Show HN: Bitcoin investing using Dollar Cost Averaging strategy • Hacker News Board

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#41

Post by quantdev » Mon, Aug 28, 2017, 4:45 PM UTC

krrrh wrote: post #30

quantdev wrote: post #27

Earlier quoted context omitted.

You're somewhat missing something. Take the Exchange Gemini: I send USD to Gemini and then I purchase BTC on Gemini and am charged a 0.25% fee on my purchase. So far I haven't paid any transaction mining fees and it's because Gemini isn't actually settling these transactions on the blockhain. Now, if I were to move these coins off Gemini, then I would pay the mining fee of $2. However, I could just wait 5 weeks and o…

Leaving the coins on the exchange for that long requires an exchange-hack-or-failure cost averaging analysis to balance things out.

Fair, but I doubt the probability of the exchange getting hacked in 5 weeks is meaningful. I agree that you should never leave your coins long term on any exchange, just to be clear, but there is a reasonable amount of risk you can take.

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#42

Post by hisabness » Mon, Aug 28, 2017, 4:47 PM UTC

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

what about taxes from selling?

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#43

Post by simo7 » Mon, Aug 28, 2017, 4:48 PM UTC

gtrubetskoy wrote: post #35

The re-balancing system (of which dollar averaging is a variant) is described in the Fortune's Formula book [1] as something that Claude Shannon [2] would demonstrate in his lectures at MIT as a mathematically proven guaranteed winning strategy. At the end of the talk there was a Q and A, and the first question always was "do you yourself use this system", to which he replied "Naw, the commissions alone would kill yo…

Plus the formula is more geared towards diversyfing across different assets.

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#44

Post by hidiegomariani » Mon, Aug 28, 2017, 4:50 PM UTC

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

thanks! It sounds a good use-case for the next experiment

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#45

Post by Poiesis » Mon, Aug 28, 2017, 4:53 PM UTC

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

Am I reading this right? It seems to be advocating “Buy high, sell low”.

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#46

Post by t0mbstone » Mon, Aug 28, 2017, 4:54 PM UTC

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

That makes no sense... It sounds like it directly contradicts the notion of "buy low, sell high"?

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#47

Post by cookingrobot » Mon, Aug 28, 2017, 5:15 PM UTC

fiatjaf wrote: post #32

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

Are you sure? Would you bet your money on that? If yes, then I must say that black swans are just around the corner waiting for you.

I think this strategy would be safe to black swans because it would be invested when it's going up tremendously, and out of the market when it drops tremendously.

But it would lose all it's value if it just swings up and down slightly over time, as it buys high and sells low.

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#48

Post by otp124 » Mon, Aug 28, 2017, 5:15 PM UTC

Poiesis wrote: post #45

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

Am I reading this right? It seems to be advocating “Buy high, sell low”.

This is exactly how I read it. I think the OP flipped the two.. This, and the fact there is zero evidence to back up the claim is enough for us to confidently ignore it and move on.

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#49

Post by ProfTwoFifteen » Mon, Aug 28, 2017, 5:16 PM UTC

hisabness wrote: post #42

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

what about taxes from selling?

You can move the money to Tether (USDT) to avoid to the event that triggers capital gains. However, I hear it is a super sketchy crypto asset, so buyer beware.

Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy

#50

Post by qualitytime » Mon, Aug 28, 2017, 5:16 PM UTC

pdog wrote: post #28

A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…

Author of "possibly the most misguided comment ever read on HN." ?