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Trading 101

Trading 101: 7 Trading Mistakes to Stop Making Right Now

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There are a lot of beginner mistakes when it comes to trading and investing. Almost everyone makes them, and for some it takes years to learn the lesson (those that are not serious about the game sometimes never learn it). If you are a beginning trader yourself, learning these lessons can potentially save you a lot of money and frustration on your journey to becoming a profitable trader.

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1. Trying to catch a falling knife 

Don’t buy something just because it has fallen a lot. You need to wait for confirmation from the market that the trend has changed. This confirmation should come in the form of price breaking through a moving average, an inverse head & shoulder pattern, or another move in the price that can easily and objectively be identified.

2. Holding on to positions that are annoying you

If have ever made a bad investment, you probably know how easy it is to hold on to your position despite it falling and falling. Your mind is telling you that it’s just about to turn around, and you promise yourself to sell as soon as you are break-even again… You are now on a sure path to getting eaten alive by better traders than you. The only way to deal with this problem is to ask yourself “would I have bought this position again now or would I rather spend the money on something else?” If the answer is “no, I would not buy it today,” get rid of your position immediately.

3. Buying on rumors or recommendations from friends 

It’s not difficult to find trading recommendations, we even publish them here on Hacked! Feel free to read them all and treat them as input when you are making your own trading decisions. After all, it’s your money on the line. You never know if the person giving you a recommendation is investing money himself or not. If you are going to follow someone else’s recommendations, you should also know their time frame, stop-loss, target price, and how much of total trading capital should be allocated to the trade.

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4. Being nervous about your trades

If you open positions in the market keep you up at night, you are either trading with too much capital or you are not confident enough in your trade. If the risk is keeping you up, reduce your trading size. If you are not confident about your trade, get rid of it and wait for a better opportunity.

5. Don’t focus on profit & loss

Being overly focused on profit and loss in terms of monetary value is a sure way to set the wrong stop-loss or miss an opportunity to ride a nice trend. Instead, look for levels in the chart such as supply and demand zones and observe the price action in those areas. Personally, I like to tighten my stop-loss when the price approaches such a level. That way, you will be able to continue riding the trend if price shoots through the level, and protect your downside if it doesn’t.

6. Hope is no trading strategy

If you’re telling yourself “I hope this one will skyrocket,” you are gambling, not trading. You would be better off taking a trip to the casino, which at least provides some entertainment value. You have to be able to say, “I expect this to skyrocket because…”

7. Panic is no trading strategy either

This one is more for longer-term investors. Whenever there is panic in the markets, you either need to sell very fast or chances are the market has already bottomed out. If you are a long-term investor, just as a trader, you should have a pre-determined plan for when to sell (or not sell at all) should panic erupt. That way, you know what to do when everyone else is panicking and chances are you will come out a whole lot wealthier than the rest of the crowd.

Featured image from Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Education

Research an ICO (Initial Coin Offering) Like a Pro – Insider Information

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I usually write about Altcoins investing and trading. Right now I wanted to spill the beans on how I research an ICO. If you are not familiar with an ICO, it is a coin offering an altcoin does to raise funds to build the product or to expand their company/reach.

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Instead of doing an IPO as most traditional companies do, a lot of companies are now going ICOs. Why? Many reasons but I would say the top 2 are the fact that millions of dollars are being raised in a short amount of time as investors are trying to be a part of the new altcoin launches in order get in on the ground floor. The second reason is that investors that take part in an ICO do not own actual equity in a company, they are essentially just giving the company money in order to launch their product. In traditional IPOs, investors would actually own a small or large percentage of a company when they invest possibly giving them voting rights as well as actual company ownership.

Now I want to jump right into how I analyze and research an ICO. While some people start with the technology or the idea itself, I have to admit that I start with the ICO token metrics. First, calculate market cap to make sure they are not overvaluing themselves compared to other ICOs or existing altcoins.

