via court-ordered community service. Shoutout to Study Wings. Priceless.
Shit, this kid really jacks you up!
Just some variables to consider.
This isn't your total stack; this is the subset you are willing to gamble with. My recommendation would be that no one should gamble with more than half of their total stack. So if I had 2 BTC total one of them would be in cold storage where it belongs.
Therefore, if I was to say something like I'm 4 points out that's 20% of my bankroll, but only 10% of my total stack due to half being in cold storage. As a gambler, Bankroll is only as much money as you're willing to lose.
Take this money and light it on fire.
Did you cry?
That was too much money.
--- Andreas Antonopoulos
This is the limit one sets for themselves in advance so that we don't do anything stupid and have time to think about decisions. Essentially, we could tell ourselves that we aren't allowed to move more than one "point" (5%) in or out of the market per day. That's a pretty tight leash, so something more reasonable might be 3 or 4 points per week limit. This stops us from shoving in and out of the market on impulse with everything we have, as is usually a terrible move in the moment.
Even a flash crash will usually temporarily recover for a short time before crashing again. It's almost always bad to make snap decisions right after sharp movements.
Someone who wants to have more of a dollar cost average strategy would go with 1 point per day, cost average buying or selling 5% at a time per day max, getting forced into long drawn out averages. Probably a good strategy for those who want to gamble less; take less total risk but getting hamstringed when potentially good opportunities arise.
This would allow one to make a big 20% splash in one moment, but the stake would become locked for at least a week after making that play. 4 points per week limit would allow a trader to move less total volume per week than once per day, but at the same time capitalize more on making a big move all at once.
This would allow a trader to control just as much volume as one per day, but allow them to shove 35% around all at once if something crazy happened in the market. Likely not recommended for new traders or those who are prone to making impulsive trades.
What I am ultimately going for here with the Venti Blocks Trading System is to create a more regulated standard for responsible crypto trading. By clumping our bankroll into these 20 blocks and creating trading rules for ourselves in advance, I think we can engage in Swarm Intelligence to make better trades.
What LEO and Hive really need is a Fantasy Bitcoin Trading League that allows anyone to trade fake money on the market (with optional gambling pools of course). By incorporating this trading system into a Fantasy Bitcoin League it will be much easier to figure out what the community as a whole thinks is the best decision.
Rather than having to parse freestyle trading (traders who can enter/exit the market whenever they want for however much they want) I think the information will be much easier to analyze if at least some competitions were organized using Venti limitations such as only being able to move in/out of the market 7 points a week maximum.
By limiting options to these preset rules I think it will be much easier to derive what the Swarm believes is the correct move in that time.
I guess my next post will have to go into more detail of how a Fantasy Bitcoin League should operate. As always, the problem with all these products and services is that they need to be zero friction in order to have immense value. This creates a situation where devs do not have a direct monetary incentive to create the product in the first place (because they aren't skimming off the top). Theoretically, this is why we have the dev fund. However, there are other ways to monetize these things (like ads).
In any case, I think we absolutely need some kind of standardized trading system that promotes responsible and rational moves within this extremely volatile and emotional market. That's what I'm going for here... just a rough draft and is certainly worth some more brainstorming.
