Testing a DigiByte Cost Averaging Strategy on Niffler - Part 1 - Accumulation

18 Feb, 2019 CryptoSurf

Part 1 - Accumulation

Disclaimer: Nothing contained in this article should be considered as investment or trading advice.

I consider myself a long-term position trader and investor. This means I slowly build positions during the end of bear markets/accumulation phases, while slowly exit positions during the end of bull markets/parabolic phases.

I’m an early adopter of niffler.co and I find it a very useful platform to test my strategies.

Currently, one of the strategies I’m testing on Niffler simply consists in building a position in one cryptocurrency I like, by averaging in slowly and consistently during a period I think is an accumulation phase, in order to minimize risk and maximize return.

My main goals are to show why Cost Averaging might be one of the best strategies when it comes to position trading or investing and to try and outperform most short-term traders in the long run.

I’ve chosen DigiByte (DGB) for this experiment, because I strongly believe it is a solid project with one of the best communities out there, thus a very undervalued cryptocurrency with great potential.

The Strategy:

With my 100,000 Play USD Niffler Portfolio, starting in November 2018, I buy $1000/day of DGB, almost every day. Due to the Daily Liquidity Limit simulation, some days there aren’t enough DGB to buy, so I pass and wait for the next day, but it comes to an average of 5 days/week purchases ($5000/week).

At the time of the writing of this article, I’ve made 69 purchases and accumulated 6,635,516 DGB. My average buy price is about $0.0104 per coin, which is not bad at all in my opinion, considering DGB has a lot of support between the $0.008-$0.01 area, and, in case it goes lower, I have another 31 days to go.

I’ve already proven that the Cost Averaging strategy definitely lowers risks, since if I would’ve invested all my 100K at once in November 2018, I would have been down more than 50% now (DGB’s price was around $0.02 when I started).

My first goal is to try and lower the average even more, hopefully bringing it below the 1 cent mark by the end of the buying phase, so then I basically end up with at least 10M DigiBytes (which would be just awesome!).

Once I've built my entire DGB position, I will be very happy to share my exit strategy with the Niffler community.

Stay tuned for updates in part 2. Cheers!

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Crypto Position Trader & Investor. Love creating and testing long term trading and investing strategies. Only Cryptos I believe in are BTC, LTC and DGB.

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User Avatar Tuna Excellent strategy with a fundamentally strong project! Adopted DGB dollar-cost averaging in real life except not with $1K per purchase.
6 Aug, 2019
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User Avatar CryptoCoffee Well done. Interested to see where this goes!
18 Apr, 2019
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User Avatar CryptoGambino Nice! Great read and looking forward to part 2!
18 Feb, 2019
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User Avatar CryptoSlashy Thanks for a good read @CryptoSurf
18 Feb, 2019