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Top 3 Ways to Crush Day Trading and Swing Trading Altcoins

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*Disclaimer – I am not a financial advisor. Invest and trade at your own risk. The following is my opinion.

Crypto Day Trading and Swing Trading can be extremely profitable and there are certain things to look for in order to succeed.

As Sir Francis Bacon said, “Knowledge itself is power”. I wanted to talk about 3 things that will prepare you to take advantage of this incredible new gold rush opportunity. If you missed out on the gold rush and dot com boom now is your chance to get in early to make incredible gains in cryptocurrencies.

As a start of this series I wanted to first talk about information gathering, basic charting and some day/swing trading basics.

Day trading is described as buying and selling a coin with 24 hours. Swing trading can be defined as buying and selling coins over the course 2 – 6 days up to a couple weeks. A few of my trades are executed within minutes. Here are the 3 things I would suggest that will give you an edge in day trading altcoins. Altcoins are any coin that is “alternative to bitcoin” as bitcoin was the first cryptocurrency. Most if not all altcoins are affected by the rise and fall of bitcoin. I want to talk about 3 ways to holistically look at crypto day trading. This will be the beginning of a series on day trading altcoins. Here we go:

1. Research Coins

When researching altcoins it helps to first learn about the coins in general. While you can look at a chart and technically analyze it to make a decision to buy/sell it helps to get more information to maximize your profit. Go to one of the exchanges such as Binance.com or Bittrex.com. These are the exchanges where users can trade altcoins for bitcoin, Ethereum or USDT (which is no to be confused with USD). Go down the list of coins and further read about each one. Here are the most common places to do research on altcoins. Of course, each coin should have a website with a whitepaper that will tell you more about the use of the coin, and the technology backing it as well as the development roadmap the coin is following. Pay attention to this roadmap as it will usually call out specific dates the coin will hit major milestones. These milestones can vary from ‘creating a wallet’, ‘launching product on blockchain mainnet’, etc. The reason to pay attention to these is because it usually affects the price negatively or positively depending on how the community behind the coin interprets the achievement.

When you see a major rise or fall of a coin it means there was some sort of news behind it. Now the trick is to try and get in on the information as early as possibly to be part of the rise or avoid the fall. I know this sounds obvious but a lot of day traders just look at a coin chart and think they can determine where its going based on technical analysis alone. Places to research coins:

  • Bitcointalk.org – A forum where most coins post something called an ANN which just refers to a post where coins make announcements.
  • Steemit.com – This is a slightly newer website which is actually backed by a coin itself and is where a lot of people involved in cryptocurrency research and trading post information. The better the information the more the author is compensated so authors try and provide something of value.
  • Medium.com – This website is where coins do a lot of their PR as well as those lucky individuals that are part of the coin affiliate program post on here as well. The same can be said for Steemit.
  • Reddit.com – While reddit has a lot of information on altcoins this website seems a little more biased. Sometimes this is where people like to go to spread false news, rumors, etc.
  • Cointelegraph.com – You can find general cryptocurrency news related to the cryptocurrency as a whole. The website also helps with general coin analysis.
  • Coinmarketcap.com – This is a great resource that has tons of data on all coins as well as cryptocurrency marketcap, volume and coin exchange information. Coinmarketcap also has a lot of historical coin data to help you analyze coin movement.
  • Cryptocompare.com – This website has “almost” real-time coin data in that the coin prices update every few seconds. This website has very detailed information regarding coins including historical data.
  • CryptoDayTrader.io – This is my website where I give a list of coins and show the percentage a coin has moved up or down in the past 10 minutes in order to determine when the best time to enter a coin during the day. I am also adding more day trading features that will be released in the upcoming weeks.

Tip: Use all the resources above but keep in mind that each website and author have their own agenda and reason behind posting content. Some is based on providing valuable content to readers so that they come back and some may just be trying to pump up or trash a coin. Get research data from as many places as possible and look for commonalities and this will help you discern what is valuable information.

Tip: Find YouTubers that talk about the type coins or cryptocurrency content you are interested in. While there are a lot of biased opinions and people getting paid to endorse certain coins and ICOs you can still accumulate an amazing amount of knowledge from YouTubers as most provide some sort of valuable data in order to gain and retain subscribers. Again, take from the videos nuggets of information that will expand your knowledge but don’t blindly follow advice.

One main concept to understand is that all coins are tied to bitcoin. When bitcoin is up, altcoins are usually down and vice versa. Why? Because a lot of traders invest in altcoins in order to outperform bitcoin as they rise and fall a lot faster, however, bitcoin is where they store their profits (for the most part). Bitcoin is used as a wealth store and is the main source of volume for altcoins. Ethereum is an up and coming trading pair but bitcoin has way more trading volume making it easier to trade larger amounts of cash when using bitcoin as the trading pair along with the altcoin. Traders invest in altcoins and USDT when bitcoin is falling so not only do they get the percentage gains from the altcoin movement but also get to trade back into bitcoin when it is at a lower price and in so doing enhance their gains.

