Author Topic: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”  (Read 21801 times)

Offline turbooster

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #75 on: January 19, 2015, 09:29:46 PM »
We're writing to announce that the recent decision of the Swiss National Bank and the following market reaction didn't have any influence on our Forex trading strategy.
Any links on that? What's this about?

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #76 on: January 20, 2015, 11:38:34 PM »
We're writing to announce that the recent decision of the Swiss National Bank and the following market reaction didn't have any influence on our Forex trading strategy.
Any links on that? What's this about?

Hi Turbooster,

here's a link pointing to a yahoo article, the comments following the article at forexfactory are quite accurate, so you can see two sides of the story.

http://www.forexfactory.com/news.php?do=news&id=522281

It all boils down to a sudden decision of the Swiss National Bank to drop the peg between CHF and EUR. For approx. 3 years the bank was trying to maintain CHF at a lowish rate against EUR, not allowing the CHF to appreciate as it would normally do in the time of global econimic uncertainty. The SNB was intervening every day for the last 3 years to keep CHF under control, but they decided to stay on hold for a while. This resulted in a massive market reaction, firstly on the Forex market where the Swiss currency strenghtened within seconds against other currencies in CHF crosses such as USDCHF, EURCHF etc. This event had very little or no effect on currency pairs that did not contain CHF. At DSOL-LF we don't trade CHF. The second wave of reaction came from the Swiss stock exchange, with Swiss companies (especially exporters) losing value. At DSOL-LF we obviously don't trade on the Swiss stock exchange :) One more reaction can be said to be what happened to some Forex brokers, especially those who offer high leverage on their trading accounts. We’re long enough in this business to choose top quality brokers, even if this means that the trading costs will be slightly higher. Here’s a recent study done in the aftermath of the SNB’s bomb.

http://www.forexfactory.com/showthread.php?t=521797

Offline turbooster

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #77 on: January 21, 2015, 11:45:16 AM »
Good read! I didn't know that Switzerland tried to keep CHF down, thanks for the info.

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #78 on: January 26, 2015, 02:50:50 PM »
Dear Shareholders,

The long-awaited amendment proposition has arrived. We would like to suggest a change in the way the shares' price is calculated, it will not be a fixed value, but rather a dynamic one. For calculation we take the minimum buyback value and add 10-20% on top of the value (depending on the level of short-term LTC volatility), and this will be the shares' price.

To give an example, if the minimum buyback value is at 0,15 LTC and we choose to add 10%, then the final price will be 0,165 LTC per share. This will be calculated every two or three days depending on how dynamically LTC fluctuates in value, and we’ll try to keep one share's price at a certain value. This way the buyback value will stabilize over time, and the 10-20% addition will result in growing value of the shares.

DSOL-LF LTC is a managed portfolio, thus we offer shares all the time instead of performing an IPO. Stabilizing the price of shares with simultaneous pegging to a certain value is another step in the evolution of DSOL-LF. We understand and absolutely respect the opinion of numerous cryptocurrency proponents that 1 LTC is 1 LTC, but at the same time we care about value.

First calculations were made when LTC was around 8 USD, the fund started somewhere around 5 USD per LTC, now the price is lower than 3 USD per LTC (having bottomed just above 1 USD recently). The shareholders paid 0,1 LTC in the early days and they still paid  0,1 LTC recently, but the value of their shares is now different. One more thing is that we use a minimum buyback value, and this is our main motivator- DSOL-LF is making a promise to re-buy shares at a predetermined level if necessary, and at the same time is selling new shares at a much lower value. This isn't a healthy situation. You see that as shares are now free to trade, their value has gone up, which is a "fair" market valuation. It's reasonable that noone would want to sell their shares at a value lower than the minimum buyback value. The same may apply to DSOL-LF itself. Additionally please notice that if DSOL-LF is sold at 0,165 LTC as put in the example above, the minimum buyback value is set at 0,15 LTC, this leaves an opportunity for individuals to 1) sell shares on the “open” market at a price higher than 0,15 LTC, and 2) buy shares on the “open” market at a price lower than 0,165 LTC.

