How to understand the altcoin market?

[masama]

Hi guys,

I just start to trade altcoins since the start of March 2016, and currently I only have a few knowledge of how to understand the markets behavior.

What I know now? First is reading the candlesticks bar which shows whether it is a dump or pump. I currently going for low amount of coins in CCEX and Poloniex as they can give me better returns. What am I doing is a short-trade, buy 60 sell 62, depends on how fast others react.

But when chatting at Poloniex, MODS always remind me that I must research, to be honest I don't know where should I start.

So I tried Googling, understanding the altcoin market and get a few knowledge how to understand the basics.

My question is, when this guys tell me to do my research what does it exactly mean? Can you give an example so a newbie like me that never been in programming and trading before could understand.

Thanks guys, and I will be keeping in touch. 

[Lionidas]

People who tell you to do your research usually mean that you have to pick a coin or several and buy those then after that to follow the market. It is easy to see which ones are hot but it takes a real good trader to spot a coin that is not very known and then buy alot of that when it is not very high in price then watch it shoot up in price in the next few weeks.

[vuduchyld]

I'd give you a slightly different take than above.  

First of all, you need to be able to articulate and understand YOUR goals and YOUR time horizons for success.  It can't be, "I want to get rich, beeeyotch!"  You should have some idea of what you plan to risk and how much you plan to gain over what period(s) of time.  Are you picking a few coins thinking you'll hold them until the world discovers alternative cryptos, at which point you'll be loaded?  Are you planning to trade in and out of a few coins, hoping to catch pumps?  These require very different strategies.  What is your style?  

Second, it's important to understand what differentiates the coins you want to trade or speculate in.  There has to be some kind of use case, some reason that coin is to be desired.  Why is this coin special?  Why might others be interested in buying it, someday, at a higher price than you're paying?  You may or may not have the ability to understand some of the details, but dig into the logic as deeply as you can.

Third, it's important to understand whether or not the coin is under active development.  There are a ton of coins out there that aren't being actively improved.  They languish for years, waiting for the pump.

Fourth, it's important to understand how (or even if) the coin is mined, whether or not the initial distribution is/was reasonable and fair, what the mining and the emission looks like.  

Might or might not be a great idea to buy coins then start following them.  Personally, I would tell you that based on the above, I would pick some coins that you might be interested in purchasing, learn more about them, then follow them to see how they behave in certain market conditions.  Get some idea of the volume and liquidity of those coins.  Follow the coin on your chosen exchange to see what the actual order books look like and see if you can figure out what conditions in the order book are favorable.

Understand that these markets are wild, speculative, and unregulated.  Your capital could be at great risk.  You may see great gains and also dramatic drawdowns.  

This is certainly not complete, but it's a start.

[masama]

Okay, that was epic. I totally get that, but can you explain to me this?

it's important to understand how (or even if) the coin is mined, whether or not the initial distribution is/was reasonable and fair, what the mining and the emission looks like.

I don't quite get it, is this the use of blockchain explorer? How can I scout if it is in good condition?

[Febo]

Actually when they tell you make a research they think about some different thing that you need. If you are day trader, then you just need trading skills.  So go to some economic speculative trading forums and read and learn. 

What in trolbox people advise you to research is if you want to buy coin and hold it fro some time. They tell you to learn what are you buying, not buy what someone tells you is best .

[vuduchyld]

Okay, that was epic. I totally get that, but can you explain to me this?

it's important to understand how (or even if) the coin is mined, whether or not the initial distribution is/was reasonable and fair, what the mining and the emission looks like.

I don't quite get it, is this the use of blockchain explorer? How can I scout if it is in good condition?

That could be part of it, sure.  I think there are some fundamental things one might want to know, though, even before you bother to check that out.  Read about some specific situations in these threads.  They are just recent...like on the latest 2-3 pages...but they might give you ideas about further reading and things you feel like you should learn.

https://bitcointalk.org/index.php?topic=999886.0
https://bitcointalk.org/index.php?topic=1343456.0
https://bitcointalk.org/index.php?topic=1431805.0

I'm busy with work today and anyway, I'm FAR from an expert, but you should understand some of the advantages/disadvantages of how the coin works--Proof of Work, Proof of Stake, etc...and how the coin is set up to self-sustain with mining, how initial coins were distributed, etc...  When devs allocate 50% or a pre-mine to themselves, for example, that might indicate that they simply want to make money off an ICO rather than that they are planning to continue development.  They might just be marketing a concept, then cashing out. 

