With a recent post by @spinvest, hidden below the fold, I discovered a new term for something I have been doing and getting better at over the years and cycles - Ratio Trading. I will give credit here, but as a public speaker I respect a lot said once -
The first time I mention something I heard, I always give credit. The second time I don't remember who said it. The third time I am pretty sure it was my idea all along.
So today, somewhat in preparation for the post about our ECOBANK portfolio positioning, I will be walking through the multiple levels of ratio trading that I have observed and taken advantage of.
USD - COP
A while back we converted our ECOBANK USD holdings (in HBD and BUSD) into Colombian Pesos at a rate of between 4800 and 5100 pesos per dollar. The current rate at the time of posting stands at 4186, meaning we might already be 25% up on that move. We are unfortunately not in a position right now to move back into dollars, but I am very happy that we made good moves at the right times. Timing makes a difference - because of the Ratios.
HIVE - USD
This is one level that everyone on HIVE can appreciate and capture - if you sold HIVE above a dollar - or above 2 dollars - you are feeling pretty smart right now. At the time of posting HIVE is hovering around 30 cents.
If you still have your HBD, HIVE's native dollar token, you can buy much more HIVE now and then wait for HIVE to rise again (to rinse and repeat). Ratio trading is not (necessarily) day trading - the most profitable ratios I have found move based on larger time scales than that - weekly, monthly, yearly and even longer.
Check out this headline from November 2021 - where I was already recommending to people to consider locking profits into HBDs.
The tricky thing about ratios - and perhaps trading in general - is that it requires one to be deeply contrarian about almost everything. This is not a mental state that comes naturally to humans, we pretty much like to go along to get along. The harsh way to say this is that we are naturally sheep, and we are swimming with sharks. In the markets, not just crypto, going along to get along means losing money - eventually and every time.
Subtoken - HIVE
Not all subtokens have value - there are an infinite amount of shitcoins out there and Hive-Engine is no exception. So make sure the subtoken you are trading actually has value somehow - at least to you. But with that said...
When HIVE is cheap, subtokens will naturally be more expensive in HIVE terms - exactly how all trading is conducted on the Hive-Engine protocol. When HIVE is expensive - these same tokens will naturally be worth less HIVE, a great time to load up on promising and potentially undervalued projects.
Triple leverage chain
If one is able to grasp the concept, resist the herd and think as a contrarian, get a little lucky with their timing - there is almost infinite leverage available in this chain of trades. Which also means that the inverse can result in a complete and total loss of funds. But in my experience it has been an opportunity of a lifetime to observe these trends and execute on them with patience and diligence.
Let me know in the comments your experience with ratio trading, which subtokens you think have value, and any other comments or questions raised in this post - and surely I will give out my upvote in appreciation.