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The platforms available with the broker.
Are they there for you when you need it the most?
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1. Technical analysis will usually be late. Many times indicators are going to tell you to buy after the large jump happens.If you stick too closely to indicators then it is going to cause you to buy at the top and then take a loss because of it.
2. Use technical analysis as an additional tool. Do not use it on its own because it can be manipulated by social data. Technical analysis is based on numbers. It is not taking into account any “big news” that a company may have. Many times there could be large gains/losses due to social data and your technical analysis may not be accurate because of it. Pay attention to everything and you can be successful.
Basic Technical Analysis
I want to talk about support and resistance lines because they are easy to understand. The support line is the link that is drawn at the low point of a time frame. If the coin price crosses this line, there is a strong belief that the coin will continue to go down.
On the other hand, there is the resistance line which is at the high points for that time frame. When the coin price crosses above this line, there is strong support saying that the price will continue to rise.
That is a little bit of basic technical analysis. I will be covering more of this in the future including specific indicators that I use when I trade.
here. In that article I talked about how there are many overvalued ICO’s on the market. I talked about how a bubble is forming and how you have to be careful with your money when investing in start-ups. With that being said, not all ICO’s are bad. I am going to go over my top 4 tips to finding the best ICO’s.
Learn About What the Company Plans to Do
We hear a lot of buzzwords in the cryptocurrency community. One of those words is “whitepaper”. The whitepaper is basically an ICO company’s business plan. It will describe the technical aspects of the project and all of the problems that the project plans to solve. Make sure that the company has clear goals. Don’t invest in a company that you do not actually believe in. The best way to think of it is by thinking of yourself as a venture capital investor. Don’t just give your money to anybody. Pick the people with the best ideas and the best team.
Do Research on the Team
When buying ICO’s, you want to find the tech companies that are going to sell out quickly. After doing research, it looks like the best ICO’s are the ones that have team members from other large companies. I think that it makes sense. A good company is going to have a good team behind it. If the team has no experience in the past, it is probably not a good idea to put all of your money into the company. On the other hand, if the top programmers have developed popular applications in the past, they are most likely going to have a better chance at success.
Focus On Long Term Growth
One of the biggest issues I see when people look for good ICO’s is that people look for short term growth. People are more focused on the 50% gain in a day rather than the 5000% gain in a month. ICO’s have a lot of potential if you do your research and pick them out carefully. Pick a company that is going to be sustainable and usable so that you can have a good future with them.
Pay Attention to When the ICO Goes Onto Exchanges
After you pick your ICO, keep yourself in the loop with what the company’s plans are. Many companies have a timeline that show exactly what they plan on doing over the future months. For example, some ICO’s will occur days before the coin is released on exchanges. You are going to notice that the coin is going to be extremely volatile when it hits the exchange. Depending on what your goals are, it might be in your best interest to take the quick gain. You just have to pay attention so that you can sell out if you need to because the price is going to move quickly.
Find A Good FREE Guide
A lot of people are trying to charge for information and we hate seeing that. Learning to trade should not be something that you pay for and for that reason here is a foolproof guide. If somebody is asking for money for training then they most likely have no idea what they are doing and they need the money. We believe that you should be able to learn without jumping through hoops or paying. We teach you everything from buying coins through exchanges to using technical analysis when trading.
Practice Practice Practice
It is probably not a great idea to just jump into the market if you have never invested before. You need to take time to actually learn how to trade. The best way to do this is by messing around with demo or practice system. Here are a few different options:
https://whaleclub.co/ (Be careful with this one, I would not use this exchange for anything but practice)
I would treat these simulators like you are trading real money. The more that you practice, the more that you will learn.
Don’t Listen To Everybody
Whether you listen to me or not, I think that this point is important. You need to find 1 group or community to listen too. It is usually not a good idea to hop around and start trusting everybody’s opinion. Find a few people that you trust and follow their training. You want to become confident and a lot of conflicting ideas can become more scary than anything else.