That's a little more editorial than I want to be.  You can and should form your own opinions on what is best in YOUR opinion. 

[qwizzie]

You should also understand that this altcoin market is highly competitive and some cryptocurrencies
are in constant battle with each other, hoping to draw new investors to them or from other cryptocurrencies.

People advising to do your own research could then be read as gathering information that is not restricted
to only this specific part of the forum.  

My advice : check out some of the ANN threads of the cryptocurrencies you are interested in, understand what their weaknesses are and their strengths
and ask questions, lots and lots of questions. Ask about their roadmaps, development progress, their look on things (vision).

Also be informed that most of these cryptocurrencies have some form of testnet where you can try out these cryptocurrencies and play a bit with them.

If you are purely interested as trader then look at charts in general and try to find out what the trends are (most charts have options to set)
and what the indicators mean exactly (volume, MACD, OBV etc) and understand the difference in the intervals (5m / 1H / 4H /1WK)

[vuduchyld]

Okay, that was epic. I totally get that, but can you explain to me this?

it's important to understand how (or even if) the coin is mined, whether or not the initial distribution is/was reasonable and fair, what the mining and the emission looks like.

I don't quite get it, is this the use of blockchain explorer? How can I scout if it is in good condition?

That could be part of it, sure.  I think there are some fundamental things one might want to know, though, even before you bother to check that out.  Read about some specific situations in these threads.  They are just recent...like on the latest 2-3 pages...but they might give you ideas about further reading and things you feel like you should learn.

https://bitcointalk.org/index.php?topic=999886.0
https://bitcointalk.org/index.php?topic=1343456.0
https://bitcointalk.org/index.php?topic=1431805.0

I'm busy with work today and anyway, I'm FAR from an expert, but you should understand some of the advantages/disadvantages of how the coin works--Proof of Work, Proof of Stake, etc...and how the coin is set up to self-sustain with mining, how initial coins were distributed, etc...  When devs allocate 50% or a pre-mine to themselves, for example, that might indicate that they simply want to make money off an ICO rather than that they are planning to continue development.  They might just be marketing a concept, then cashing out. 

That's a little more editorial than I want to be.  You can and should form your own opinions on what is best in YOUR opinion. 

And this thread: https://bitcointalk.org/index.php?topic=1432761.0

[bigs21024]

Great read here will continue to follow. the longer you follow the market the more you will learn follow BCTtalk threads activity and coinmarketcap i know there are many other ways to many to list but you will figure it out the more time you spend. Good luck Bro!

[klarki]

You as a beginner, it is better to train on the C-Cex and the like.
on Poloniex, many automated trading robots, so you do not have time to sell at 62 when buying 60.

[FabioDelcatto]

You as a beginner, it is better to train on the C-Cex and the like.
on Poloniex, many automated trading robots, so you do not have time to sell at 62 when buying 60.

That doesn't make sense. When you buy make a sell order instantly.

The altcoin market is not really to understand. There are mostly pump & dump group active and if you buy at a low price and are patient you can earn big or lose your initial investment.

[emberbekas]

When I was a newbie I never do research on the altcoin. I just bought the altcoin that I want at that time and checked the price everyday. Hence, slowly I became very familiar with that altcoin movement and when I saw the price going up significanly I just sold it and wait for the price to go down to buy it again. So, for me, only time will lead me to understand the altcoin.

[The Sceptical Chymist]

You as a beginner, it is better to train on the C-Cex and the like.
on Poloniex, many automated trading robots, so you do not have time to sell at 62 when buying 60.

That doesn't make sense. When you buy make a sell order instantly.

The altcoin market is not really to understand. There are mostly pump & dump group active and if you buy at a low price and are patient you can earn big or lose your initial investment.

This.  There are in most cases no fundamentals, just pure market forces at work.  Buying and selling pressure.   If you can pick a hot coin early enough you can make money...but it's so easy to lose it all too.

[bitcoinbox]

I think when the mod says: "do your own research" it means that it is important to make the difference in between the real serious coins with serious dev's looking in the long term (probably less than 10% of all the altcoins) and the "scamcoins" that are most of the time just a clone of another coin and on the exchange just to make quick money mainly in the very first day.
To do your research, check out some of the ANN threads of the cryptocurrencies. Read, read, read!

