Five Strategies For Long-Term Investing: BTC & Crypto


In this article, I will introduce some investment methods. Not the simple "accumulation plan" ("dollar coast averaging") but its variations.

First thing to do:
- Budget
- How much do I want to invest? For example 65% cash, 35% crypto
- Choice of the asset
- Asset I hope it increases over time (HODL or LONG position)
- Lowering "average load price" (purchase price must be as low as possible)
- Optimization (maximum possible yield)
- Total years of investment
- Amount that I am willing to invest in 1 month

The classic accumulation plan ("dollar coast averaging") does not exploit trends, it involves the investment of a constant sum over time.
1) First month: $ 500
2) Second month: $ 500
3) Third month: $ 500
4) ...
This is certainly a good method but it does not optimize returns.


SECOND METHOD: VALUE AVERAGING
I have to choose the monthly investment: let's assume $ 500. I start for the first month with $ 500 but in the following month?
Every month I have to find myself with an extra $ 500: 500, 1000, 1500, 2000, etc.
Let's assume that after the first month, the crypto I am investing in has made 2x (100% of the investment) I will NOT invest anything because I am already at $ 1000. What if it does 3x? I will have $ 1500 so I will not invest and SELL $ 500.
On the other hand, if the asset has made -50%, I will have only $ 250 and therefore I will have to invest $ 750.
1) First month: $ 500
2) Second month: I check the volatility of my asset. I must have $ 1000 (I will buy, sell or not invest depending on the total I have)
3) Third month: as above. I must have $ 1500 so I buy, sell or don't invest.


THIRD METHOD: DOLLAR COAST AVERAGING IN DOWNTREND
Uptrend: classic dollar coast averaging (I choose a share and invest it every month: $ 500, $ 1000, $ 1500, etc).
⬇️Downtrend: I STOP dollar coast averaging. I set aside $ 500 in the month, then another $ 500 in the following month and so on until the downtrend ends.
⬆️Uptrend: When the downtrend ends, I BUY everything together (if I skipped FOUR months, I will buy $ 500 + $ 500 + $ 500 + $ 500 = $ 2000).


FOURTH METHOD: LIQUIDITY MULTIPLIER
Similar to the second method: I only buy in the uptrend and interrupt during the downtrend (⬇️).
However, for each month of downtrend I will increase by a certain percentage.
Let's assume a four-month downtrend (pause).
When the ⬆️uptrend starts, I will invest: ($ 500) + ($ 500 + 2%) + ($ 500 + 4%) + ($ 500 + 6%).


FIFTH METHOD: INCREASED DOLLAR COAST AVERAGING IN THE LOWS
⬆️Uptrend: for each month of uptrend I can decrease the amount invested. First month: $ 500; second month: (500 $ -2%); third month (500 $ -4%); fourth month (500 $ -8%), etc.
⬇️Downtrend: first month ($ 500); second month ($ 500 + 2%); third month ($ 500 + 4%), fourth month ($ 500 + 8%), etc.


BUT HOW DO I MONITOR THE TREND?
1) Cross EMA (20/50 D). If 20> 50 -> Uptrend; If 20 <50 -> Downtrend
2) Price> EMA (10 M) -> Uptrend; Price <EMA (10M) -> Downtrend
3) Heikin Ashi M (these are gapless candles. I only check the candles: if they are green -> uptrend, if they are red -> downtrend
4) Maximum / minimum

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When my savings plan ends, I can rebalance my portfolio. We assumed: 65% cash and 35% crypto.
If the cryptocurrencies are 25%, I will buy the missing 10% (example). If it's 50%, I'll sell 15%.

 

 

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