DSOL-LF is very different from any other fund, so with your input we write our own rules. The existing shares will be exactly the same as those with the dynamic price, the only difference will be the price itself. If we now peg the price to minimum buyback value, then we can stabilize the price (value) and keep it this way in the future, this way shareholders will be certain that if they pay a certain price now, then in the future they will get exactly the same price (value). There are people who are only interested in holding LTC and won't like this sort of calculation, but our task is to protect the value of assets under DSOL-LF's management.

There is one more detail mentioned earlier that we would like point your attention to, namely the fact that the dynamic price will be calculated on the basis of the minimum buyback value with a 10-20% premium added. On the one hand this will protect us from short-term LTC price volatility, on the other hand it will consequently push the price (and the minimum buyback value) higher- increasing the value of shareholders’ holdings. This is a mechanism applied on purpose, to prepare DSOL-LF for the next step (we apologize but it’s too early to share the details).

Please let us know what you think about the suggestet amendments.

Kind regards,
Piotr
 




Offline turbooster

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #79 on: January 26, 2015, 05:44:59 PM »
This is getting a little confusing. Could you please make a brief post that describes in formulas where applicable:
  • How many shares there are in total and what their value is tied to
  • How many shares there are on the market currently
  • How the buyback value is calculated
And regarding the amendment:
  • How the dynamic value is proposed to be calculated
Lengthy explanations should go in another post so we have a condensed post that we can link to that describes only the numbers involved.
You mentioned all the answers before but the condensed information is missing :)
Cheers!

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #80 on: January 28, 2015, 10:18:53 PM »
This is getting a little confusing. Could you please make a brief post that describes in formulas where applicable:
  • How many shares there are in total and what their value is tied to
  • How many shares there are on the market currently
  • How the buyback value is calculated
And regarding the amendment:
  • How the dynamic value is proposed to be calculated
Lengthy explanations should go in another post so we have a condensed post that we can link to that describes only the numbers involved.
You mentioned all the answers before but the condensed information is missing :)
Cheers!

Hi Turbooster,

thank you for the questions, that's a great suggestion (personally I'm a fan of infographics which allow to grasp info quickly). Hopefully the following paragraph will make matters crystal clear :) P.S. I'm glad that you found the CHF info useful. CHF's strenghtening is a hot topic in Poland as around 700,000 people have mortgage denominated in CHF. With the Swiss currency rising in value those individuals need to pay to the bank a lot more PLN (30-40% more than the property's initial value), so if someone had a 300,000 PLN (around 120,000 CHF) mortgage six or seven years ago, now they need to repay around 450,000 PLN (it's still 120,000 CHF). Never apply for a mortgage denominated in a currency different than the one you're earning in. Now, let's go through the fund details.

1. How many shares there are in total and what their value is tied to

The value of shares is backed/assigned to a portion of land valued at 33.000 USD. The land (a building plot) consists of 1023 square meters. At the moment of calculation as per 20.07.2014 with the price of LTC at 8,62 USD, with the price of 1 DSOL-LF share standing at 0,1 LTC (0,862 USD), the total number of shares was calculated according to this formula:

Land value in USD / share value in USD = number of shares

33000 / 0,862 = 38238

With 1023 square meters and 38283 shares each share will be given 0,0267 square meters of the land.

To make matters clear, the value of shares wasn’t tied to anything (simply set to 0,1 LTC), it was instead backed by land in case DSOL-LF goes belly up.

With the drop in LTC value against USD, the number of shares might be updated to match the value of the land (I suggested it earlier, but it was never done).

2. How many shares there are on the market currently

There are exactly 5000 shares outstanding, and 33283 shares still in the possession of DSOL-LF. This number will be eventually updated to match the value of land, and some shares might be moved to a BTC-denominated DSOL-LF fund, as mentioned earlier.

3. How the buyback value is calculated

The minimum buyback value is calculated on the basis of funds under DSOL-LF management and the number of outstanding shares.

MBV = Funds under management  / number of outstanding shares

As you know, our funds are held in USD because of Forex trading, and then the funds’ value is converted to LTC at the price current at the moment of calculation.

And regarding the amendment:

4. How the dynamic value is proposed to be calculated

a) The first variable we need is the LTC price at the time of calculation.