Determine the Market Cap of the ICO:

  • Calculate the token price with this formula ETH Current Price/Num Tokens per ETH
  • Now multiply Token Price * Number of Tokens in Circulation (tokens sold in crowdsale + presale)

This is the company market cap roughly if the ICO sells all available tokens during the crowdsale. Take this market cap and compare it to the top 100 altcoins to see how the coin compares. If the market cap equals $30,000,000 then they would need to grow to $90,000,000 in order for you to make 3x your investment. Now go to Coinmarketcap.com and see what companies have the same market cap as this ICO. Ask yourself: Is this ICO as good as the existing altcoin and is it or should it be worth the market cap they are trying to achieve with the ICO launch.

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Now that you have determined that the market cap is good and that the altcoin has the potential to make you 3x – 5x your initial investment it is time to move on.

Read the Whitepaper:

Ask yourself these questions: Is the technology unique? Can this company survive/thrive without doing an ICO? What is the purpose of the token in the company ecosystem? Are they just creating a coin to profit in this ICO craze or does the coin serve an important purpose? How will the coin increase in value, is it based only on hype on exchanges or is it from it being used as a utility in the company? Does this company have competitors that may make this one irrelevant?

Research the Team:

First off, is the legitimate? Do they really exist on Linkedin, etc. You would be surprised how often the team members can be faked. Read the linkedin description to see if the team member is full-time with the ICO and if the ICO is even mentioned at all.

Research the ICO Advisers:

Are the advisers relevant to the ICO or are they just a shiny attention grabber? If you see the same adviser on multiple ICOs then their credibility/value to the ICO diminishes greatly.

Determine Level of Hype:

Don’t underestimate this step. An easy way to get a feel for hype and popularity is to google the name of the ICO. See how many mentions are in the google search results. Make sure you use exact matches such as quotes in the google search so that you don’t get results for the word ‘the’ or something generic. How many times are they mentioned on social media? The best way to do this is to go to buzzsumo.com and type in the name of the ICO. This will give you a results list showing content and mentions on Facebook, Linkedin, Twitter, Pinterest and how many times the content pieces were shared. Go to the ICO website and search for the websites, social media and chat programs where they interact. Some of the most popular are Slack Channel, Telegram Chat, Twitter, Bitcointalk.org, Reddit.com.

Check out their existing product and code:

For this step you don’t have to know programming or anything like that. You will just want to go to their Github.com account as this is where they will store the code for their project. You can see how often they update their code and how active they are developing. Also, do some research on their past products if they are an existing business that is just expanding by offering an ICO.

Research similar altcoins:

Go to Coinmarketcap.com and CryptoCompare.com and study similar coin charts. Of course, every company is different but you just want to get a general feel for the potential. Right now ICO investors are leaning towards investing in Protocols and Platforms such as 0x, Kyber and Raiden. Ideas that are needed to propel blockchain and cryptocurrency forward.

Good luck researching ICOs and may you see 3x – 100x returns. CryptoDayTrader, over and out…

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Cryptocurrencies

Make More Profit with Proof of Stake Altcoins – Ultimate Guide

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Here is a list of all coins that are Proof-of-Stake. Some of these coins get very little volume but I wanted this to be an extensive list of all coins that are proof-of-stake. The value of these type coins is that you can buy and hold any amount of the coin and you will get paid interest each year for holding them in an active wallet. The more coins you have, the more you make. Long story short: Buy the altcoin, hold the altcoin, make money from holding it each year.

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“Proof of Stake is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. Unlike Proof-of-Work (PoW) based cryptocurrencies (such as bitcoin), where the algorithm rewards participants who solve complicated cryptographical puzzles in order to validate transactions and create new blocks (i.e. mining), in PoS-based cryptocurrencies the creator of the next block is chosen in a deterministic (pseudo-random) way, and the chance that an account is chosen depends on its wealth (i.e. the stake).”- Wikipedia

I will highlight some of the more profitable and well-known proof of stake coins and include a link to their website. This is meant to be an exhaustive list of all PoS coins as of 2017 and will be updated as new coins get added.