[benedictonathan]

this is a good thread. I too just started this month and got invited by my friend to try Bitcoin. But also invited me some other coins too. I would be hopeful that by sheer experience and threads like this I will be equipped with the knowledge I need to succeed in Crytocurencies.

[kiklo]

Hi guys,

I just start to trade altcoins since the start of March 2016, and currently I only have a few knowledge of how to understand the markets behavior.

What I know now? First is reading the candlesticks bar which shows whether it is a dump or pump. I currently going for low amount of coins in CCEX and Poloniex as they can give me better returns. What am I doing is a short-trade, buy 60 sell 62, depends on how fast others react.

But when chatting at Poloniex, MODS always remind me that I must research, to be honest I don't know where should I start.

So I tried Googling, understanding the altcoin market and get a few knowledge how to understand the basics.

My question is, when this guys tell me to do my research what does it exactly mean? Can you give an example so a newbie like me that never been in programming and trading before could understand.

Thanks guys, and I will be keeping in touch.  

They remind you to research so if you complain you lost your money because the coin tanks, they can say it is your fault for not doing your research.  

If you watch the markets , you can tell the majority of investors do not do any research, they just pump a coin and when sufficient people have buy orders beneath their pump , they dump making a profit. Because when you do research a coin and you see that its wallets have no active connections and is basically dead, it price can still skyrocket.  

So buy low and sell high in small increments , if all you want to do is play day trader.
Pumps & Dumps will not necessary show up in research , so don't waste time with it.

However if you do your research and find a coin you do believe in, then you keep buying it no matter what shenanigans happen on the trading market.
For me that coin was ZEIT . (Going to Change the World, IMO )

Back to your original question.
Where can you do research?
Read the Coin's Forum every day, keep at eye on CoinMarketCap, and keep up with coin news on internet sites.
Oh , and keep a local wallet , even if it is only to check and make sure the coins has not died on you.
(Just remember a dead coin has never stopped a trader from Pumping it.)

Good Luck.  

 

[pc888]

There are many websites that help you research, for example Bata has some listed on this page:

http://www.bata.io/resources - under the title of CRYPTOCURRENCY CHARTS, MARKETCAP & STATS.

These are all third party sites.

Hope this helps with your research.

[orendel]

Three words: "pump and dump" 

[johnho.6491]

This is really a good thread ! I need more point of view from someone has experience.

[Rhosadah]

Hi guys,

I just start to trade altcoins since the start of March 2016, and currently I only have a few knowledge of how to understand the markets behavior.

What I know now? First is reading the candlesticks bar which shows whether it is a dump or pump. I currently going for low amount of coins in CCEX and Poloniex as they can give me better returns. What am I doing is a short-trade, buy 60 sell 62, depends on how fast others react.

But when chatting at Poloniex, MODS always remind me that I must research, to be honest I don't know where should I start.

So I tried Googling, understanding the altcoin market and get a few knowledge how to understand the basics.

My question is, when this guys tell me to do my research what does it exactly mean? Can you give an example so a newbie like me that never been in programming and trading before could understand.

Thanks guys, and I will be keeping in touch. 

After you have Bitcoin,
News spreads very quickly in the world of cryptocurrency, so keep an eye on the news every day
Follow the news on Twitter to find out the latest developments because the companies and cryptocurrency markets are often discussed there.You can also read the info in the forums that specifically discuss the topic of cryptocurrency or follow the corresponding hash tags. Information and news can be your strength, and rumors can also be an opportunity for you!
Fundamentals of Trading
In researching a market traders will usually refer to fundamental analysis.If you can search for the right information in a timely manner and understand exactly how the information is related to the market, it will be easier for you to predict market trends-especially to read whether the coin will rise or fall. In addition to fundamental analysis, you can also use technical analysis.Technical analysis is just as important, but it focuses on how to read the chart and find the specific patterns in it-for example, when the price reaches a certain point, the coin will decrease in price.
The most important basic thing to remember: Buy when the price is cheap and resale when the price is high.
Why? Because people who do not sell their coins when prices are being pumped up will not sell their digital currency at a lower price.So it's clear that when the coin price you buy is moving up and down, then it's a good time to resell your coin to Bitcoin. And if the coin you choose has good prospects and you want to invest for a long time, then make sure you buy the coin when the price is being dumped.Sometimes, it's easier if you focus on collecting good coin-coin instead of buying more Bitcoin because a good coin will definitely rise again.
And that's how this trading process works.