With Ripples strong move to the mid 2 dollar range I came across a common chat post on Telegram “I had ripple at 20 cents, sold at 70 cents! Now it is above $2 if only I held! Phuck my life!” That was the more dramatic of the many posts/complaints I had been seeing with the big move up on up on this pair, this honestly is a common woulda/shoulda/coulda often heard in cryptocurrency trading rooms across the universe. You won’t ever hear that from me and here is why… I use the CORE 3 approach to trading, that is to say I HODL, TRADE & THROTTLE in 3 parts equally.
The Mechanics of the Core 3 Crypto Portfolio
I will explain the mechanics of this and why it is a powerful approach to growing my crypto holdings and straight up stopping me from making bad choices. You have several different personality types in trading/investing, all of which have their advantages/disadvantages depending on market conditions. No one method will always be the best in the ever-changing crypto landscape. Sometimes HODL, sometimes trade, sometimes go crazy! What if you could counterbalance all of those into one portfolio? Imagine you are 3 different people and all of you share a pot of $1,000 of which you each get 1/3rd off.
The three guys: HODL, TRADE and that crazy Irish guy named THROTTLE
The first guy is called HODL, all HODL does is buy and hold, that is it! now HODL is very conservative, wears grandma sweaters and reads comic books in his bedroom all day. His brother Trade buys the exact same token and amount as HODL, but of course, he is free to trade in and out with that amount on each token. He thinks of himself as a mover and shaker, talks on his phone all day about how smart he is and how he sold tops bought dips. Last comes their crazy friend who is Irish and drinks way too much, can’t be contained and does whatever he feels like with his $. He is great fun at parties, but this guy is phucking nuts! One minute he is all in Vert, next he is all CA$H… Dude needs to join rehab… Having all three of these guys in one house makes for a good sitcom and likely a balanced portfolio that won’t leave you second guessing about what might have been. Below gives you the allocation and details of each.
The Allocation of the Core 3 Crypto Portfolio
- 33% HODL – This guy is boring but consistently boring. He buys a coin and just holds it period, nothing more. The only time he would exit a coin is because he no longer believes in it and wants out. He does not go out much so he has plenty of time to read on what coins are best. He might be boring and reading his comics in his room, all while his brother & friend are out drinking Krystal, partying with hot midget strippers in the VIP room “Well FU he says!” as he holds up Superman volume 1 worth over 300 grand…
- 33% TRADE – This is the brother to HODL, he is the mirror of HODL in his buying of coins, when HODL buys 1 ETH, then TRADE buys 1 ETH, when HODL buys 1 BTC, then trade buys 1 BTC etc etc. He mirrors HODL but he is more crafty and likes to make moves when he thinks prices are overbought or oversold. He is not always right, but he loves to not stand still and spend all day examining his coin collection, instead TRADE wants to get paid with his crypto portfolio holdings. He wants to be a mover and shaker growing his balance when the opportunity arises trade after trade.
- 33% THROTTLE – Guy is the black sheep friend of the two brothers, also the life of the party, well until they have to go pick him up from being passed out in an alleyway at 4 am in the morning, missing clothing and making weird animal noises. He does pretty much whatever he feels, generally after a few shots of tequila and has no conscience or care for tomorrow!
That is CORE 3 and by following the above… Very simply concept and thinking… Easy to follow and understand. This gives you an opening to developing a real portfolio that won’t leave you wishing you did things one way or the other. This crypto portfolio/money management is designed to not get caught in the woulda, shoulda or coulda future you are likely headed into without applying such logic. Trading is not about right or wrong, it is about #s, %s, and possibilities. I will give you a few added rules you can add to your logic and planning that will help you build a solid future for your crypto holdings.
The Trading Rules for the Core 3 Crypto Portfolio
- When you hit 2x profitability from your original stake. Take out 100% of your starting capital. Now stay with me here, that means you started with say $1000 and it is now $3000 or 2x in gains. Why would you do this? After all, you are going to be rich go all in! Because no matter what happens you can’t lose this way. You are working with the markets $ and your risk is now ZERO…
- Diversify your holdings, one thing many do is buy too few coins thinking that the ones they hold are the best! The old Chinese proverb goes like this “Water which is too pure has no fish… ” if you have diversity you have the opportunity along with greater stability. A few big winners can overcome the ones who are stagnating or in the red. One thing I like to do is have a min base of 20 coins at 5% of holdings for each coin as a basic plan or starting point. Remember you can always start another portfolio and allow different ideas %s to proliferate.
- Dollar Cost averaging/Scaling out – One thing you might see in some of my charts is how I scaled out or into a position at different price levels/events. I do this mainly with my technical analysis background to increase my overall profitability, it is the perfect fit for TRADE or THROTTLE, have fun with it!
So that is the basics of CORE 3. To most, this might seem mundane or they know better and have the perfect method of having no plan or method at all. Well, noobs always know best until they don’t. If they really did then I would not hear after a coin has a huge move how they woulda, shoulda or coulda. Allow yourself to build an army by utilizing all the different strengths/abilities of your soldiers. Sun Tzu tells us “Every battle is won or lost before it’s ever fought”. So plan wisely for your future my friends…