Let us assume that at a point in time the price of 1 LTC is at 2,00 USD, price per share at 0,20 USD.

b) We then calculate the MBV on the basis of LTC price:

FUM = 2000 USD or 1000 LTC
Shares outstanding = 5000
MBV= 0,4 USD or 0,2 LTC

c) Now, depending on how volatile the LTC price is in the recent days, we will add 10-20% to the Minimum Buyback Value to arrive at the dynamic per share price.

e.g. Dynamic per share price = MBV * 110%

This is basically the logic behind the amendment. With Litecoin's intraday or short-term change in value, the minimum buyback value will change, and as a result the dynamic per share price will change.



Kind regards,
Piotr
« Last Edit: February 02, 2015, 03:53:49 PM by thExit »

Offline turbooster

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #81 on: January 28, 2015, 10:59:24 PM »
Hi Turbooster,

thank you for the questions, that's a great suggestion (personally I'm a fan of infographics which allow to grasp info quickly). Hopefully the following paragraph will make matters crystal clear :) P.S. I'm glad that you found the CHF info useful. CHF's strenghtening is a hot topic in Poland as around 700,000 people have mortgage denominated in CHF. With the Swiss currency rising in value those individuals need to pay to the bank a lot more PLN (30-40% more than the property's initial value), so if someone had a 300,000 PLN (around 120,000 CHF) mortgage six or seven years ago, now they need to repay around 450,000 PLN (it's still 120,000 CHF). Never apply for a mortgage denominated in a currency different than the one you're earning in. Now, let's go through the fund details.
Oh wow. This is really tough! Hope this hasn't hit anyone close to you.

Quote
land valued at 33.000 USD. The land (a building plot) consists of 1023 square meters. 20.07.2014 with the price of LTC at 8,62 USD DSOL-LF share standing at 0,1 LTC (0,862 USD), the total number of shares was calculated according to this formula:

Land value in USD / share value in USD = number of shares
33000 / 0,862 = 38238
each share will be given 0,0267 square meters of the land.

To make matters clear, the value of shares wasn’t tied to anything (simply set to 0,1 LTC), it was instead backed by land in case DSOL-LF goes belly up.

With the drop in LTC value against USD, the number of shares might be updated to match the value of the land (I suggested it earlier, but it was never done).
This isn't too relevant for now as only a fraction of the shares are on the market.
Quote
The minimum buyback value is calculated on the basis of funds under DSOL-LF management and the number of outstanding shares.

MBV = Funds under management  / number of outstanding shares

As you know, our funds are held in USD because of Forex trading, and then the funds’ value is converted to LTC at the price current at the moment of calculation.

And regarding the amendment:
Let us assume that at a point in time the price of 1 LTC is at 2,00 USD, price per share at 0,20 USD.

depending on how volatile the LTC price is in the recent days, we will add 10-20% to the Minimum Buyback Value to arrive at the dynamic per share price.

e.g. Dynamic per share price = MBV * 10%

Without knowing the FUM the MBV can't be calculated. The FUM are impossible to know from the outside.
Also when "recent days" isn't specified in the amendment this can basically be anything. In the formula MBV * 10% (which should read MBV * 110% I guess) do you want the percentage to be variable and give it a cap of 10 or 20% ? Can this also be -10 or -20%?


I cut your answer down a little to make it more readable. If I have quoted you wrongly anywhere tell me and I'll fix it.

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #82 on: January 29, 2015, 09:24:20 PM »
Hi Turbooster,

thank you for the questions, that's a great suggestion (personally I'm a fan of infographics which allow to grasp info quickly). Hopefully the following paragraph will make matters crystal clear :) P.S. I'm glad that you found the CHF info useful. CHF's strenghtening is a hot topic in Poland as around 700,000 people have mortgage denominated in CHF. With the Swiss currency rising in value those individuals need to pay to the bank a lot more PLN (30-40% more than the property's initial value), so if someone had a 300,000 PLN (around 120,000 CHF) mortgage six or seven years ago, now they need to repay around 450,000 PLN (it's still 120,000 CHF). Never apply for a mortgage denominated in a currency different than the one you're earning in. Now, let's go through the fund details.
Oh wow. This is really tough! Hope this hasn't hit anyone close to you.

