Book:
Play Book.
Chapter 4 - Episode 3
Part (1/3)
The price of asset (A) is 1 dollar, Asset (A) has a total supply of 1 Billion, We want to accumulate the 1 Billion, at least 80% of it,
we also want to make a lot of money while doing so, 80% of asset (A) @ current level will cost us around 800,000,000
but the problem is, we only got = 200,000,000$, if we went on buying with the 200m, the asset price will sharply increase, and no profit will be made here.
What to do?
Instructions:
Phase 1: "Consolidation"
We start "gradually, steadily and slowly" buying the asset, we buy it from retailers/weak hands/impatient people who are selling at its current price of 1$, this is a phase we (Smart Money) call "Consolidation", we buy and buy and buy at the price range of 0.90-1.10 $ per (A).
Retailers will see:
- Volume increase
- price of (A) gradually increasing over time.
Money spent by us: 50M
Money left on hand: 150M
Phase 2: "Stiring the pot"
After a period of time (a Day, week, sometimes a months) we decide it's enough, we start putting slightly bigger orders, driving price up in a short period (hours), this had stirred interest in the asset.
Phase3:
Now (A) had reached 1.25$, but if we continue buying it at this price, we will drain our bags quickly, and we just can't buy the whole market by ourselves, and so we move to phase (4).
Phase4: "Panic"
By selling a portion of our bags (7-8%) we shall achieve two things, 1) cause disturbance in the price by around 5-10% drop at least.
2) Gains: We now have sold 8% of our 50 Mil purchased (A) at a price of 1.25$ making 0.25$ profit.
Phase5: "Weak hands"
Weak hands will start doubting themselves, imagining themselves cleaning dishes, worrying about how they going to pay their loans that they took to risk in crypto, thus, they will sell accepting some loss to their money, their selling is fueling the panic we need to cause the price to drop sharply to around the same area it started, the 1$.
-To be continued-
Author:
Smart Money 👽
