Trading: Coin Research

Up to this point, we’ve gone over what Bitcoin is, how to buy and transact it, and how to buy altcoins on Bittrex. Now, I’m going to tell you all exactly how I trade with success. This process is extremely tedious and I will spread it out throughout multiple posts, so that you have time to process the lessons and practice in between my postings.

The first thing I do every morning after checking all of my balances and charts on coins I already own is try to find the next trade. To do this, I go to CoinMarketCal and sift through all of the upcoming news and events. This is an incredibly valuable tool which organizes events in chronological order and gives you the information that you need. The community can then vote on the events to validate that the event is actually happening. They do this to keep the website credible. When I’m looking for events, I’m typically looking for catalysts that are going to occur at least 7 days from now. Most coins that have a major event within the next week will have already increased in price because of the expectation of something big happening. So to get ahead of the game, I look for events that are further out in the future.

Some good examples of catalysts are:

  • Coin reward halving
  • Service launching
  • App launching
  • Partnership announcement
  • Exchange announcement

The key is finding something that will get people excited about the coin. Once you think that you’ve found something good, the next step is to analyze the team, the project, and the technology. This can be challenging, especially if you don’t know that much about crypto. I generally don’t go into that much depth with this, but some basic guidelines for me are:

  • Professional and easy-to-navigate website
  • Developer team is not anonymous
  • The project aims to solve an actual problem
  • The community is active in their chat room (slack or telegram)
  • The total supply of the coin is relatively low (under 100million is preferable)

Obviously not every one of these conditions need to be met for me to make a trade, but they are each positive properties that you should be looking for.

 

That is going to wrap up part 1 of my trading strategy. If you are following along in real time, I would recommend starting a trading journal and looking for coins that fit the criteria that I’ve already outlined and narrowing it down as more lessons are published. Also, if you are planning on actively trading and haven’t done so already, you’ll want to get a free account at TradingView and a free trial with Coinigy. You’ll also want to make sure that you have exchange accounts set up with Cryptopia, Bittrex, and Binance. Store your account information securely on a flash drive AND a piece of paper. I store all of my passwords in a locked fire safe as a last resort if for some reason I lose my electronic records of them. You will want to also enable 2 Factor Authentication for your exchange accounts, so that even if your account is compromised, it will be very difficult for anybody to access your account without possessing your phone. It is important that you have all of these accounts set up and organized before we begin actually conducting trades every day.

In the next post, I’ll be moving on to charts. Once I find a coin that has an upcoming event, I do some basic technical analysis on the coin and determine if it is worth a buy. I will show you what indicators I use and how exactly I start drawing a chart.