What really matters in crypto-trading
Every day I am more convinced that analyzing charts has little to do with crypto trading. If you want to succeed at trading crypto you got to be good at one thing and one thing only:
Getting the feel of the Hype and FUD
Crypto markets are very small so they can be moved with only a couple of thousand dollars, so when there is hype prices will go up, professional coin pumpers are experts in hyping, they could well be professional marketers.
Because crypto markets are also unregulated it is very easy to hype a coin, if you were trading stocks there are very strict rules about releasing false information to influence the markets but in crypto-currency you can say and promise whatever comes to your mind and see if it catches on.
The same efforts to hype a coin can be used to FUD it, FUD stands for Fear Uncertainty and Doubt and people who spread it are usually called FUDsters. Although in my experience a fudster can become a hyper in the blink of an eye!
Spreading FUD is easy when the price is going down, you will usually read stuff like “this coin is a scam, the devs have gone, if you don’t sell you will baghold your coins for eternity”. Notice that fudster claim to have no stake at risk but somehow keep coming back to post, so they are very likely buying all the coins you are selling only to become hypers and pump it later on.
Don’t get me wrong, in many cases fudsters are completely right about a coin. The project could very well be a scam and they are sincerely warning others about the risks of investing on it. However most honest fudster will warn you for a week or two and then move on with their lifes, so it’s easy to recognize when a fudster is full of bs.
How to determine when a coin is on HYPE or FUD mode?
So, how do we know when to buy and when to sell? Well, there is no easy way to know this for sure, you have to read their sub-reddits, forums, chat channels and look very closely at what the devs and respected members of the community are writing. But most importantly, you have to take a look at what the community response is.
Much like analyzing the volume of a market, keep an eye for the activity and number of visitors. For example, when Ethereum was hitting 20 bucks, r/ethtrader had 200 or more active online users, today is usually below 100.
In crypto-trading information is everything. Remember that these markets are not regulated so if you can get close to the devs then you know what new features will be implemented and the estimated time-frame of deployment. So join the telegram, slack or rocket.chat private channels and BE PRESENT!.
I once created the Litecoin private Telegram channel and some people thought I was a developer, by creating this channel I get the dev updates before they hit their reddit or litecointalk. I can also read Charlie Lee when he is bored and decides to troll the community, but you have to be able to separete the trolling from the serious stuff.
This is the same with all coins, the smaller the coin the easier it is to gain access. So if you want to make big bucks in Crypto, you better start hitting those forums!
I have published this post on my Medium page
Really good post. TY for this
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thanks, glad you enjoyed it
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