Trading Altcoins: A Regular Person's Guide To Strategy

I am not a stockbroker, a hedge fund manager, or a financial advisor. I'm the VP of Sales and Marketing for CloudEngage, a Saas platform that is "the world's most intuitive website personalization ecosystem" to clients like T-Mobile and Dr. Martens. I'm an early adopter of all things tech and like to say I "grew up alongside the internet", first entering the pixel playa in 1996. Over the years I've been a blogger, hosted web series, spoken at conferences, rode the "social media influencer" bandwagon, launched international campaigns that have landed me in CNBC documentaries and in the media, and generally lived, loved, and learned online. I discovered Bitcoin back in 2011 and first invested in late 2012. Sure, over the years I've made a lot of profit... I've made a lot of mistakes though, too. I still make both, but I like to think the ratio has changed incrementally in my favor.

As more "regular people" come to explore cryptocurrency, I am seeing a lot of misinformation being passed around by people who are themselves only getting going so I thought I would put together a master post of some of the things I've learned along the way. Hear me when I say: I am still learning. I don't have a background in trading so I am completely self-taught. What that gives me though is a laypersons perspective and a more clear way of explaining things. I don't have all the answers or any particular magic formula that will "get you rich overnight", and I urge you to stay away from anyone who can make those claims. Please do your own research, make your own decisions, and own your own choices.

This post is not going to teach you basic fundamentals, like how and where to buy Bitcoin. There are plenty of other posts out there offering Crypto 101 guidance, so let's just assume you have enough existing knowledge to already have some Bitcoin, know what an altcoin is, and have chosen an exchange you are comfortable with and know your way around. This post will offer some second-tier tips for an intermediate crypto buff that is ready to dabble in altcoins and start exploring some trading tactics and strategies. If anyone wants a Beginners Guide from me, let me know in the comments and I will make the time. I'm happy to share my choices and reasoning if you're interested.

Okay, here we go!

The cryptocurrency market is always on: 24/7/365. The market doesn't open or close. It can be tempting when you feel like you're on a streak to stay up absurdly late or obsessively check the markets throughout your work day but I promise you, you will not perform well this way. If you're overtired you will make poor decisions and a decimal out of place in crypto can be a typo you will never, ever forget. When I've made the mistake of checking too often at work I've been out of focus and unfamiliar with the market rhythm of the day and impulsively bought or sold when I shouldn't have. So where should you focus your trading, time-wise?

Best Hours To Trade:

5am-9am: US/London markets are most active.
(I've read approximately 70% of trades take place during this window.)
10pm-1am: Syndey/Toyko markets are most active.
12pm-1am: London/Toyko markets are most active.

These times are based on Forex trading, since it is also a 24/7/365 market. Times presented are PST, as that's the time zone where I reside. Adjust accordingly. Some countries are more active on crypto markets than Forex, so always keep an eye on the press regarding advancements and changes in nations such as China and Korea, and put that activity on your radar.

Why is timing important? Volume! Trading volume can be an indicator of momentum, and when weighed against price patterns it can confirm an upward or downward trend. If volume rises along with the coins price, that's a solid sign of buyers chasing the dream. More activity also will bring more price fluctuation... and with it, opportunity.

Not unlike traditional investing: think long, mid, and short-term.

Some coins are meant to HODL and some are a one night stand. For mid to long-term investments that I intend to hold for the long haul, I do a fair amount of research. I watch upcoming ICO's and read their white papers. I research the team online and see if they have a track record in the profession that applies to their contribution to the project. I participate in their Slack and/or Telegram channels, ask questions, and learn from the tire-kicking of others that are doing the same. Other altcoin investments are strictly a money play. There's nothing I need to know about the vision, technology, functionality, or team. All I need to know about these are what the charts are telling me.

Diversify!

Even if you are starting with a small sum, don't put all of your eggs in one basket. If you have $500 to get in the game, invest $100 in 4 altcoins and leave yourself $100 in BTC to throw at a prime opportunity that may arise. This increases your odds at hitting one out of the park and helps to hedge your potential losses.

Know when to hold 'em. Know when to fold 'em.

Know when to walk away. Know when to run. Most altcoins will fail. This is why I research the way I do with any coin I plan to hold for longer than the charts indicate. Sometimes, you have to accept your loss. Always set up stop losses to make sure you will only ever lose an amount you were willing to lose. Take the rest, add it to your stash of BTC awaiting the next opportunity, and don't beat yourself up. Look for a lesson in the way you played it out and fail a little better next time. On the flip side, set up sell orders that make sure you get to keep some profits. Always leave some coin in your bag though, on an automated sell. Things could skyrocket and you'd have missed the ride to the moon.

Charts.

I started researching how to gain insights from the charts, trying to learn as much as possible since late Summer. I've been making progress but am still learning about the different patterns, studies, and tools. I take comfort in knowing that at the end of the day even the charts can't predict the future. If you are looking for a place to start, watch volume and how it plays together with the movement of the prices, read about moving average convergence divergence (MACD), and flags and pennants. This is a great place to start!