Fortunately it hasn't hit affected any of my relatives, but I know people who got into this kind of trouble. If the 700k figure is correct, that's a 1,81% of the Polish citizens, in a room of 50 people that's 0,9 person with a CHF mortgage ;) My family's lucky enough to be free of any mortgage/credits etc. It's something rather rare, and I understood the conveniance of it some years ago as I got interested in finances and was reading Robert Kiyosaki's "Rich Dad,  Poor Dad". The books' a clever read (personally I don't recommend any other books by Kiyosaki), I learnt a lot, but the most amazing fact was that my father was doing all the smart things described in that book starting from the early 90's, investing heavily in stocks, bonds, land and estate. I watched him as a kid and as a youngster, but I understood what he was aiming at only after reading that book- and I was wondering how did he get that knowledge (Kiyosaki wrote his book 10 years later :) ). A lot of cryptocurrency investors should have read that book before jumping in with all of their money... I've got a good story about Napoleon Hill's "Think and grow rich" how I first discovered the book’s content to be true while talking to one of the Polish multimillionaires and then experienced it myself, but I'm already off-topic so I'll leave it for a different occasion :)

land valued at 33.000 USD. The land (a building plot) consists of 1023 square meters. 20.07.2014 with the price of LTC at 8,62 USD DSOL-LF share standing at 0,1 LTC (0,862 USD), the total number of shares was calculated according to this formula:

Land value in USD / share value in USD = number of shares
33000 / 0,862 = 38238
each share will be given 0,0267 square meters of the land.

To make matters clear, the value of shares wasn’t tied to anything (simply set to 0,1 LTC), it was instead backed by land in case DSOL-LF goes belly up.

With the drop in LTC value against USD, the number of shares might be updated to match the value of the land (I suggested it earlier, but it was never done).

This isn't too relevant for now as only a fraction of the shares are on the market.

That's right.

The minimum buyback value is calculated on the basis of funds under DSOL-LF management and the number of outstanding shares.

MBV = Funds under management  / number of outstanding shares

As you know, our funds are held in USD because of Forex trading, and then the funds’ value is converted to LTC at the price current at the moment of calculation.

And regarding the amendment:
Let us assume that at a point in time the price of 1 LTC is at 2,00 USD, price per share at 0,20 USD.

depending on how volatile the LTC price is in the recent days, we will add 10-20% to the Minimum Buyback Value to arrive at the dynamic per share price.

e.g. Dynamic per share price = MBV * 10%

Without knowing the FUM the MBV can't be calculated. The FUM are impossible to know from the outside.
Also when "recent days" isn't specified in the amendment this can basically be anything. In the formula MBV * 10% (which should read MBV * 110% I guess) do you want the percentage to be variable and give it a cap of 10 or 20% ? Can this also be -10 or -20%?


I cut your answer down a little to make it more readable. If I have quoted you wrongly anywhere tell me and I'll fix it.

Turbooster, you’re helping DSOL-LF a lot by asking your questions, I always try to be as thorough as possible, trying to cover aspects from multiple angles (when I was creating DSOL-LF I wanted it to cover all the headaches of a conservative trader/investor), but my perspective is still one-sided, it’s great to have someone who will take up additional issues and inspire a deeper description. Now, the entertaining part.

“Without knowing the FUM the MBV can't be calculated. The FUM are impossible to know from the outside.”

That is true, the precise FUM value cannot be known from the outside. Up to a degree it could be estimated with the use of DSOL-LF trade history from Litecoininvest.com and on the basis of LTC price e.g. from Btc-e. It’s not going to be a precise number, but here’s how one can get a sneak-peak into FUM.

1. Check the last FUM value.
2. Check the trade history at Litecoininvest.com; it’s rather easy to spot trades made between DSOL-LF and shareholders, this will be the bulk (or all) of trades at a certain previously announced dynamic price. Look at every single portion of shares sold from the time of last FUM update, write down the date and time, the amount of shares and their LTC value (or simply the LTC value of that transaction).
3. Use Btc-e.com MetaTrader4 Platform (https://btc-e.com/news/183) to view the historical price of LTC at the date and time corresponding/following what was written down earlier. I try to sell the gathered LTC asap, so it can be assumed that the LTC is gone within 24 hours. Also, I try using local exchanges to get a price better than the one at Btc-e.
4. Calculate the estimated value of each portion of shares and add up all of the numbers to the previous FUM value.

