Bitcoin Fork Coming Soon and What To Do

Just an update on SegWit2x hard fork of the Bitcoin blockchain. The segwit2x team plans to enable bitcoin's miners to elect to run new software at block 494,784 on the blockchain, a block they expect will occur sometime in November of this year.

What we need to know

As a result of this hard work, a new coin will be created called "Bitcoin Gold". Everybody with bitcoins at the time of the fork will have a chance to gain new "bitcoin gold" coins, we get to keep both coins.

Conditions

In order to end up with both coins we need to have bitcoins in our possession at the time the forks come into effect, that means we must hold the keys, and we have to wait for a new wallet, a software which will enable us to split one bitcoin into two coins, bitcoin and bitcoin gold.

What will be the effect on the value?

There are two opposing opinions as usual, bullish and bearish. Those in a bullish camp point to the last bitcoin fork when bitcoin blockchain was split into bitcoin and bitcoin cash, the price of bitcoin actually went up and a new bitcoin cash added another 10% of value to our portfolio if we had bitcoins at the time.

On the bearish side, this may result in a bitcoin price correcting downwards more than bitcoin gold is adding to our portfolio -- if we see a lot of panic sale that is. If this happens there may be a short-term opportunity to buy the bitcoin at a lower price and get a better deal than buying bitcoin before the fork.

Scaling in and out of positions as trading strategy

I think it would be good to hold some bitcoins through the fork and see what happens. Regardless of the fork outcome, I believe in using cost-averaging approach to enter positions and, when we exit, we sell in increments at profit. This means we scale-in and scale-out of positions rather than being all-in or all-out. This method helps us get a better price as we buy, locks early profit if the price goes our way while leaving some money in the trade for possible further gains.

Psychology

Another important benefit of scaling in-and-out of positions is phycological, this is very important for traders frame of mind. You will find it much less stressful because scaling as a trading strategy prepared us not to get it right every time as far as price timing is concerned. Rather than trying to pick the lowest and the highest price each time, which is impossible, we use scaling to stay in the range, buying in a low range and selling in a high range.

Let me know what's on your mind, happy trading!