Imagine a business, where the ingredients are free, but the end product is the most valuable commodity on Earth — a commodity so valuable it is taking over global stock markets.
The gatekeepers have outsourced content generation, but instead of paying you to create the content, you pay them. It’s like you paying a bank to hold your money on deposit, while they lend it out and keep the profit. Genius for them. Not so much for you. It’s a problem one cryptocurrency is attempting to solve.
The majority of traders don’t adjust their strategies depending on conditions, and they don’t monitor the strategies they use. Consistent speculators don’t just adjust strategies, dependent on where in the price cycle they are trading, they also follow the performance of the strategies they use, not only in testing before they use them but in real time.
Not so long ago, it was possible to trade with 400:1 margin, and if you think that sounds like a lot, it is.
Depositing $10,000 in an account with 400:1 margin would allow you to control a $4,000,000 position. And of course, it also means a small move of 0.50% against your trade in the underlying market would wipe out your account — and a lot more.
Time, when viewed from the future, gives us the illusion that events happen fast, but real life occurs in slow motion — compared to history. Looking back, thirty years from now, 2013 to 2019 will compress into the blink of an eye, and history will have judged the winners and losers in the cryptocurrency markets, making it seem evident for all to see. Meanwhile, back in real time, what will you do if a coin you own hits a bump in the road.
Most market participants lose, but it’s nothing to do with their IQ or intelligence. Many people, who’ve been successful in business and made money, come to the cryptocurrency markets and other financial market places and fail — sometimes spectacularly. What is it about investing and speculation that the majority find so difficult?
With bad news all around, fake volume, SEC rejection, and the postponement of Bitcoin futures trading, it’s difficult for all but those who think in probability and likelihoods to hold on. As the public loses interest, are the mega-corporations and financial institutions quietly manoeuvring behind the scenes, making ready for the future with a pincer movement?
Cryptocurrencies have been described as a solution looking for a problem. Out of the thousands of coins and tokens, how do you pick the future market leaders? Using a heat map is an efficient and effective way to see the big picture from a follow the money price-performance point of view, taking seconds to show Litecoin as the best performer in terms of volume traded and price performance.
Two paddles applied to the cryptocurrency marketplace kickstarted it into action, but instead of voltage, volume surged through the market lifting all but four of the top 100 coins higher over the last seven days. Is Bitcoin and the rest of the cryptocurrency market, as some headline writers suggest, taking a trip to the moon, or is this week’s move a test launch that’s about to plunge back to earth?
Instead of sophisticated bolt-on technologies, like the lightning network and atomic swaps, what is the likelihood that the driver of cryptocurrencies up the slope of enlightenment and into the mainstream will be something everyone can understand? What if your bank account was upgraded? The only difference being, you wouldn’t have access to physical cash.
Technical analysis can and is used successfully as a short term trigger mechanism, giving clear entry and exit zones, but when attempting to use technical analysis to position yourself into long term trends, trends that will last not for weeks or months but for years, even decades, exclusively using TA will have you at a disadvantage to those who are aware of the drivers of tomorrow’s societal trends.
Using third-party coin ratings, cryptocurrency indexes and their constituent weightings, and knowing the fundamental difference between a protocol and an algorithm, as well as the three most important functions of a cryptocurrency — security, decentralisation, and scalability, you'll be on your way to building a solid understanding of the cryptocurrency market. No technical background required.
Aphorisms. Financial markets are awash with pithy sayings meant to impart wisdom. Gems like, “Sell in May, and go away,” and, “So goes January, so goes the year.”
Most of the time the financial pearls of wisdom dished out to the masses won’t be much use, but there is one whose track record is better than most.