I picked a bad day to start Core Number Compounding. For a description of CNC, my last post gives an explanation. However, you could also look up YouTube videos by Oracle, Know Buddy Matters, BigK Crypto, or a few others. The markets have been in a down trend, which meant that my positions in ADA and BNB were also in a downtrend.
I opened my position at $1.17174 for 852 ADA, which was $998.32 total.
As the price of ADA dropped to around $1.04, I kept topping up my position to stay around the $1,000 range.
I bought 50+37+42 additional ADA on the way down. Total 129 additional.
I sold 26+28+42+38 ADA on the way back up. Total 134 sold on the way up. Last sale price was $1.15526 per ADA.
As you can calculate, I squeezed 5 ADA out of the dip. That's not a lot of money. But, it's house money. I'm still at around $1000 in ADA.
I opened my position at $239.81761 for 4.167 BNB, which was $999.32 total.
The price of BNB dropped to around $216.25. I kept topping up my position to stay around the $1,000 range.
I bought 0.17+0.18 additional BNB on the way down. Total 0.35 additional.
I sold 0.1 BNB on the way back up.
As you can see, I am 0.25 BNB under my starting position. BNB is presently approaching a 0.1 cash out.
My cash reserve started at $1,000 to match the BNB and ADA positions. The activity has brought my reserves down to $954.72, of which I took out $20 to top up my Crypto.com card for lunch money. That leaves me at $934.72 total.
I would have more enthusiasm for Core Number Compounding if I had started on a day that was on an upward trend, obviously. I have learned a couple things here.
First, it is important to have the cash reserve to deal with drawdowns. At one point, I was almost at $800 before recovering. I intend to grow my reserve to a size that allows the purchase of additional $1000 lots of BNB and ADA.
Second, I learned that I need moves up to have a minimum 2% gain and moves down to be 4% or more because Crypto.com has minimums that do not fit 1% moves at $1000. This is another reason why I want to increase my positions to $2000 of ADA and BNB. It would allow more wiggle room on scraping off gains.
For now, this is functioning as a proof of concept. In time and with larger positions, this method could prove to have much better cash yields. Of course, in an upwards market, this could even turn out to be fun.
I do worry about the tax implications. However, it will be less of a worry if I have the cash to pay for the implications.
This does cause me to shift my dollar cost averaging money to buying more BTC for savings in Celsius. I got the seed money for this by borrowing the $3000 against my savings at Celsius. So, I will be saving up more BTC to pay the interest and increase my BTC position. This means that my first goal from CNC is to recover the $3000 to pay off the loan. Then I'll be playing with house money.
The most important lesson, which isn't a new lesson, is that I need more money. I came to realize this lesson when first investing. You need large numbers to make the small gains meaningful. A 1% gain on $1000 is only $10. On the other hand, a 1% gain on $10,000 is $100. Therefore, this project needs to scale up to provide useful, meaningful gains on small market moves.
That's all for now. I just wanted to share my first impressions. I'll post again at the 1 Week mark, the 1 Month mark, and then, perhaps, quarterly. Cheers.