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  • AcesCoin (ACES)
  • AcesCoin (AEC)
  • Aegis (AGS)
  • Aero Coin (AERO)
  • Algo.Land (PLM)
  • Allsafe (ASAFE)
  • Ammo Rewards (AMMO)
  • ArchCoin (ARCH)
  • Ardor (ARDR)
  • Asia Coin (AC)
  • Atmos (ATMS)
  • Avatar Coin (AV)
  • AvonCoin (ACN)
  • BattleCoin (BCX)
  • BattleStake (BSTK)
  • BigUp (BIGUP)
  • BitBay (BAY)
  • BitCurrency (BTCR)
  • BitHIRE (HIRE*)
  • BitLuckCoin (BTLC)
  • BitMoon (BM)
  • BitOKX (BITOK)
  • BitVegan (VEG)
  • BitVolt (VOLT)
  • BitcoinTX (BTX*)
  • BitluckCoin (BTCL)
  • Bitradio (BRO)
  • Bitshares (BTS)
  • Bitz Coin (BITZ)
  • BlackCoin (BLK)
  • Blackstar (BSTAR)
  • BlitzCoin (BLITZ)
  • Boats and Bitches (BNB*)
  • BonesCoin (BON*)
  • CAIx (CAIx)
  • CabbageUnit (CAB)
  • Cardano (ADA)
  • CheckCoin (CXC)
  • Clickcoin (CLICK)
  • CoffeeCoin (CFC)
  • Coin to the Future (BTTF)
  • ColossusCoinXT (COLX)
  • CoolCoin (COOL)
  • CoralPay (CORAL)
  • CraigsCoin (CRAIG)
  • Creatio (XCRE)
  • Crowdwiz (WIZ)
  • Crypti (XCR)
  • CryptoCircuits (CIRC)
  • CryptoJournal (CJC)
  • CryptoPennies (CRPS)
  • Cryptokenz (CYT)
  • CybCSec Coin (XCS)
  • Dash (DASH) – Website: https://www.dash.org/ – Annual Return: Approx 7.5%
  • DeOxyRibose (XNA)
  • Decent (DCT)
  • DeltaCredits (DCRE)
  • Diggits (DIGS)
  • DigiCube (CUBE)
  • Digital Bullion Gold (DBG)
  • Draftcoin (DFT)
  • Dropcoin (DRC)
  • EGOcoin (EGO)
  • Ebitz (EBZ)
  • EbolaShare (EBS)
  • Exclusive Coin (EXCL)
  • Extreme Sportsbook (XSB)
  • FaucetCoin (DROP)
  • FazzCoin (FAZZ)
  • FindCoin (FIND)
  • FlyCoin (FLY)
  • Forever Coin (XFC)
  • FreeCoin (FRE)
  • Fuel2Coin (FC2)
  • FuturePoints (FTP)
  • GAIA Platform (GAIA)
  • GPU Coin (GPU)
  • GameBetCoin (GBT)
  • Global (GLOBE)
  • Global Currency Reserve (GCR)
  • GlowShares (GSX)
  • GorillaBucks (BUCKS*)
  • GrexitCoin (GREXIT)
  • GrowthCoin (GRW)
  • HealthyWorm (WORM)
  • HeelCoin (HEEL)
  • HiCoin (XHI)
  • Horizon (HZ)
  • Iconic (ICON)
  • Incrementum (INC)
  • InvisibleCoin (IVZ)
  • Ionomy (ION)
  • KryptCoin (KTK)
  • LePenCoin (LEPEN)
  • Let it Ride (LIR)
  • Limited Coin (LTD)
  • LuckyBlocks (LUCKY) (LUCKY)
  • Lutetium Coin (LC)
  • MacronCoin (MCRN)
  • MaieutiCoin (MMXIV)
  • MapCoin (MAPC)
  • MasterMint (MM)
  • MintCoin (MINT)
  • Mojocoin (MOJO)
  • MudraCoin (MUDRA)
  • Nas2Coin (NAS2)
