Buy the rumour, sell the news
This is a classic saying within the trading markets. Whenever there is rumours that something is brewing – for example, the rebranding of Bitquence to Ethos, Power Ledger signing a deal with the Thai government, the listing of a cryptocurrency on a new major exchange market- these are rumours that, if true, will most likely come out over the next few days. So a great time to get involved is when these rumours are not confirmed yet – that is the point where you fill up your bags and, if you are looking for short-term profits, you sell after the news come out.
If you can find ICOs that are great in demand, such as Icon or Power Ledger, these ICOs will normally be sold out and there will be loads of people who wanted to get involved and did not get an opportunity. However, as soon as the cryptocurrency will hit the exchange platforms, these people will still be looking to buy and this is the point where you can flip your ICO tokens on the exchange platform at potentially a higher price than what you paid at ICO stage. Additionally, getting involved at ICO stage can sometimes mean that you will get bonus coins for the same amount of money, depending on how early you get involved. For example, with Power Ledger, if you got involved in the third week of the ICO you would receive a bonus of 15% of your total number of tokens.
Flipping ICOs can be a profitable way of trading, but how do you know which ICO to invest in? There are several criteria that you should be looking for when evaluating an ICO:
- Look at the community – how many people are talking about this crypto; look for the Telegram / Slack / Discord channels and see how the team is getting on, how many people are generating interest; this is likely to maintain hype around coin which will lead to financial support during resistance levels.
- Is the problem that the token is trying to solve unique? Are there any competitors on the market and if yes, how does this ICO compare to the competitors? Do have a unique business plan?
- Available supply and the price per token – a low supply means that the pumps can get really high: it’s easier for a $0.05 coin with a low supply to increase its value 100 times than for a $1.00 coin with the same supply; likewise, it is easier for a $0.50 coin with a low supply to increase its value 10 times than for a $0.50 coin with a high supply;
- Look at the team – are there any high-profile people within the team or within the team of advisors (such as Vitalik for OMG)
Trending currencies on Coinmarketcap
If you go on Coinmarketcap -> Trending -> Gainers and Losers and choose the 24h option, you will see the coins that have seen the highest increase and decrease as a % value during 1 hours. You choose a coin off the list that you think has potential and that has not yet seen a too high increase. Technical analysis should be used at this point to see what the trend is likely to look like short-term (bullish / bearish) and whether it is worth getting involved for a short-term profit. Another important parameter to look at is the volume traded and this should ideally be high, because that means that the coin is getting a lot of interest from traders.
Importantly, always remember that what goes incredibly high up in a short time will most likely come down, so if you choose to ride the wave, make sure you get out before the token drops back close / below its initial value. This is the reason why, as a day trader, you have to be watching the market constantly and you need to make use of specific types of order on the exchange platform, such as STOP LOSS.
Capitalise on a market crash
Whenever there is a global market crash, meaning that both the price of Bitcoin, Ethereum, Litecoin and alt coins go down, this is a good time to invest both for short-term and long-term. An example of this is when Jamie Dimon, the CEO of JP Morgan, came out to discredit Bitcoin and cryptocurrencies, which lead to the whole market going down significantly. However, a couple of days after his statement, the markets recovered.