A lot of new projects are created every week. Some of them are scam, some are jusr averge and some are good enough to make you some profit. The most used source for finding crypto is coinmarketcap. When a new crypto is added there it becomes trully public, gets on new exchanges and expirience price moves. I always wanted to find a good way to profit from it. For that you need agood way to analyze newcomers fast (or you will just waste your time).
I've come with my own plan and shared it here:
https://steemit.com/cryptocurrency/@cryptohumster/treasure-hunting-or-how-to-fast-check-coinmarketcap-newcomersThere is still a plenty of space to improve it. I look forward to any comments and suggestions.
These steps are not a financial advice of any kind and is added for purpose of discuassion and entertainment.
So here is a short step by step process that I do:
1. Go to coinmarketcap and check newcomers. Select a newcomer and check the following:
- Volume and price chart. Coin can have several hours of history that can’t be actually used for any tech analyses, but we still can see if people are interested (high
volume) and if early holders are dumping it.
- Markets. Check if it is added to your favorite exchanges. In most cases there is no pint to create account on a new exchange to get a coin. Exchanges can also say a lot about project potential. If the first exchange is Binance or at least Kucoin, the projects deserves some attention.
- Social. Get a link to official twitter account. Don’t try to search it manually, you can easily get to a scam page. If no official twitter, it is better to stay away from the coin.
2. Go to twitter. We want to see an active account that has: thousands of followers, activity (should post often), twits are often liked and reposted, account is communicating with followers (ask questions, do promotions i.e. involves people).
3. Go to the official site (twitter always has the link). We need to get a short description of the project to understand:
- What is the problem that project solves
- How it is solved
- Team
- Roadmap and future plans
Don’t try to dig too deep, just go over to get the first impression.
4. Go to telegram group. Here we want to see the number of members (10 – 50k is good) and an active discussions (hundreds of people asking how to dump it on exchange is on obvious red flag).
5. If you don’t like the project at this stage, then stop wasting time on it. If it seems good, then the next stop is ICO sites like icobench. Just check rating here. You want to see it as high as possible. You also want to see initial price, how successful was the ICO (if hard cap was reached), bonus and bounty program.
6. Go to bitcointalk. Check if the project has at least several pages of discussion. Check if comments are positive. Search for airdrops and bounties. You need to understand how many tokens were given for free.
Why studying bonuses and bounty is crucial for your success? Bounty gives free tokens. When people get them, they dump them and the price goes down. Bonus does the same effect. If people were able to buy it with 100% discount at presale you will see immediate dump even if it is listed at ICO price. Early investors will fix their profits and dump at least a part of their holding to return investments. You don’t want to buy it and see the price going down, but you want to buy it dirt cheap from dumpers.
So how to profit:
You need to keep in mind that any ICO has bounties and bonuses. It is not a red flag for you, but you should act wisely taking it into account. If after your investigation you want to buy it, it can be a good idea to set an order to -30% / -50%/ -100% or even buy in several orders on different price. If you would catch the coin low, you can then sell it in parts in the same manner when it gives you 30% / 50% /100% profit or hold it expecting greater gains.
Please share you expirience and help me to improve this.
