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Opportunity Cost and Double Dip
🕑 Added 2023-09-18 12:39:00 +0000 UTCWhat is Opportunity Cost?
Opportunity Cost is a very basic term even outside of FUT Trading which just means “missing out on other profits while holding a different investment”.
Example: Buying fodder and holding for weeks is a common Opportunity Cost situation. You are missing out on the opportunity to make coins during these weeks while you are waiting for your investments to rise.
If you want to trade and invest the most efficiently, you always aim for the best value in hold time/buy price. If you can wait 2-3 or more days and still get the same price, it’s usually better to wait out.
What is Double Dip?
Double Dip is a bit more complicated to explain, let me show it on a graphic!
Poor drawing of a Double Dip
That's a simplified Double Dip!
If your investment is rising but could potentially go lower than 5% than the current prices, it's smart to sell at the current peak and rebuy during the next dip. This is called Double Dip.
The 5% is very important because that’s your tax on every card on Fut. If the next low point is much bigger than 5%, it's really smart to use this concept!
Example:
Player A buys a card for 50k and it keeps rising until 100k. He keeps it even with the risk of a dip. In the end, he sells that card for 150k and makes 92,5k profit (150k x 0.95 – 50k = 92,5k).
Player B buys a card for 50k and sells it at a peak for 100k. The card dips back down to 91k in the dip and he rebuys it at that price. He later sells it at 150k and makes 96,5k profit ((100k x 0,95 – 50k) + (150k x 0,95 – 91) = 96,5).
As you can see, Player B is using the Double Dip concept and makes 4k (8% higher return) more profit!
This concept also carries some strong positive side effects which help your trading a lot! You are escaping potential panic as you don’t hold as long as other people, you are ahead of other people and can think of potential other trading moves and you even have the coins ready while other people have their coins sit on investments. This concept takes some experience but it’s a strong concept to make a difference in a competitive trading scene.
Identifying a potential Double Dip is probably the toughest part of this concept. As mentioned above, I recommend using this concept in combination with other methods like lazy listing, selling in the hype, or overpriced selling to not only increase your profits but also get the chance to use the double dip.
Use of both ideas
In my opinion, it's important to know both concepts and have these ready if needed. These are key concepts that I think make a huge difference at the right time.
You can also ignore both of these concepts if you know the risk and think it's smarter to follow the risk as long as you make a profit from it! It's not always possible to be online every day and that means missing out on the double dip opportunity or taking a break with calculated opportunity cost.
Summary
- Look out for the best hold time/buy price ratio
- Double Dip works great with other techniques
- Both are great concepts but can be ignored if you are willing to take the risk
