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In order to choose a suitable strategy for yourself, you need to understand that:
Short-term is an investment in the cryptocurrency for a period of 1 to 60 days;
Long-term investment in cryptocurrency is a term from 60 to 365 days and more;
Criteria that should be paid attention in short-term investments:
1. The first is an upward trend. In order to determine the trend, you need to open a schedule of the selected cryptocurrency, for example on coinmarketcap and look how it's move. If the uptrend is upward. Down - the trend is downward. The price is stable - flat. Trading is always recommended on an uptrend because the risk of a price drop decreases.
2. Capitalization is the second thing to pay attention. Again this info is posted on coinmarketcap.com
3. Exchanges, where chosen crypto is trading. Again look it on coinmarketcap.com. If chosen coin is traded on the bittrex, poloniex, cryptopia, kraken, livecoin and yobit exchanges, this will be a big plus.
4. Trading volume per day. The higher volume, the higher your chance to buy cheaper and sell more expensively in a short time.
5. Coin price. For short time better don't invest in expensive coins, because it is unlikely that an expensive coin can grow quickly.
6. Volatility. Exchange rate fluctuation, if the chart for a short period of time shows a sharp rise and fall, this is a good indicator for short-term investment.
7. Opt price calculation. In order to calculate the optimal purchase price for a certain cryptocurrency, you need to know the following values (look it in coinmarketcap.com, except the Last price):
Max price - the maximum price of a cryptocurrency for a period 3-6 months.
Min price - the minimum price of the cryptocurrency for the period 3-6 months.
Last price - the last price of the currency on the selected exchange;
Average - the arithmetic mean of the Min price and Max price.
Average = (Max price + Min price) / 2;
So, in order to calculate the optimal purchase price, we need:
Opt = (Average + Last price) / 2.
In this case, Opt is the optimal price for entering the cryptocurrency exchange.
Attention! The calculation formula Opt is valid only if its result is less than the last price on the exchange (Last price).
What is the capitalization of the crypto currency?
Capitalization of each crypto currency is calculated as follows:
Price * Number of coins in circulation = Capitalization.
Criteria for longterm currency trading:
1. Mention of selected cryptocurrency by authoritative sources like wikipedia, bitcointalk. It is not important to mention here, but the information that can talk about the prospect, for example:
- author, founder, team (its authority, early projects);
- the year of foundation. If the coin has long been on the market and is growing all the time, this is a good indicator.
- implementation, it is important to pay attention to a partnership with large companies, which can lead to growth.
- Feedback. This applies to advanced forums like bitcointalk.org where you can read reviews of advanced users about this cryptocurrency.
- relevance, check the latest activity on the bitcointalk.org forum for the chosen crypto.
2. Technology and idea. A unique idea that has no analogs, or technology that has supplemented or surpassed its predecessors.
3. Site, social networks, google:
- approach to building a site (whether it reveals the meaning of the cryptocurrency, design, gravity of the approach, traffic);
- social networks (whether there is activity in social networks - posts, likes, comments);
- google (enter the name of the selected currency in google and see the activity for the last week);
4. News. Check whether there are promising news on this cryptocurrency, the frequency of their updates.
5. Pump. Check the chart for the presence of rapid price increases - this is a sign of rapid infusions of large sums of money.
6. Seasonality. Usually, it was spring. But this spring wasn't stable, so be careful with this point.