With a bit of work FUM can be estimated in this way, and that’s a starting point for further calculation. All of this calculation might not be that important as DSOL-LF wants to keep the price of one share at e.g. 0,4 USD in the short-term. One of the most basic aims is to stabilize the price.

“Also when "recent days" isn't specified in the amendment this can basically be anything. In the formula MBV * 10% (which should read MBV * 110% I guess) do you want the percentage to be variable and give it a cap of 10 or 20% ? Can this also be -10 or -20%?”

“Recent days” can basically be anything indeed, I might have specified it the way I’m seeing this. I monitor LTC’s price several times a day, constantly monitoring price swings and the level of volatility. “Recent days” would stand for hours in cases of extreme price spikes to 1-3 days. If the volatility is low and the price remains within a narrow range, there will be no reason for a price adjustment.

You’re right about the formula, thank you for pointing to that, I’ll edit my previous post, it should be times 110%. The mentioned percentage might exceed 20% if necessary (in extreme volatility), it might as well be lower than 10% if price action dries up. We may also consider a flat rate here, e.g. 15% at all times, to give some margin for price swings, with more frequent price adjustments (or even having the mechanism automated with the use of a trading bot). Lastly, the rate might be a negative value, so -10 or -20% is perfectly acceptable as it allows the price to remain just.

To give the shareholders some hints on volatility, I will share one of the simplest methods that I use to monitor the markets.

We’ll need the MetaTrader 4 trading platform from Btc-e (here’s the link again https://btc-e.com/news/183).

Now we’ll need three charts of LTC/USD, each will have a different time period. The first one on the left is Daily, the middle one is 4 hour, on the right it’s 1 hour timeframe.

We’ll be using two indicators that are standard MT4 indicators, both of them will be applied to the chart in two different configurations. The first indicator is Bollinger Bands, the second is Average True Range. To skip the configuration details I’ll put a chart template below (a link or instruction how to create it), it’s enough to load the template to have a chart that is exactly the same as mine. If you do it on all of the three charts and you position the charts as I did, you’d be looking at what I’m looking at:



That's it for tonight, tomorrow I'll be showing how I analyze the charts.

XXX XXX

Here's an instruction regarding the MT4 chart template. You can either download it from tinyupload:

http://s000.tinyupload.com/?file_id=72471584186610963618

or you can create it directly on your computer by following these simple steps:

1. Open a Notepad document

2. Copy and past the following content:
<chart>
id=130670393284267117
symbol=GBPUSD
period=60
leftpos=1908
digits=5
scale=4
graph=1
fore=0
grid=0
volume=0
scroll=1
shift=0
ohlc=1
one_click=0
askline=0
days=1
descriptions=0
shift_size=20
fixed_pos=0
window_left=-9
window_top=65
window_right=1153
window_bottom=464
window_type=1
background_color=0
foreground_color=16777215
barup_color=65280
bardown_color=65280
bullcandle_color=0
bearcandle_color=16777215
chartline_color=65280
volumes_color=3329330
grid_color=10061943
askline_color=255
stops_color=255

<window>
height=138
fixed_height=0
<indicator>
name=main
</indicator>
<indicator>
name=Bollinger Bands
period=20
shift=0
deviations=2.000000
apply=0
color=16777215
style=0
weight=1
period_flags=0
show_data=1
</indicator>
<indicator>
name=Bollinger Bands
period=20
shift=0
deviations=1.000000
apply=0
color=7451452
style=0
weight=1
period_flags=0
show_data=1
</indicator>
</window>

<window>
height=46
fixed_height=0
<indicator>
name=Custom Indicator
<expert>
name=ATR
flags=275
window_num=1
<inputs>
InpAtrPeriod=1
</inputs>
</expert>
shift_0=0
draw_0=0
color_0=16748574
style_0=0
weight_0=0
period_flags=0
show_data=1
</indicator>
</window>

<window>
height=35
fixed_height=0
<indicator>
name=Custom Indicator
<expert>
name=ATR
flags=275
window_num=2
<inputs>
InpAtrPeriod=24
</inputs>
</expert>
shift_0=0
draw_0=0
color_0=16748574
style_0=0
weight_0=0
period_flags=0
show_data=1
</indicator>
</window>
</chart>

3. Now all you need to do is to Save as, with an appropriate extension ".tpl" ( .tpl is a MT4 template format), so name the file as for example BB_ATR.tpl or simply BB.tpl

4. From now on the file should be recognized as a MT4 template and you should be able to load chart settings with the use of this template.


