Boring Disclaimer 🤭: I am not a financial advisor. This post doesn't contain any financial advice even though it looks like such. I do not warrant any predictions or results presented in this post. Financial markets are chaotic systems. Anyone expecting guarantees shouldn’t follow this blog. Links marked with * lead to a webpage with ads. Using them supports my work. If you wish to get to the destination directly just press the * next to the word. ☑️

Investing can be daunting. When we view the price chart everything seems clear, buy low then sell high. Still, novice and intermediate investors tend to do the opposite, buy high then sell low, with devastating consequences. This post outlines an easy strategy for everyone to make the most out of their investments without having to be a genius. No need to stare at screens, nor to consult financial gurus.  🧪

The Strategy 📋

A successful investment strategy isn’t difficult to create. Of course, there is always the option to attend university to study statistics and economics, but often a simple, well-thought-out plan is enough to achieve your goals. Probably all of you know that Bitcoin performed extremely well in the last decade. Historically, Bitcoin has never come back to its lows and always surpassed its highs. The profit potential is unmatched. The 2017 bull-run has seen profits of 11 960 percent. With the right philosophy and tools, it is therefore easy to invest in Bitcoin.

Bitcoin since 2011¹

Let's dive deeper. 

Philosophy For The Mindset

When do I buy or sell? Luckily, a rule of thumb exists to time your investments: 

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. ~ Warren Buffett

Observe the market. Analyze the present emotions. Are Twitter, TV-shows, and newspapers crowded with "experts" who prophesy Bitcoin's doom? This might be a good buying opportunity.  Are friends and family members asking you for investment advice because Bitcoin is performing well? You should probably sell. The markets move opposite to what the masses think. 💭 

Successful investors such as Warren Buffett live by this mindset. They are the smart money who would buy a world-changing project when it is down by 80 percent. Strategic investors see opportunities when masses panic and when weak hands dump all their funds. The question is: Are you the savvy fox or a hunted rabbit?

Requirements For The Plan

For the plan, you only need the aforementioned mindset and two technical indicators. It is that simple and that unspectacular. The indicators are one 104 weekly sma* and one 104 weekly sma times 5 (104 weeks are around two years). Done! 🎉 It will look like this: 

A simple strategy for buying and selling Bitcoin

The price over the red line indicates greed (= decrease position) and price action under the green line indicates fear (= increase position). In the past, this simple strategy worked perfectly and required no effort. The philosophy of Warren Buffett is enough to achieve impressive performance, be fearful when others are greedy and be greedy when others are fearful. ⏪

The free service LookIntoBitcoin* provides a clean chart with these two smas and Bitcoin's complete price history. You don't need to worry about creating your chart and plotting technical indicators correctly.

Profit Since January 2016

There are different ways to implement this strategy. For this post, I have chosen this set of rules:

• Under the green line, buy 1000 dollars worth Bitcoin per month.
• Between the green and red lines buy 200 dollars worth Bitcoin per month.
• Over the red line, sell one-half of all Bitcoins per month.

Since calculating the profit by hand would have been time-intensive, I programmed a simulation with these conditions. You can find the python code on GitHub* and play with it! 🃏The result is astonishing.

You would have invested 18 000 dollars, but your portfolio would have a value of 110 789 dollars. This is a profit of 92 789 dollars or 600 percent. The execution of this strategy doesn’t require any expertise. Another strength is that you don't need to buy or sell the market perfectly. You just need a recurring payment and three simple rules. Amazing!

However, there is room for optimization, especially the third rule can be tremendously improved. With additional components, this strategy can be even more profitable. I invite you to be creative! Personalize this investment-plan and polish it. 

Summary

There is nothing extraterrestrial about investing. With the right mindset and a few technical tools, you can achieve a lot. I hope this easy strategy helps you to make more educated decisions. Don’t forget, for being profitable, you don't need to be an expert! ❇️

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