Putting back the fun in fundamentals!
There are many seemingly uphill battles in the world of trading, but arguably none more pressing than WHAT TO BUY & WHEN TO BUY IT.
Now you could rely on the old faithful “This guy gave me a hot tip….”, I mean that’s never ended badly, right?
OR you could, god forbid, DYOR.
What does that mean? Simply, Do Your Own Research.
Don’t worry this is not school, well actually it kind of is but research these papers correctly, and you could end up with “A” stack of profit instead of just an “A+”
An amazing starting point is….Fundamentals
Where To Start?
There are a couple of things to take into consideration when looking at the fundamentals of investing in Crypto:
1) What is the point? — Literally, what does this asset actually do, believe it or not, a vast majority of traders have not got a clue what the asset is, they may have thousands of dollars invested in it, even. It is not the end of the world but when looking long-term….this does matter.
2) When to invest? — Crypto is shrouded in a veil of “Only Up” mentality, therefore no matter how amazing the world-changing asset you are investing in maybe, everything has a “top” and you really don’t want to be parking your investment there when that top is in.
What else is there to consider?
It is important to identify what kind of length of time you are willing to invest for — if you can only stomach less than 24 hours invested in one asset, then really this style of trading does not apply to you. If you are more mid to long-term — then this will be a perfect style of trading.
Where To Find Information?
For the more studious folks out there — you can literally just head to the assets websites and check out their roadmaps and white papers to see what they are planning and when. Just get it in your diary — although some are more ambitious than others, doing that extra bit of reading to find out whether it is a pipe dream or moonshot is worth it.
It can sometimes be a little like the wild west in Crypto and the bar brawl setting in the saloon is often on Twitter. Although, a quick way to filter all the noise is to find out who the lead developers and CEOs of the projects are and simply follow them. More often than not, they end up getting too excited and letting something slip to tease a release.
Coin Market Calendar gets a special mention as it is dedicated to Cryptocurrency specific updates and releases, all of which are and have to be submitted by the projects themselves. So more often than not, you will hear about the releases here (as a retail trader) first.
Crypto News Sites (CryptoPanic)
There are hundreds of sites out there dedicated to tracking Cryptocurrency fundamentals and news releases — a lot of which will recycle the same content, although it is hard to go wrong with Decrypt, Cointelegraph & CryptoPanic.
Trading Groups (BlockParty Trading)
If you can find a good and reliable trading group, more often than not they will be scouring the news sites and whitepapers for you and may even curate it into a nice little Telegram channel for your leisurely viewing…ahem…BlockParty Trading…ahem.
What To Look For?
Generally, there are some key items and buzzwords you want to be looking out for (This is only a snapshot!):
Main-Net Release/Upgrade- A Main-Net is the end product of a blockchain project which is accessible by the public to use. However, just like a Test-Net, a Main-Net can be altered whenever projects or open-source groups determine that the product requires updates and/or revisions. A successful launch of a Main-Net for any asset is very RARELY a bad thing.
HardFork — A hard fork is when nodes of the newest version of a blockchain no longer accept the older version(s) of the blockchain; which creates a permanent divergence from the previous version of the blockchain. These can be a little dubious at times so do some research into what the actual application is of the hard fork — but these can dramatically raise the price as per the Ethereum London Hardfork that drove the price up.
Partnerships — This really can cover A LOT of things, so it is worthwhile digging deeper if you ever notice any new partnerships with assets, especially mainstream partners. For Example, Polygon partnered with Disney for their Accelerator program and subsequently, the price rose 80% during a very bearish period in the market.
Airdrop — The primary reason for organizing a crypto airdrop is to promote a blockchain startup, project, or service. By issuing tokens to users, the team can bootstrap its project and ensure a fair distribution of tokens among its community from day one. Moreover, recipients of these tokens are incentivized to increase awareness and help the project reach a broader audience once the token begins trading on an exchange.
The more interest surrounding the token, the more likely it will rise in price. Free Money! Who doesn’t like free money, but aside from the advantage of receiving this airdrop if you are holding the token, there is usually indeed the benefit of the price increases too as everyone is doing the same!
DCA + Fundamentals = Match Made In Heaven
Ultimately, these two were made for each other — One is isolating strong fundamentals or the new addition of fundamentals to an asset that is going to heavily weigh the increase in price (eventually) in your favour.
The others give you a big Dollar Cost Averaging system to ensure you get a strong position regardless of hitting any speed bumps along the way.
Combined, it arguably ends up being the perfect system.
Sadly, you don’t just “stumble” across such systems in the trading world….that is, unless you are signed up to Mizar.com.
There is a huge range of flexibility to the DCA systems to allow you to optimize entries and average into amazing positions automatically without having to manually monitor these trades and assets.
“Buy The Rumour — Sell The News”
Words by BlockHead
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