Scaling in to obtain best asset prices:

We are looking to acquire assets to hold long term as the markets are selling off and the SPX and ES breaking through the 4,000 level while the DXY may test new highs. We do this by scaling in slowly to obtain an attractive weighted average price in selected cryptos. For this to work, you need to be VERY TIGHT in your entries and sizes, and not chase the markets.

One of the assets we are looking to acquire is Algorand (ALGOUSD) which from their website, is “the world’s most decentralized, scalable, and secure blockchain infrastructure, that is capable of powering anything from decentralized finance to generative NFT art, powering future economic models.”

Reminders:

1) Unless you are selling puts, it is more difficult to protect yourself from the downside in cryptos and create a margin of safety by selling DOTM puts on lower strikes for protection.

2) Cryptos are more risky therefore portfolio allocation and trade sizes are of critical importance.

Levels where we are looking to buy.
We are looking make small purchases in the 25 to 50 cent area as it’s a great price range for a long term hold.

If you buy in the 50-69 cent range, it’s a good but not as great.

Anything above 69 cents, you are starting to chase as our min sell target is $1.85

No matter what the SPX ES and DXY do, we are looking to purchase ALGOUSD at levels that have attractive risk to reward ratios, where slow scaling in with a long term hold make sense.

At the low end, if we risk $0.25 to make $1.60 (eg 1.85 – 0.25 = 1.60) or over a 5x return.
At the mid level, we risk $0.50 to make $1.50 a 3x return.

* If you are not willing to scale in small amount of money for a very long time minimum 3-7 years here don’t do this trade.
Hope it helps
Marc