2. Have a Strategy

When looking at an altcoin to trade determine a couple of things beforehand.

– First, determine the best entry or buy price based on your research and try to get in at the lowest point possible for the day. You can do this by looking at a day chart and by comparing the previous day open and close coin cost. While this is not 100% bulletproof you can get a feel for how high or low a coin will fall based on past data. Don’t buy when a coin is at its all-time high unless you are convinced this coin will just continue to skyrocket.
– Don’t get too greedy – In traditional trading day traders would be incredibly happy with 1% – 2% gains in a day or even a week. In altcoins the volatility is so high that it is not uncommon for you to make 30% gains in a week. (This is not saying you will but it is possible). If you see a coin rising a falling between 5% and 15% most days, set a sell to get out around 7 – 10% and don’t try and catch it at the top every time. If you try and catch a coin at the top too often, you will find yourself stuck in a trade that will make you wait longer to sell or never recover.
– Determine your level of risk – In other words, analyze the coin and try and determine its day range on average and try and pick a reasonable sell position if it falls below a certain point. It is just as important to determine and set stop losses as it is to set a sell at the gain you are trying to achieve.

3. Analyze the Charts

If you are going to day trade or swing trade then you have to at least know the basics of chart analysis. You can also use some of the really helpful chart indicators that help you determine the direction of a coin such as MACD (Moving Average Convergence Divergence), EMA (Exponential Moving Average) and a few others. I will go over these in detail in the next post of this day trading series. Of course, no one can predict for sure which way a coin will move but based on technical chart analysis you can make a better-informed decision based on the statistical probability that a coin will move based on the analysis. This along with all the other research will give you a better chance of making a smart decision.

** As part of every post I will give you my picks at the moment to trade. Trade at your own risk as this is not financial advice and I am not a financial advisor. All of my coin picks use BTC as part of the trading pair as it is more volume and easier to trade than using ETH in my opinion.

CryptoDayTrader.io Top Altcoin Picks (for day and swing trading). As I write more about day trading I will go into why I choose certain coins so you can see a little more behind the curtain. I will also do some basic chart analysis:

Top 3 coins of the week

  • Groestlcoin (GRS)
  • 0x (ZRX)
  • EOS (EOS)

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 51 rated postsKent Hamilton - Co-Founder of CryptoDayTrader.io, where we are building Pro Crypto Tools




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Education

The Basics of ICO Investing: A Brief Reminder to Those Who are New to the Game

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The ICO market has been heating up for a little less than a year now, but it truly has turned into a new wave of technology. The amount of wealth being created is insane, and it can be difficult to keep up with the rate of change that is occurring within the industry. It is like the tech boom of the early 2000’s all over again, and this is your chance to mint a lot of money.

Researching ICOs

If you’re looking to put some money into an ICO, the first step is tracking down the right one for you. There are lots of websites devoted to the different ICOs that are currently underway or planned to be soon, but CoinSchedule is my personal favourite right now. You can find out about new ICOs here, and then the hard part begins.

You need to perform your own due diligence to figure out if the ICO is right for you. You can look through forums and Reddit, but gaining an understanding of the fundamentals of the company (team, product, market size) is the only way to avoid losing all your money in the long-run.

Telegram is a great chat platform for connecting with others, and there are a lot of expert level people who are willing to share tons of information about cryptocurrencies and ICOs, so I would recommend you check out that tool.

The Due Dilligence Process

There are a few key insights you need to apply in your investing process. First, the cryptocurrency community is segmented into different use cases, and there likely to be only one successful project for each use case. So before you do any investing in a certain project, it is time to do an analysis of the competitive landscape. You don’t want to be betting against yourself by putting money in multiple projects in the same sector, so it is likely you’ll want to choose only the project you think is most likely to succeed.

To learn more about the project, most companies have Telegram channels where you can observe the community and get and idea of what the developers are like and where the project is heading. In general, Telegram is an invaluable research tool.

Finally, you’ll want to examine the amount of supply the company is keeping to itself. You want the founders to have “skin in the game” still, but you also don’t want them to have such a high proportion of coins on hand that they can gain a profit and then start to de-risk by selling off their holdings.

Going Through with the Purchase

Assuming you’ve finally selected a coin you would like to purchase, it’s time to execute. Most coins are supported by Ethereum, so you’ll need to purchase some Ether and move it to a wallet that will support a variety of coins. Currently, I use MyEtherWallet.

