BUY LOW / SELL HIGH
Simple isn’t it!
But how do you know what will go high and what is a low price?
What I’ve noticed!
When you look at the chart and you see a massive spike in volume of trades.
If people are buying the price goes up! More people buying is a serious show of interest from people, if you can see the volume spike before the price hike, you should be “quids in”!
However, this requires impeccable timing and a lot of time looking at relative trade volumes.
When bitcoin goes up, everything else goes up.
For the most part when bitcoins price rises (to new highs), all the other alt coin prices rises (mostly). When bitcoins price goes up (to new highs), this is new money into the industry, this is more money in the market, real investment.
Bitcoins are the gateway from fiat to crypto, so even if (which I believe is often the case at the time of writing) investors want to buy Ether, they must first buy Bitcoin before they can make the trade. This is the same for all measure of other coins, so the market becomes much like squeezing a balloon, where the market deflates at one side, it will inflate on the other. There are really not many places where this can happen in this market, so you can (if you watch closely) where the money is moving to and from.
If you see bitcoins price going up after a down, not to new highs, but just to previously attained prices, we will probably see other coins prices going down, where money is moving from one coin back to bitcoin as the “safe heaven”.
It is easier to put money into crypto-currency than to take it out, so I feel that a lot of people (the majority of the market) that have gone in to it, are there for the long haul rather than jumping in and out of crypto to fiat.
Get into the tech’s philosophy before the monetary investment.
If you believe in the project that has been created to solve a real problem, the chances are you are one of the early adopters to the philosophy. If it’s a good one, then others will buy in. What makes this coin different to the next?
All crypto-currency is relatively new, any investment makes you an early adopter (no it’s not too late, there’s loads of new projects).
(Exactly why I got into Ethereum and no all of this.)
Watch previous peaks and troughs and see where it stands now.
If you look at a lot of coins (many not much more than one or two years old) you can see their entire life on the market. When it was high and when it was low. There’s nearly always some spike near the beginning, usually associated with an ICO. What often follows is down turn where initial investors (market traders) have made some profit and have pulled their money out.
What happens next (or not) is investment from those who actually believe in the tech and see the value in it’s development and longevity. If this happens you will see a steady price rise over time and then some bumps here and there where “investors” have jumped in and out.
If this tech has a long term vision and an actual “product’ in the making (which can be discovered with some good research) then you know that 1) it’s always capable of reaching the price of it’s highest previous price. 2) if the price dips below a long term average (and it ticks all your belief boxes) then it’s time to buy.
Predicting the ups and downs with the MACD
At last MACD means something better than crap fast food.
This stands for the Moving Average Convergence Divergence, if you head on over to Poloniex and click on any coin, you’ll see it price chart that shows it value over time and volume of sales over time. Under this is the MACD, two lines that plot the average values over time. One line represents the long term moving average and the other the short term moving average.
When the long term moving average moves above the short term moving average it usually indicates a price rise and vice versa.
What you are therefore looking for is when the lines are going to cross (You know, like in Ghostbusters, you cross the streams and everything blows up.)
You can read more about the MACD and how to use it here.