Exercise 4: First Position Setup and Management
⏰ Time Investment: 60-90 minutes (setup) + ongoing monitoring 🎯 Goal: Successfully set up and manage your first LP position
📚 Required Reading Integration 📖 Primary: Lesson 4: Building Your First LP Position 📖 Supporting: Lessons 1-3 (all fundamentals)
🎯 Phase 1: Pre-Deposit Planning (20 minutes)
Position Planning Worksheet
Your Capital:
Total available: $_____
Amount for first position: $_____ (recommended: 1-5% of portfolio)
Reserve for gas: $_____
Pair Selection
Your Chosen Pair: _____ / _____
Selection Rationale:
Why this pair? _________________________________
Volatility level: _____ (Low/Medium/High)
Expected IL: _____%
Risk tolerance match? _____ (Yes/No)
Network Selection
Your Chosen Network: _____
Selection Rationale:
Why this network? _________________________________
Gas costs: $_____ per transaction
Minimum viable position: $_____
Your position is _____ (viable/not viable)
Risk Assessment
Before depositing, calculate:
Expected Fees (monthly):
Pool TVL: $_____
Daily Volume: $_____
Your share: _____%
Daily fees: $_____
Monthly fees: $_____
Expected IL (worst case):
Maximum expected price move: ±_____%
Corresponding IL: _____%
IL in dollars: $_____
Gas Costs (monthly):
Deposit: $_____ (one-time)
Collect fees: $_____ × 4 = $_____ (weekly)
Withdraw: $_____ (when needed)
Monthly total: $_____
Net Return (monthly):
Fees: $_____
IL: -$_____
Gas: -$_____
Net: $_____
Is this profitable? _____ (Yes/No)
📝 Phase 2: Position Setup Checklist (30 minutes)
Pre-Setup Checklist
Setup Process Documentation
Step 1: Token Approval
Token 1 approved: _____ (Yes/No)
Token 2 approved: _____ (Yes/No)
Gas cost: $_____
Step 2: Add Liquidity
Amount Token 1: _____
Amount Token 2: _____
Total value: $_____
Gas cost: $_____
Step 3: Receive LP Tokens
LP tokens received: _____
Pool share: _____%
Transaction hash: _____
Position Details Record
Entry Information:
Date: _____
Pair: _____ / _____
Protocol: _____
Network: _____
Amount Token 1: _____
Amount Token 2: _____
Entry price: _____
Pool share: _____%
LP token amount: _____
📊 Phase 3: Monitoring System Setup (20 minutes)
Tracking Spreadsheet Setup
Create a tracking system with these columns:
Daily Tracking:
Date
Current price
Position value
Fees earned (cumulative)
IL (current)
Net PnL
Weekly Analysis:
Week number
Fees this week
IL this week
Gas costs
Net return
Comparison to holding
Alert Setup
Set alerts for:
Alert thresholds:
IL alert: _____%
Price movement alert: ±_____%
Value drop alert: -_____%
🔄 Phase 4: Management Protocol (20 minutes)
Weekly Review Template
Week _____ Review:
Performance:
Fees earned: $_____
IL: $_____
Gas costs: $_____
Net PnL: $_____
Comparison:
If held tokens: $_____
LP position: $_____
Difference: $_____ (better/worse)
Status Check:
Position in range? _____ (Yes/No)
Fees accumulating? _____ (Yes/No)
Risk limits met? _____ (Yes/No)
Action Items:
Decision Framework
When to Withdraw:
When to Rebalance:
When to Add More:
📈 Phase 5: First Month Tracking (Ongoing)
Month 1 Performance Log
Week 1:
Fees: $_____
IL: $_____
Net: $_____
Week 2:
Fees: $_____
IL: $_____
Net: $_____
Week 3:
Fees: $_____
IL: $_____
Net: $_____
Week 4:
Fees: $_____
IL: $_____
Net: $_____
Month 1 Summary:
Total fees: $_____
Total IL: $_____
Total gas: $_____
Net return: $_____
Return %: _____%
APY: _____% (annualized)
Lessons Learned
What worked well:
What didn't work:
Improvements for next month:
🎯 Success Metrics
Track these metrics:
Your Month 1 Results:
Profitable? _____ (Yes/No)
Viable? _____ (Yes/No)
Safe? _____ (Yes/No)
Disciplined? _____ (Yes/No)
📚 Next Steps
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