Purchasing the coin is actually much simpler than you would think. All you need to do is get the public address of the ICO and send them the amount of Ether you want to invest. They will send you your tokens when the ICO closes, and you have successfully participated in your first ICO.

Know Your Client (KYC) rules are for keeping track of your identity and following the security regulations of your jurisdiction. In the beginning, it was rare a company would follow them, but now that regulators are cracking down, you will likely have to provide all your identification information in order to participate.

If you do want to sell your tokens at any point, you can use an exchange like Binance that allows trading of a wide variety of tokens.

Watch for Pump n’ Dumps

As long as there have been equity investments, there have been pump n’ dump schemes. Aptly named “shitcoins”, there are numerous projects that ICO without a product or even a hope of developing them. The lack of regulations is making this possible, and this is exactly why you need to do your due diligence.

An often pointed out criticism of ICOs is that no one on the team has built anything yet. There is the feel of a group of people seeing an opportunity and jumping on it because there is a chance of high profits, rather than them being able to contribute a lot to the space. So as you look out for “shitcoins”, you should be especially aware of projects that talk about the amount of money they’ve raised, rather than what they’ve built.

Understanding the Risk

The first thing that everyone should know about ICOs is that they are still unregulated. Where IPOs receive intense regulatory scrutiny, ICOs are mostly self-regulated at the moment. Considering the fact that most of these companies are coming from people with little or no track record, it is imperative you are careful about where you invest your money.

Yes, it is a  good thing that you can now make large asymmetric bets that used to be regulated out of your reach, but research is always the answer. For example, if you have a token for a company that doesn’t have a use case aside from funding the company, it won’t serve as a good store of value. With the implementation of the lightning network, cross-chain atomic swaps will eliminate the need to hold these tokens, and their value will trend to zero. Understanding future shifts like this is the key to a long-lasting investing career.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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How ICOs Changed the Way Companies Are Built

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With cryptocurrencies now becoming a household name, investors are starting to look into plays they can make that are more off the beaten path. The market for initial coin offerings (ICO) offers just that, albeit with a dash of risk that traditional initial public offerings (IPOs) do not offer. 

Restrictions on Venture Capital

If you want to make money in Silicon Valley, you need two things: connections and capital. Connections are required, because a lot of projects end up oversubscribed anyways, and you need an advantage over many of the other investors. It also helps if you can provide aid to the company additional to just giving them your capital (e.g. advising on product, marketing, or hiring). The unspoken rule is that you do usually have to be located in Silicon Valley to do well as a startup investor.

Large amounts of capital are also required for regulatory and convenience reasons. Venture capital is considered to be very risky, and as such, it is generally restricted to be accessible only to accredited investors, who must have either an income greater than $200,000 per year or a net worth greater than $1,000,000.

Additionally, most companies didn’t have the bandwidth to deal with having hundreds or thousands of smaller investors, because of the meetings, due diligence, and paperwork required. It was much easier to take larger investments from a small group of people, and keep things simple.

Democratizing Venture Capital

For both these reasons, the number of people who have benefited from the gains in massive technology startups have been very few. Now, with ICOs the possibility arises that investors may join in on the gains, thus democratizing the gains and spreading them out throughout the country and world.

The ability to make asymmetric bets (wagers where there is a high possible upside, but limited downside) has been restricted for a long-time. Lottery tickets are the closest example of a purchase you can make that could result in a 10,000x return, but with the downside capped at the size of your investment.

In a world where income inequality and wealth distribution is a constant source of conflict, the spreading out of these returns could prove to be increasingly important for making sure it doesn’t get worse.

Structure of an ICO

As Hacked readers are no doubt aware, an ICO generally occurs when a cryptocurrency startup wants to raise money. They either have something they’ve already built, or they have a white paper that outlines their business plan and how much money is needed to create and scale the project.

The ICO is carried out by exchanging fiat currency or other cryptocurrency for the “token” in question. A token is considered equal to equity in the company in this analogy, although most firms contend that the tokens are not securities for regulatory reasons (see: Howie test).

ICOs are popular for both investors and traders, as there is an expectation in an increase of market price after the ICO, as well as high volatility (which traders love). Looking at a website like Coin Schedule, you can see the amount of hype that is floating around ICOs at the moment.

Recent Trends in Fundraising

As ICOs become more popular, many companies are going through similar experiences during the fundraising process. Some companies are asking for such high valuations right off the bat that there is little upside for the investors, and a greater chance they will lose money.

If excessive amounts of money are raised before a product has even been built, there is much greater risk in the project. Additionally, there are fewer investors who have made enough money on a project to justify staying invested during a bear market. Compare this to Bitcoin, where some have owned it since its price was in the single digit range, and you can see the difference.