  • Nautilus Coin (NAUT)
  • Navcoin (NAV) – Website: http://www.navcoin.org/ – Annual Return: Up to 5%
  • Nebuchadnezzar (NEBU)
  • NEO (NEO) – Formally Antshares, Website: https://neo.org/ – Annual Return: Approx 5.5%
  • NeosCoin (NEOS)
  • NeuCoin (NEU)
  • Neurocoin (NRC)
  • NewInvestCoin (NIC)
  • NoLimitCoin (NLC2)
  • Noocoin (NOO)
  • NuBits (NBT)
  • NuShares (NSR)
  • NukeCoin (NUKE)
  • Obsidian (ODN)
  • OkCash (OK) – Website: https://okcash.org/  – Annual Return: 10%
  • OldSafeCoin (OLDSF)
  • OmiseGo (OMG)
  • Opair (XPO)
  • OptionCoin (OPTION)
  • PSIcoin (PSI)
  • PandaCoin (PND)
  • PayCoin (XPY)
  • Persistent Information Exchange (PIE)
  • Phreak (PHR)
  • PIVX (PIVX) – Website: https://pivx.org/  – Annual Return: Approx 4.8%
  • PokeChain (XPOKE)
  • PostCoin (POST)
  • Power Ledger (POWR) – Website: https://powerledger.io/Annual Return: Not Sure
  • PrimeChain (PRIME)
  • Prizm (PZM)
  • ProCurrency (PROC)
  • Pulse (PULSE)
  • PureVidz (VIDZ)
  • QTUM (QTUM)
  • QoraCoin (QORA)
  • Quantum Resistant Ledger (QRL)
  • RadicalCoin (RADI)
  • Radium (RADS)
  • RadonPay (RDN)
  • Ratio (RATIO)
  • Red Pulse (RPX) – Website: https://coin.red-pulse.com/Annual Return: 5%
  • RenosCoin (RNS)
  • Resumeo Shares (RMS)
  • ReturnCoin (RNC)
  • Ride My Car (RIDE)
  • Rise (RISE)
  • RoyalCoin (ROYAL)
  • RoyalCoin 2.0 (RYCN)
  • Rubies (RBIES)
  • RubyCoin (RBY)
  • SARCoin (SAR)
  • SelenCoin (SEL)
  • ShortyCoin (SHORTY)
  • Signatum (SIGT)
  • SkullBuzz (SKB)
  • Specie (SPX)
  • Spectre (XSPEC)
  • SportsCoin (SPORT)
  • Squall Coin (SQL)
  • Stakecoin (STCN)
  • Stakers (STA*)
  • Stakerush (STHR)
  • SteamPunk (PNK)
  • Steps (STEPS)
  • SterlingCoin (SLG)
  • StorjCoin (SJCX)
  • Stratis (STRAT) – Website: https://stratisplatform.com/ – Annual Return: .5 – 1%
  • Subscriptio (SUB*)
  • TeamUP (TEAM)
  • The Vegan Initiative (XVE)
  • TrashBurn (TBCX)
  • TrickyCoin (TRICK)
  • TrumpCoin (TRUMP)
  • Turron (TUR)
  • UPcoin (XUP)
  • Ubiqoin (UBIQ)
  • Ucoin (U)
  • Ultimate Secure Cash (USC)
  • Universe (UNI)
  • Vcash (XVC)
  • Versa Token (VERSA)
  • Viral Coin (VIRAL)
  • WMCoin (WMC)
  • Wanchain (WAN)
  • WarpCoin (WARP)
  • WayCoin (WAY)
  • WealthCoin (WEALTH)
  • Wexcoin (WEX)
  • Wink (WINK)
  • XDE II (XDE2)
  • YobitVirtualCoin (YOVI)
  • ZeitCoin (ZEIT)
  • Zennies (ZENI)
  • deCLOUDs (DCS)

