Testing a DigiByte Cost Averaging Strategy on Niffler - Part 2 - Exit

You can find part 1 here: Testing a DigiByte Cost Averaging Strategy on Niffler - Part 1 - Accumulation

I’ve recently completed the accumulation phase of my DigiByte DCA Strategy on niffler.co. I’m now fully invested in DGB. I own exactly 9,393,833 DGB, so my average buy price is about $0.0106 (100,000 / 9,393,833 = 0.0106). At the time of writing, My total portfolio is worth about $128,000, so I’m happy to say I’m already up 28%.

Even though I firmly believe that HODLing DigiByte for at least 2-4 years would probably end up making me much more money, I also think that, in general, there is nothing wrong with taking profits and that there is no point in investing and/or trading if you can’t even enjoy at least some of the profits in the short-term, even for long-term traders/investors like myself. 

The kind of exit strategy I’ve chosen is simple: Sell 50% on a double, and buy back on 25% dips.

Here’s a couple of potential scenarios examples:

Ex. 1)

Price reaches $0.0212 (0.0106 x 2). I will then sell 50% of my DGB position, in this case 4,696,916 DGB, which is about $100K. 

Price then retraces 25% from my last sell price (0.0212 - 25% = 0.0159). I buy back in with the $100K earned from my first Sell, and I would then end up with more DGB than the amount I’ve initially sold (100,000 / 0.0159 = 6,289,308).

Ex. 2)

Price reaches $0.0212 (0.0106 x 2). I will then sell 50% of my DGB position, in this case 4,696,916 DGB, which is about $100K. 

Price doubles again from there, reaching $0.0424 (0.0212 x 2). I sell 50% of my DGB position again, in this case about 2,348,458 DGB, which would be about $100K.

The price then retraces 25% from my last sell price (0.0424 - 25% = 0.0318). I buy back in with the $100K earned from my second Sell, and I would then end up with more DGB than the amount I’ve sold during the second double up (100,000 / 0.0318 = 3,144,654).

As you can see, I’ve decided not to factor in the average buy/sell price, so I count every Sell/Buy as separate trades, from the second Sell onwards.

What I like about this strategy is that it is completely passive. It is very common for long term traders/investors. With the first Sell, you basically get your money back and from then on you are playing with house money. 

The re-buys during 25% dips are a good addition, since you basically end up with more free coins down the line.

Personally, I’m actually implementing the same strategy with my real portfolio. The only 2 differences are that I don’t own as many DigiBytes (wish I had 9M+ DGB!) and that I trade against BTC instead of USD, since my goal is also to earn more BTC. However, principles are exactly the same.

Another way to do this is to HODL until price reaches DigiByte’s previous ATM ($0.14) and then start the “Sell 50% on a Double” strategy from there, since most of the gains happen during the last portion of the bull market, where there is no resistance. It is obviously more of a long-term approach, but would also make you much more gains. 

That being said, I gotta say, I really like the new Rewards feature on Niffler.co, and I could consider claiming some rewards every once in a while. So please bare with me if numbers won’t add up in the long run. The examples written above are just some possible scenarios, and I could end up with less Play Dollars then I should, if and when I decide to claim some rewards.

Looking forward to my first 2x! Happy trading to all! 

Cheers,

CryptoSurf