The price of BTC reached a buy signal today. With my core number at $2000, my position dropped to $1920. But I was only able to catch it at $1925. I purchased 0.0012 eBTC to bring my nominal position back up to $2000. I didn't quite catch the 4% drop, but close enough.
Now, all I do is wait. According to 
On the other hand, if the market continues to chop the way it has, I could very well end up buying and selling the same range multiple times and squeezing out marginal wins along the way.
And there's also the possibility we will see a sustained pump in the coming weeks.
We don't know. We can't rely on technical analysis or macro analysis. It's better to have a system like core number compounding that only uses the present value to signal buys and sells. Even so, I took some time to re-evaluate core number compounding.
After consulting Gemini, I discovered that Core Number Compounding, a name that originates from a YouTube trader, The Oracle, is also known as Constant Value Rebalancing. This can be used by grid trading bots. Essentially, I could set up a similar system with a grid trading bot, except that Ether.fi does not have trading bots. I have to do this manually.
It was always challenging to find content based on Core Number Compounding. By comparison, searching for Constant Value Rebalancing yields more results. I think I'll start using Constant Value Rebalancing.
Then the thought came to me that there is no need for the spread to be asymmetric. Grid bots don't have custom grids, their grids are symmetrically calculated. I think the reason why The Oracle set up 1% upside sells is to capture intraday noise. If your sell trigger has too much of a percentage, you lose those small gains. Another reason I think The Oracle uses the 1% sell trigger is that he uses margin, which amplifies his gains.
In my case, I don't have margin and I can't sit at the computer all day to capture every 1% gain. This is partially why I changed my trigger to 2%, raising the spread from 5% to 6%.
What I could do to make things symmetrical is to set the buy and sell triggers at 3% up and down, preserving that 6% spread. Or, I could revert to the 5% spread with 2.5% triggers. On $2000, that's $50 up and $50 down. That's easy enough maths. Buy at $1950 and sell at $2050.
In some ways it's mathematically the same, except it isn't. The way The Oracle does it, he's using Constant Value Rebalancing combined with scalping. You're more likely to see 1% moves than to see 2.5% moves. Therefore, there are more opportunities to lock in 1% gains. In that regard, I see why The Oracle made the triggers asymmetric at 4% down and 1% up. It captures more upward volatility.
I'm going to revert to the priority I decided in previous posts, building credit. I don't necessarily have to capture minor volatility. Thinking about it, having an asymmetric buy and sell range provides a sense of accomplishment from selling every 1-2% bump. Technically, that does increase my collateral, thereby increasing credit. But the reality is that the increments are small, although more frequent.
Sliding the range up to be symmetric, it means fewer sell triggers and more frequent buy triggers compared to the asymmetric setup. But the overall effect is neutral as it is the same range. While going from 1% to 2.5% sells means fewer sells, it also means harvesting a larger nominal value. On the down side, it also means buys aren't as large, which is more bankroll friendly.
Therefore, I'm sliding up the buy/sell range so that it is equally 2.5% from the $2000 baseline rather than 4% down/1% up. Although it is less exciting in practice, the net effect should come out the same.
#bitcoin #trading #crypto #btc #grid-trading #constant-value-rebalancing #strategy #defi
