These past few days have been busy, so I haven't traded. Today I checked in and saw the market still sideways with slight movement, but my hold account has been increasing. So I'd like to share a bit of my capital allocation experience.
I split my capital into two parts: 80% goes into my hold account and the remaining 20% into this trading account.
My hold account is used for long-term coin holdings, or alternatively, I use 30% of the volume to place short x1 orders during downtrends if I can't find any coins to hold long-term. Currently, my hold account holds
$CHZ $XPL v and
$SPK . Of this, 70% of the capital is invested in
#CHZ , while the other two coins each receive only 15%. Among these three, only
#CHZ is currently in a bottom accumulation phase, with a monthly timeframe and other larger timeframes looking favorable, giving it a high chance of breaking out of the downtrend and entering an upward wave. The other two coins still have potential for holding, but only their daily and weekly charts are attractive, resulting in a lower probability of an upward wave and a higher chance of a retracement wave. Therefore, I assess these two coins as having higher risk, so I allocate less volume to them. Currently,
#xpl and
#spk did not close their weekly candles in a favorable way, so I will stop-loss part of these two coins first. I'll wait for a retracement wave or for a clear breakdown of the uptrend before cutting the rest.
My trading account holds 20% of the capital, used for day trading to generate living expenses. On days when the market direction is unclear or the risk-reward ratio isn't satisfactory, I refrain from trading. Today, I just stopped out of the previous bottom-fishing positions in my trading account, as the weekly and 3D candles of the top coin and
#BTC didn't close well. To be honest, my trading account doesn't generate as much profit as my hold account, because every time I make a profit, I withdraw that portion separately, leaving the remaining capital for continued trading.
In general, this capital allocation method works well for me. If anyone finds it useful, feel free to refer to it.