Time vs. Money? II.

In part one I discussed pn how to reach a desired balance between the accounts. Now I want to take a look at the balance itself. How to find the ideal balance of funds and how to calculate just that.

-Workinprogress- contents may be wrong in form and content and article will change or be deleted.

target: balance the funds in a way that enables you to react to market movements in the most fast and fruitful way possible.

notes on the procedure:
You will at some point have to extrapolate market data (be it average price or volume or whatever) into the future. The outcome of any formula based on data of this low predictability is no more reliable as the data itself. You have to accept that the market is not and will never be predictable. So in your strategy do not forget to put resting places for your funds in place so you can afford not to do anything or to react to new conditions. Never put yourself in a situation where you are forced to act in a specific way - (That is btw the definition of freedom I use.).
The result of such a formula will be a ratio suggestion of your funds for each exchange.

for the base value constellation there are two plausible ratio states:

1. same ratio for each point on the map (1:1:1:1:....).
2. all at conventional and historically trusted waypoints (eg.: cash-in-hand, property, bank account, physical commodities you hold yourself) and none at all which are in the focus of your trading activity. So you should decide in a general-life masterplan on what you want to keep out of the game anyway and then leave those funds out of the picture. This would leave you with liquid and trusted accounts (bank account, cash-in-hand) and those you want to evaluate. That would be preferred. (eg.: bank:cash:exchange1:exchange2:... would be at 1:0,1:0:0:...).

In transaction (especially sepa - days!) is a way point of it´s own, because it takes funds out of the game for the time they are there.



Ingredients to such a calculation:

• likeliness for a specific constellation for each exchange. 
• ->source: historic exchange data (eg:bitcoincharts, own documentation)
• time and money moving funds costs for re-balance.
• ->source: own documentation, external reports
• risk level of each waypoint / restingpoint.
• ->source: own calculation (see exchange survival estimation article)
• general risk level (technical, security, wtf issues at your own side of the lcd-screen).
• ->source: life experience.

disclaimer:
If you are considering to trade or invest any funds anywhere (not just with those on the list above), I very seriously urge you to do your own research. When it comes to money there is not one person on the internet/in the world you should fully trust. I supply links and sources whenever this seems necessary or appropriate. If you feel something in this article is wrong, missing, or misleading please do not hesitate to contact me.
-this obviously does not apply as long as article is flavoured with "workinprogress" flav.