Offline floatyfish1

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #83 on: January 31, 2015, 11:28:44 PM »
Glad to see this is still going. I wish I could provide input however I'm not very good at analyzing these financial things in depth.

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #84 on: February 02, 2015, 04:52:04 PM »
Glad to see this is still going. I wish I could provide input however I'm not very good at analyzing these financial things in depth.

Why shouldn't this still be going? :) The shareholders need to understand that this is a long-term project, it is based on long-proven trading principles, methods that worked, work and will continue to work, they won't get you rich overnight though :) A lot of people are still seeking to get-rich-quick in the cryptocurrency environment, probably dreaming of such returns as those experienced by early cryptocurrency adopters. Fortunes were made, but those people forget about money invested and lost with various coin dumps or company crashes. Recently I came across an old friend of mine (now an IT expert, we used to be best friends as youngsters, he taught me tons of computer stuff back in the days when Internet access was still rare and expensive in Poland), it turned out that he was involved with cryptocurrencies, invested a lot of money in new coins and lost it with coin dumps. Now he doesn't want to hear a thing about it, he said that as long as he stays away, he's mental health is fine... That's a great shame and many people experienced similar problems. DSOL-LF is here for those who'd like to avoid such problems. Be smart when investing your money.

Now, I'm going back to creating a description of how I read volatility, I've been busy over the weekend and I couldn't contribute as much time as I needed.

Kind regards,
Piotr

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #85 on: February 08, 2015, 09:58:03 PM »
Our template uses Bollinger Bands (BB) and Average True Range indicators (ATR).  ATR is only supplementary and more for statistics, BBands are our primary focus.

Bollinger Bands are a volatility indicator based on the concept of plotting a set of lines around the price structure to form a kind of envelopes.  Bollinger bands  consist of three bands, the upper, middle and lower band. The middle band is a moving average (usually SMA- simple moving average, it’s calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods and then plotted onto the price graph in form of a line). The moving average is the basis for calculating the upper and the lower bands, which are the standard deviations- the upper band at K times an N-period standard deviation above the moving average (MA + Kσ), a lower band at K times an N-period standard deviation below the moving average (MA − Kσ). The bands will expand and contract as the price action of an issue becomes volatile (expansion) or becomes bound into a tight trading pattern (contraction).

BB settings are: period (20), shift (0),  standard deviation (1) and respectively (20), (0), (2) for the second set of BBands. It’s also convenient to choose a different color for the second set of BBands. We use the same settings for monitoring price action in all of the three timeframes, i.e. Daily, H4 (four-hour) and H1 (one-hour). Usually when choosing the period of the moving average traders try to set it so that approximately 90% of price action is contained within the bands, which makes the move outside the bands a significant occurrence. In our case, the higher the timeframe, the more price action will be contained within the bands.

That’s the theory, tons of explanation can be found online or in Forex/stock trading books. The most important job done by BBands is answering the question whether the prices are high or low on a relative basis. They don’t give absolute buy or sell signals, don’t say that the price is absolutely high or low, they rather provide a perspective, a framework within which price can be related to. DSOL-LF utilizes only a fraction of BBands potential, so our description will not be that thorough (if interested, the best possible reading is the book by Bollinger, “Bollinger on Bollinger Bands” it’s from 2001, I think there were some more recent editions, those are also fine as they were enriched with some additional comments, Bollinger wrote other books, but this one is the most insightful).

We’re using double Bollinger Bands, so our chart will consist of two Bollinger Bands indicators with different settings. Both of them have the period set to (20), the shift set to (0), but the first BB will have the deviation of (1) whereas the second BB will have the deviation set to (2). As a result we get a set of lines surrounding the 20-period simple moving average.