Projects that are heavily inflated upon ICO’ing are losing out on the longer-term opportunity, unfortunately. Some people forget that the most well-known cryptocurrency of all began using an organic mining process rather than an ICO. Although there is almost no money inflow when this is done, it creates a rabid community of supporters who believe in the product, rather than short-term speculators. This solution would not work for all ICOs, but for some, it might be a viable solution.

More than Just an ICO

The ICO is the most well-known part of the process, but often these projects will require money to get them to that point. This is where the Pre-ICO and Pre Sale come from. The Pre-ICO is similar to the “friends and family” money that any business starts off with. It is what is required to get the project off the ground. Then you have the Pre Sale, which is where larger investors who are going to help build the companies product and profile get to buy tokens at a lower price than the ICO price in exchange from their help.

Finally, and it is very necessary to make this clear, all of these projects carry a ton of inherent risk, and a significant amount of research should be undertaken before any investment is made. Where many of the past IPOs had undergone a massive amount of due diligence and had backers who understood the technology, we are seeing many investors hop on the investing train without fully understanding how everything works.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Understanding the Risks of Mining Bitcoin

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At this point of your journey into the cryptocurrency world, you probably have a strong grasp of the fundamental mechanics of the coin, and maybe understand the basics of “proof-of-work” systems.

Assuming you already have this understanding, you know that the robustness of the network is what secures the entire bitcoin protocol. As such, there is an opportunity for money to be made if you are able to add value to the network, you will be compensated for your time. This is essentially what mining bitcoin is, and it is very possible for you to make a good return on your capital if you go about it intelligently.

Cloud Mining for Lower Risk

Mining has advanced quite a bit since bitcoin’s creation in 2009. It used to be that you could use any PC to mine cryptocurrency. The algorithm is designed to adapt the level of difficulty and work required to be done so that the average block time stays at approximately 10 minutes.

The most important decision you’ll make in terms of bitcoin mining is whether to mine using cloud services, or if you are going to buy your own rig instead. Each method comes with different levels of risk due to the varying risk structures.

Cloud mining has you rent mining hardware from a company or just get a portion of their hashing power. There are many different operators in the field, and it is important you perform some heavy research to figure out what the best investment of your capital is. Cryptocompare has a list of all the different companies you can use and how they have been rated and reviewed recently.

Personal Mining for Higher Potential

When you make the decision to go the personal mining route, you are taking a much bigger risk in terms of upfront investment. There is a significant cost involved, and you are buying some very specialized hardware. The top consideration should be whether you have access to cheap electricity, because without that, you are putting yourself in a terrible position.

Once you choose your hardware, it is all a matter of selecting the type of hardware you are going to use (there are many review sites, and this is outside the scope of this article) and then choosing a mining pool and software provider. Research is your friend, so you would do well to not neglect it.

Determining the Logistics

No matter what route you decide to go, you are going to have to make some decisions that will affect your overall workflow significantly. First, you must select a mining pool, which means you need to adjust for the amount of risk you are willing to take. Mining can be very profitable on your own, or you could go months without making any money at all. Going with a larger group will increase your likelihood of making money, but cap your earnings at a certain point.

There are pools that are set up to allow switching from mining one currency to another, depending on which is the most profitable, but we are going to stick to Bitcoin for the purposes of this article. One common point to watch out for with pools is whether they are paying out before the block properly verified, since that can cost the pools significant amounts of money.

Payout methods are the most relevant factor to consider when assessing mining pools, since they will determine the risk and return of your payments. There are ten or so variations, but it is only necessary to understand the three most common: Prop, PPS, and PPLNS.

Prop (or proportional) mining pools you are paid for the amount of valid shares you contribute to the pool when a block is found. Basically, you would be getting paid an exact amount based on the “work” you submitted. This is the best deal for the miner, but carries risk to the pool operator, since bad shares still get paid here.

PPS (or Pay Per Share) rewards miners for each submitted share. The miner knows the estimated number of shares to get the reward, and takes the risk of paying out per share before the reward is earned. As such, these generally have the highest fees.

Finally, PPLNS (or Pay Per Last N Shares) works like Prop pool, but instead of just rewarding miners for the last block, it rewards based on long-term contribution.

Afterwards, you also need to make sure you trust the wallet the cryptocurrency is being deposited into. The last thing you want is to leave a vulnerability for any of your earnings. This is an often-emphasized point, but you shouldn’t overlook it just because your past solution has worked for the small investments you put in.

Control the Risk

Never forget the fact that nothing is certain in investments, especially with bitcoin. This should steel you against the fact your investment may be lost. The fluctuations in the price of hardware, as well as the continuing increases in computing power, have turned bitcoin mining into somewhat of an arms race.

If you do find yourself feeling too risk averse to put significant funds into mining bitcoin, it might be better for you to just purchase bitcoins directly. This way, you are at least guaranteed to receive cryptocurrency.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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