1. Don’t Invest Money You Can’t Afford To Lose
You are not buying bonds that give you a guaranteed return. The cryptocurrency market is volatile and it contains a lot of risk. If you have to take out a second mortgage on your house in order to buy a coin, DON’T DO IT! Winning in this game comes down to being smart and fighting against the hype.
2. Be Careful With The Coins You Buy
I see so many traders throwing their money around because they think it is invincible. The crazy part about the cryptocurrency industry is that it is full of some of the most intelligent computer scientists out there. This also means that it is full of hackers that want to steal your money. You need to make sure to buy your coins through a reputable exchange and store your coins in a safe wallet. Protecting your coins is vital if you plan on trading.
3. Understand What You Are Buying
Do not buy into a coin that you do not understand. I wrote an article about ICO’s and I talked about how millions of people are buying the hype of these “get rich quick” coins. You should never put your money into something that you do not understand. Although buying into an ICO might have its merits, some ICO’s (like the EOS ICO) do not even give you a coin after you pay. You were basically donating to the tech company. Just be smart and do your research.
4. Buy The Rumor, Sell The News
Once you start becoming a more advanced trader, you are going to learn more about this. You are going to end up losing money because you bought into the hype. Let me give you a secret, you should be buying in when everybody is saying to sell and you should be selling when everyone is saying to buy. Hype causes major crashes. Either buy before the hype even starts, or wait until after the hype to buy at a low point.
5. Never Join Pump and Dump Groups
If you think you are going to become a millionaire overnight, think again. Many people promise crazy returns but all they want is your money. Do not fall into any of these traps. Focus on making steady returns on GOOD currencies. Never trust somebody that claims they are making millions. If they were, they wouldn’t be trying to sell you something.
Without wasting anymore of your time, here are the most popular methods people use when determining the price direction of a coin.
Technical Analysis (TA)
The most popular method is Technical Analysis. Basically glorified chart reading. Within the category of technical analysis, there are a lot of different methods that people use. The most basic method is to find the support, resistance and trend lines. If a coin moves past one of those lines, there is a good chance the trend will continue. For a full tutorial, click here. Currently, we have a technical analysis section on our site, and more specifically we have a RSI and EMA/MACDtutorial as well. (Stay tuned for a full technical analysis course… coming soon!)
There are two main sites that can help you with technical analysis: Coinigy and CryptoCompare. Coinigy is much better, but it’s only free for 30 days and then it’s $15/mo. (which is not bad at all, especially if it’s making you money by then.)
This one is big. Twitter often has an effect on the price of a coin when someone influential tweets something… shocking. For example, at the end of this article, I mentioned the Founder of Litecoin said that China banned all exchanges. Even though no one else could confirm it at the time, it caused Bitcoin to take a pretty substantial hit.
Another example of how you can use twitter to predict a coin’s direction is by following major exchanges. Usually they’ll tweet a few hours/days before they list a coin on their exchange. If the exchange is a big one, it will most likely increase the coins volume pushing it upwards.
Lastly, this one probably has the most effect of the price of a coin. This is great is some conditions and horrible in others. When a coin receives good news, like TenX has a new card issuer, it usually causes a pump in the price of that coin. Shortly after that TenX news was posted, this happened:
News affects the price of coins
On the other hand, when there is bad news, the market usually goes down. For example, when China made all its announcements in September, it caused a major dump in Bitcoin, causing many other Altcoins to fall as well.
Most of the time, a team will have a slack or telegram channel that is open to the community. This is a great place to be if you want to be the first to hear about major developments to the project. Both applications are free to use, so there’s no reason why you shouldn’t join them.
In order to take advantage of these strategies, you need to take action. Make a twitter account if you don’t already have one and follow everyone and everything in the crypto scene. Also make sure you are following crypto news, and the slack/telegram channels of popular coins!
This should be a pretty good start for all those who were uncertain about determining the price of a coin, if you have any questions, ask them in the comment box below and I’ll reply ASAP.