I made some mistakes and especially in August. Let me try to explain…
August saw a price surge across the board, but particularly in TEZOs. At one point on 31st August my crypto wallet was massively expanded and I was feeling quite satisfied.
Then 1st September came and with it a sudden correction. I misread the level of the correction and decided to hodl my way through it. Over the next few days it was like a pestilence swept through and my crypto landscape was devastated. The only thing that was positive was that I was still holding a lot of crypto.
Then the entire market was incredibly sluggish with little or no movement for about six weeks until movement, modest to begin with, began with BitCoin and as it increased in value it began to have a similar effect on other currencies as they too began to increase in value. Just look at Etherem. For a time it looked like BitCoin dragged the whole market upwards again, until yesterday.
My biggest failure was that failed to monetise the August surge and now I have learnt the lesson.
When the market was sluggish I decided to play margins with DAI. I love DAI and after TEZOs it is my second favourite crypto (although that might change in favour of DAI). Everybody knows that with it tied to the USD it is a stablecoin and therefore a stabiliser.
This was my starting point.
When there was little movement in the market I traded with DAI as this requires only mono-directional movement. Perfect margin trading based on two currencies moving in opposite directions, and in doing it this way, the profits might be less dramatic,but the risks are significantly reduced. Once I got started I pretty much did the same thing all the time and often several times a day. The point, because my offset was DAI, is that increases are immediately stabilised and then leveraged into Celsius.
Let me explain how it works:
- Convert 100 DAI to another currency, being careful to pick one that looks like it is about to move (reading the market is still important). If not just hodl in DAI and wait.
- Wait for movement until you can convert back to greater than 100 DAI, even if it means 100.1 DAI
- Repeat the cycle again with 100 DAI
- On Coinbase the ever-accumulating DAI stakes at 2%
So over the space of ten days by doing this I added 20 DAI to my portfolio just by playing the margins. It doesn’t have to be 100 DAI, but I have found it is optimal because conversion costs are low. This doesn’t mean that it is a low percentage, but if you keep your eye on increasing your DAI holdings then it doesn’t really matter. Of course it is easier to calculate your ‘profits’ too so irrelevant of fees if you get 102.5 DAI back you know you are +2.5% in a single trade. I have managed to achieve up to a 4% yield in one transaction by doing this.
This amount of DAI is also low risk so you are not moving a huge amount of currency about and so any downturns have a minimal impact on your portfolio.
Finally, when my additional DAI has built up sufficiently I do a mass dump of the profits into Celsius where it stakes at >10% (the rate is slightly variable and I haven’t checked it today).
I have at least 300 DAI as my base for this part of my strategy. 100 stays and stakes at 2% and the rest as 2 x 100 DAI is used to play the margins. This is in addition to my regular trading activities which are higher risk and looking for upward motion full stop..
The beauty of doing this is that it drags the underlying value of my portfolio up with minimal risks and in addition to monetising the mini-TEZOs surge of 25th November (which I wrote about in my last post) it has dragged my portfolio into profitability and stabilised it too.
Good luck, happy trading and stay safe :)