Those lines form the following zones:

-  The Buy Zone between the upper band of BB deviation (1) and upper band of BB deviation (2)

- The Neutral Zone between the upper and lower band of BB deviation (1)

- The Sell Zone between the lower band of BB deviation (1) and lower band of BB deviation (2)



To evaluate whether the market is in a range, trend or in reversal we need to look at the position of the price within the Zones.

The ranging market.
Moving averages  (MAs) of various periods are often used as landmarks for establishing the condition of the market. Traders look for price crossing the moving average, they examine the slope of the moving average, the distance of the price from the MA line. When the price is consolidating around the moving average without making strong upward or downward movements, it is often considered as a ranging market, a directionless one. Also after a period of trending, the price often comes back to the MA line, the median price it sets, before going into another trending phase. In our chart setup such consolidation patterns/ranging periods will most often (but not always) occur within the Neutral Zone, with BBands contracting (forming a narrow envelope, with a narrow distance between the upper and lower bands). For DSOL-LF this is the time when no dynamic price adjustment should occur (unless the price manages to slowly drift away from our tolerance level).



Strong and continuous price change or simply trends of various duration will usually (but not always) begin in the Neutral Zone, with the price breaking out of a narrow BBands channel set by the BB with deviation (1). Such breakouts, if volatile enough, will cause the BBands to expand (increase the distance between the upper and lower bands). Each time the price breaks out of the Neutral Zone and enters Buy/Sell Zone, this will be a warning sign for DSOL-LF to monitor price change. If the price change is relatively appropriate (exceeds the tolerance level) a dynamic price adjustment might be expected.



As long as the price “walks the bands” , i.e. stays in a Buy/Sell Zone (or even surpasses the zone) a trend continuation may be expected, so the price will be closely monitored for further adjustments. It was mentioned earlier that we use three different timeframes, the Daily, H4 and H1. The hourly TF is the most relevant, as it will be the first one to give indications of potential increasing volatility. We’re not using BBands for trading but for warning, so even if the signals turn out to be false, it’s fine. In cases of increased volatility and continuous price change the higher timeframes will show whether there is a probability of the trend continuation.



Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #86 on: February 09, 2015, 08:35:56 PM »
The previous posts have described the proposed mechanisms used for dynamic price calculation and the methods used to monitor LTC price change. If anything needs further clarification, please let us know. We will shortly summarize the content to wrap it up as an actual contract amendment.

Kind regards,
Piotr

Offline floatyfish1

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #87 on: February 16, 2015, 02:33:25 AM »
This is good stuff! Keep up the good work, I'm really liking this.

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #88 on: February 16, 2015, 11:08:05 AM »
This is good stuff! Keep up the good work, I'm really liking this.

Thank you very much, you just made my day, and it's Monday;) Actually I like Mondays because Forex trading starts over again after being closed for the weekend, so after some mental rest, evaluation of the previous trading week and planning for the upcoming week I'm all set to go. It's different with cryptocurrencies as they are traded 24/7, this gives more trading opportunities, although weekends can be really slow- I never took the time to make appropriate statistics, but after following cryptocurrencies for almost  a year now, I'm under the impressions that weekends tend to have more downward price action than the week.

We're just a few steps away from finalizing the amendment, so please stay tuned. It all took a bit more time than planned, but we're ready to rock. In a day or two the amendment will take effect, there will be a dividend payment, we'll also offer a new batch of shares.

Kind regards,
Piotr

Offline thExit

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Re: [ANN][Litecoininvest.com] theSolution Series A “LAND FUND”
« Reply #89 on: February 23, 2015, 08:18:04 PM »
Dear Shareholders,

The following amendment has been added to the DSOL-LF contract at Litecoininvest.com

Amendment #2

CONTENT OF THE AMENDMENT

The aim of this amendment is to change the way the per share price is calculated. It will not be a fixed value, but rather a dynamic one. For calculation we take the minimum buyback value and add 10-20% on top of the value (depending on the level of short-term LTC volatility), and this will be the shares' price.

To give an example, if the minimum buyback value is at 0,15 LTC and we choose to add 10%, then the final price will be 0,165 LTC per share. This will be calculated every two or three days depending on how dynamically LTC fluctuates in value, and we’ll try to keep one share's price at a certain value. This way the buyback value will stabilize over time, and the 10-20% addition will result in growing value of the shares.