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trading 101

Trading the News in Cryptocurrencies

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bitcoin news

Cryptocurrency trading shares many similarities with both forex and stock trading. All of these assets can be traded with a range of different trading strategies, using technical analysis, quantitative analysis, and fundamental analysis. In this article, we will focus on fundamental analysis and how you can succeed with cryptocurrency trading by trading the news.

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In the stock market, we all know how news can impact stock prices. This is especially true for penny stocks, where one corporate announcement can make a huge impact on the price. The same goes for forex, which is largely driven by fundamentals in the long terms and technicals in the shorter term.

Cryptocurrencies are ideal for news trading

One can argue that the cryptocurrency space is better suited for news trading than the stock or forex market is. The main reason for this is the lack of institutional traders, including high-frequency traders, in the crypto space. This is a space that is still dominated by retail traders, meaning you stand a much better chance at profiting from news releases by reacting in a quick and smart way.

So, what are some important things we need to consider when trading the news?

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  1. Is the news fresh? You need to evaluate whether the news is actually news or if it is already priced in by the market. Look at how the price moved ahead of the news release? Did the news just confirm an outcome that was already expected by the market, or did it bring new information to the table?
  2. Is the news of importance to the price of the cryptocurrency? Is it likely to impact the price over the long-term or is it a one-time boost?
  3. Is the coin liquid enough to be traded profitably in the short term? How many people are actually following this coin and related news?

Let’s take a look at how this can play out in a real-world scenario:

Phase 1 – The first leg: The news has just been released and the first reaction in the price is already seen. This is your first opportunity to take a position in the market to profit from. If momentum and liquidity is good, you can take your first position here.

Phase 2 – New buyers are joining the party: After the initial euphoria has settled, you will often experience a move in the opposite direction. This is expected, and happens because all the traders who were ready to buy right away already got their orders filled at this point. The market now needs new buyers to join in in order to continue to rise. And more often than not, that is exactly what happens. As the word of the positive news in your crypto asset spreads, more and more traders are joining in, extending the upward move in the price.

Phase 3: The swing trade opportunity: Medium to longer-term traders are now eyeing the opportunity to make money from this asset that is “in play,” instead of the boring stuff they are currently holding on to that is not making them any money. This type of trader is looking for longer-term opportunities in coins that are trending. Once an uptrend has formed, they look to enter as early as possible and ride the trend up.

How long should you hold the trade?

The trend will persist as long as new traders are jumping on this opportunity. Usually, trends act as self-fulfilling prophecies in the way that the longer the trend has lasted, the more people will hear about it and join in on it. When we finally reach a point where the sellers outnumber the new buyers, the trend ends and the cycle may repeat itself in the opposite direction.

One way to develop an estimate of how long the trend is going to last and setting a target price is by using Fibonacci extensions. You can also study previous trends in the asset and see if you can spot any pattern. In all asset classes, crypto included, trends move in waves that tend to repeat themselves.

Personally I prefer to hold on to the trade until the market has given a clear indication that the trend has ended. Usually, I will let this come in the form of price breaking through one of the moving averages, for example the 20 day moving average when trading on the daily timeframe. That way, I don’t have to second-guess when I should get out of the trade, and I also never change this rule once the trade is entered into. It’s not so important what strategy you choose for getting out of the trade, but it is very important that you do have a pre-determined plan for getting out and actually follow through with it.

These strategies work just as well for crypto trading as they do in the stock and forex markets. As the legendary trader Jesse Livermore said more than a hundred years ago:

“The pockets change, the suckers change, the stocks change, but Wall Street never changes, because human nature never changes.”

Featured image from Pixabay.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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