Compounding Crypto: (The right way!)

So we've all heard if you start with a penny and double your money every day for 1 month, you would be a millionaire, right? Let's have a quick look at that concept shall we?

• Day 1: $0.01
• Day 2: $0.02
• Day 3: $0.04
• Day 4: $0.08
• Day 5: $0.16
• Day 6: $0.32
• Day 7: $0.64
  ...and so on.

If you continue this pattern, indeed in one month, you'll have a total of: $21,474,836.48 (31 Days in Jan.)

Where this idea becomes an illusion is: How in the hell does one DOUBLE their investment (or add 100% of yesterdays total todays total)!!?

I'm sure some really smart wall street guys might have a clue, but for most of us, it's a fairytale.

So what if we looked at some real numbers?

Just a few days ago, I was surfing along and noticed a tweet from some random person that if you only grew your capital by 1% a day, you would be filthy rich. So I began to investigate this. Try it out for yourself: https://www.miniwebtool.com/compound-growth-calculator

Note: I'm not a financial advisor (if it wasn't already obvious). This is for exploration only!

So in Nov, I got into crypto currencies and bought $100 worth of bitcoin. Since then I've been trying to teach myself how to day trade. So far, the only exchange I like (and trust) is GDAX. I'm not going to go into how to set everything up because that's not what this post is about. This is about how a few expensive lessons lead me to this idea.

I made all the rookie mistakes, (even though I was aware of them and told myself I wouldn't). I picked entry and exit points without really having any reason, tried following big money, etc, etc.... Thankfully, I'm a fast learner. ;-)

So, let's apply this idea of compounding to investing in crypto currencies:

I started with a nice round number that I COULD AFFORD TO LOSE. ($100)
My goal was to grow my capital by 6% each day. If you're wondering how that would look for the month of January, check it out:

Meaning without doing more than clicking a few buttons, my money would grow from $100, to $608.81 by the end of Jan. Armed with that knowledge, I figured it was time for some practical application, so I headed over to GDAX and got started.

If my end of day goal is 6%, I can break that up any way I see fit. As in, I can do:

• One 6% move
• Two 3% moves
• Four 1.5% moves
• Six 1% moves

What I learned was that it's stupid easy to pull a 1.5% move in markets as volatile as the crypto space.

So I mapped it out before even making an order:

Another trick that helps this along is that GDAX doesn't charge a fee when you use limit orders. So the rule I follow is always BUY THE DIP. Any dip should just about do. You don't need to make giant gains. You only need the market to move 1.5% in your favor. Easy Pickens for cryptos.

As you can see, I don't have to be the best trader, and I don't have to always snipe the best low or high to get in or out. This is nice because it removes almost all emotions from your trade when you go into it with a plan. I've been on the other side of the fence, and for anyone else who's been there, you already know it's not pretty and can go sideways on you real fast.

REMEMBER: GREED IS YOUR ENEMY!! NEVER RIDE A WAVE. TAKE WHAT YOU SET OUT FOR, DON'T CHANGE YOUR ORDER. HAVE A STRATEGY, AND STICK TO IT!

By making a plan to grow exactly 6% in one day, that's exactly what I managed to do, in basically a sideways market:

With this tiny proof of concept under my belt, I've decided to go in a little deeper, and will be using this exact plan for Jan2018 and on.

I intend to begin with $500 capital, starting 01Jan18. If I just apply the same method with 6% daily compounded growth, by the end of the month, I'll have grown $500 to $3044.05!

If I don't take any out and just continue to compound it, my returns would look something like this:
Jan: $3,044.05
Feb: $15,560.23
Mar: $94,732.25
Apr: $544,093.87
May: $3,312,498.25
Jun: 19,025,304.45

...Seeing how my birthday is in June, I think I'll go ahead and start to take some profits out around then. ;-)

...Remember, this is not financial advice. I'm just a guy who stumbled upon an idea that seems pretty sound when you run the numbers.

If you thought it was too late to get into crypto or investing or trading, you'd be wrong. Even if I miss my goal by HALF, I'm still doing better than I could have ever imaged before this idea. The key is strategy, planning, discipline, and not being greedy. ...Shit, without being greedy (if these numbers actually work out) one can grow $500 to $19M in 6 months!

...And I know what you're thinking...
"So fake!"

...I half way want to agree. It seems fucking impossible. Yet as someone much smarter than me once said, "Numbers never lie."

If there's enough people interested in this, I think I'll make it into a journey and post my outcome everyday.

Thanks for stopping by. Fair winds & following seas, #cryptofam. May the gains be forever in your favor!

P.S. - If you so feel the urge, you can donate here:

• BTC: 1Bg3tpiYSrQgjjW5xDZ5qbrx32DZHhAmbE
• ANT: 0x450a01b81E331341Cb928c0F7AbA06b95Dd31A2A
• REP: 0x450a01b81E331341Cb928c0F7AbA06b95Dd31A2A
• BCH: 1AGseuvTUg5pa5pezuWQMVGpvYMJpevZr3
• DASH: Xc5VqztKmNHBHdZcjaRa359KGQK8sveZ7v
• ETH: 0x450a01b81E331341Cb928c0F7AbA06b95Dd31A2A
• LTC: LUPhUBeAsb7afevCMdsZJQewkct5YTtk3S

NOTE: As to not contaminate my findings, all donations will be kept separate from this experiment.