CALCULATION FORMULAS

-How the buyback value is calculated

The minimum buyback value is calculated on the basis of funds under DSOL-LF management and the number of outstanding shares.

MBV = Funds under management  / number of outstanding shares

As you know, our funds are held in USD because of Forex trading, and then the funds’ value is converted to LTC at the price current at the moment of calculation.

And regarding the amendment:

-How the dynamic value is proposed to be calculated

a) The first variable we need is the LTC price at the time of calculation.

Let us assume that at a point in time the price of 1 LTC is at 2,00 USD, price per share at 0,20 USD.

b) We then calculate the MBV on the basis of LTC price:

FUM = 2000 USD or 1000 LTC
Shares outstanding = 5000
MBV= 0,4 USD or 0,2 LTC

c) Now, depending on how volatile the LTC price is in the recent days, we will add 10-20% to the Minimum Buyback Value to arrive at the dynamic per share price.

e.g. Dynamic per share price = MBV * 110%

This is basically the logic behind the amendment. With Litecoin's intraday or short-term change in value, the minimum buyback value will change, and as a result the dynamic per share price will change.

REASONING

DSOL-LF LTC is a managed portfolio, thus we offer shares all the time instead of performing an IPO. Stabilizing the price of shares with simultaneous pegging to a certain value is another step in the evolution of DSOL-LF. We understand and absolutely respect the opinion of numerous cryptocurrency proponents that 1 LTC is 1 LTC, but at the same time we care about value.

First calculations were made when LTC was around 8 USD, the fund started somewhere around 5 USD per LTC, now the price is lower than 3 USD per LTC (having bottomed just above 1 USD recently). The shareholders paid 0,1 LTC in the early days and they still paid  0,1 LTC recently, but the value of their shares is now different. One more thing is that we use a minimum buyback value, and this is our main motivator- DSOL-LF is making a promise to re-buy shares at a predetermined level if necessary, and at the same time is selling new shares at a much lower value. This isn't a healthy situation. You see that as shares are now free to trade, their value has gone up, which is a "fair" market valuation. It's reasonable that noone would want to sell their shares at a value lower than the minimum buyback value. The same may apply to DSOL-LF itself. Additionally please notice that if DSOL-LF is sold at 0,165 LTC as put in the example above, the minimum buyback value is set at 0,15 LTC, this leaves an opportunity for individuals to 1) sell shares on the “open” market at a price higher than 0,15 LTC, and 2) buy shares on the “open” market at a price lower than 0,165 LTC.

DSOL-LF is very different from any other fund, so with your input we write our own rules. The existing shares will be exactly the same as those with the dynamic price, the only difference will be the price itself. If we now peg the price to minimum buyback value, then we can stabilize the price (value) and keep it this way in the future, this way shareholders will be certain that if they pay a certain price now, then in the future they will get exactly the same price (value). There are people who are only interested in holding LTC and won't like this sort of calculation, but our task is to protect the value of assets under DSOL-LF's management.

There is one more detail mentioned earlier that we would like point your attention to, namely the fact that the dynamic price will be calculated on the basis of the minimum buyback value with a 10-20% premium added. On the one hand this will protect us from short-term LTC price volatility, on the other hand it will consequently push the price (and the minimum buyback value) higher- increasing the value of shareholders’ holdings. This is a mechanism applied on purpose, to prepare DSOL-LF for the next step (we apologize but it’s too early to share the details).

FURTHER READING

A certain degree of details about how price volatility is monitored can be found in the following posts:

https://litecointalk.org/index.php?topic=21194.msg248799#msg248799

END OF AMENDMENT #2


Tomorrow at 12:00 CET DSOL-LF will start operating according to the amendment. A dividend payment will be issued at that time. From now on, financial updates will be released on a weekly basis, we will also try to shorten the dividend payment period to 2-3 weeks as we've managed to lower Forex trading withdrawal fees. We've had enough time to manually dry-run the dynamic price calculation method, we will also stir into the direction of automating the process of dynamic price calculation and handling on Litecoininvest.com.

Kind regards,
Piotr

DSOL-LF