Excerpt from a YouTube video by Kosta Ouzas explaining a Bitcoin trading strategy that uses a calculated support or "floor" to calibrate DCA (dollar-cost averaging) trades. The speaker emphasizes designing the system to avoid liquidation by predefining how many averaging trades will be made relative to the support level and credits the "power law" property for enabling this risk control.
Bitcoin is so unique that this system really has all these incredible properties that they will not work so well with anything else. And one of these things is this floor, you know, the floor that we use to calibrate all the trades that we are doing right when the bot is dcaing down and is trying to average down the cost of buying the deep. Basically we know how many of these trades we are going to do because we are using the support that we calculate every time as our reference point, you know. And that basically almost guarantees that you will never be liquidated. That is fundamental for this type of trade, you know, because that is a really biggest limitation of any system like this that you could be liquidated. You know, you never can guarantee it because in trading there is never guarantee of anything. But we really, really focus and try to avoid liquidation. That is like a priority number one and the power law allows you to do that and many other systems they don't.
