Evolving from HODL and BTFD, enthusiasts of the cryptocurrency world have moved on to learn better money management strategies and acquired trading tools to make the most of their investment. New developments aim to serve traders by helping them make more informed decisions based on more datasets.
Traditional Trading Tools for Innovate Digital Assets
Fundamental and technical analysis are two sides of the same coin, and experienced traders use both to their advantage. Strong fundamental analysis helps with finding potential low-cost altcoins, which may give a 15x in the short term due to a strong team and/or real partnerships.
On the other hand, T.A helps to track the market accurately for top ten coins, and a trader may “short” the coin in case the technicals predict so.
Tradingview.com provides the best real-time charts and technical tools used by professional traders in traditional finance markets. The “indicators” on the site are accurate and increasingly used by cryptocurrency traders to trade their holdings.
Exhibit A consists of a three indicator trading system, using a MACD, Stoch RSI, and a custom built “Turtle,” which catches trends and indicates the trader as to how the market might react in the future based on similar reactions in the past.
(Exhibit A: Tradingview)
All Coin Details in One Place
An up and coming website, Onchainfx, is increasingly being adopted by many traders. In a single page, they give all the details and numbers one would possibly need, including 24-hour transaction volume, number of transactions per day, NVT ratio, fees, and short-term ROI.
Traders can capitalize on this information to place trades based on this data. In March 2018, Onchainfx added Github repository data. For those who don’t know, Github is an open source software and coding portal.
We plan to add github stats data as core metrics.
— OnChainFX (@onchainfx) January 12, 2018
On Github, teams post code, patches, and fix flaws in real time. This data collection indicates the strong work ethic and vision of the team and positively increases investor confidence. It is advisable to invest in organizations and tokens which are continually adding and developing their code.
Using the information on Onchainfx, Lisk has seen the most activity over the past 90 days regarding Github “commits.” This project is followed by Tron and EOS, signifying efforts made by their teams.
(Exhibit B: Onchainfx)
Coinmetrics.io is yet another site that provides traders with log charts and rolling correlations of daily returns. Although intimidating at first, the site offers historical details and indicators for a particular coin, making future trades possible by comparing the actions on historical data.
(Exhibit C: Coinmetrics.io)
Areas in red show when bitcoin’s RSI surpassed 75
While there are certainly a number of other tools and practical guides that novice and advanced traders have at their disposal, there are also many who believe this kind of technical analysis amounts to null in this market. The instability of the sector overall accounts for more than a few surprises and this fact alone has convinced some that cryptocurrency trading is simply gambling.