When it comes to gathering, and analyzing the information we need to make wise trades - there's some problems with the current standard methods.
The worst of the worst - downright bold and manipulative tactics.
A perfect example of this would be organized 'pump and dump' groups, and while the SEC has taken some action targeting them, there's still plenty out there.
These groups usually work by telling members to meet up online through Telegram or Discord. Then, the group leaders announce which coin every member should buy immediately.
Let's imagine they choose a coin that's worth around $10, the ring leaders get it at that price. Then regular members of the group are told to buy it, they may raise it up to $13 if it's a larger group with hundreds of members.
Now that everyone in the group has their coins, they begin the next phase - publicly spreading fake news and rumors all across social media. They'll tweet things like 'just heard that this token is about to announce a major new partnership' and 'the coin is probably going to hit $20 by the end of the day'.
To those unfamiliar with what they're looking at, things may appear legitimate. They search twitter and see multiple people saying the same thing. Then they check the charts and see - this coin is on it's way up! For many, this is enough to trigger an impulse buy.
In reality, they're buying coins the scammers bought an hour earlier - because now the scammers are selling (dumping) them at a profit.
That's the worst of the worst, on the other end of the spectrum are those who share their thoughts and analysis of the market with the absolute best intentions. Genuinely good people who honestly aim to help fellow investors. The problem here just can't be fixed - subconscious bias.
Everyone, even the expert seasoned traders have their own personal favorite coins & projects. When there's valid criticism or bad news they may acknowledge it, but often it's downplayed or followed by an explanation of why that coin will 'bounce back.'
I'm absolutely not saying to stop listening to the opinions of other traders, there's some great minds in the cryptocurrency world and to ignore them would be a mistake. The honest ones would be the first to agree with me - that's why they say "but do your own research" right after they share theirs.
Point being - there's no such thing as someone giving unbiased advice.
Doing your own research...
Clearly, it's essential to have information that comes from a source immune to human manipulation.
Those seeking this kind of data are typically led to Technical Analysis (TA for short). For those who may be newer to all this, you've probably seen it, it's those charts people post that continue on into dates in the future and they've then drawn in what they think will happen next.
To be clear, I'm not taking a view against it - but be aware of its shortcomings. While current daily volume levels can be taken into account, TA relies very heavily on historical market data.
Many argue that there simply isn't enough historical data, period. Bitcoin turned 1 decade old just last week, but these methods come from stock traders who developed them with plenty of historical data to take into account.
An even larger point often ignored is how drastically the crypocurrency market changed in 2017. Late 2017 specifically, so barely over a year ago. The year ended with millions of people first discovering cryptocurrency even existed, and a market of around a dozen coins became thousands of coins competing with each other. I would argue that 'historical' data before this is virtually useless - it's historical data on a fundamentally different market.
With that in mind we're now left with 1 year of data. I'm not trying to be a downer here, but 2018 was spent correcting 2017, so I'd question even using that.
Point being - TA predictions should be taken with a grain of salt, and i'd strongly discourage making any trades based on TA alone.
The solution:
We need to be able to look at the information that’s important, and come up with an honest prediction of what will come next.
Sounds simple, it's not. Since the human element must be removed to guarantee there is no bias, what we're really talking about here is giving data to a computer and saying 'here's everything we know up to today, tell us what will happen tomorrow'.
While computers haven't been turned into digital crystal balls that perfectly predict future events - we have reached a point where those with access to their answers are given a clear indisputable advantage.
I first heard of these methods using complex algorithms, machine learning, and artificial intelligence a few years ago. At the time, it was only in reference to the stock market. Since then developers have made some significant technical advances, and more importantly - it's now being applied to the cryptocurrency markets.
Wanting to try these tools in my own hands, I found US based
Quantamize. (not an affiliate link, I don't get anything if you join).
There are others saying they use similar technology, but the ones I came across were either very expensive with no way to try it first, one was an ICO recently and you need to first acquire their token as they only accept that for payment, and the last one I looked at sells software that you need to keep running on your own computer.
Quantamize, however, gives you 3 free weeks. Their business model isn't 'hope they forget to cancel the trial' they didn't even ask for a credit card number, which seemed like a good sign.
They also seemed to cover the most ground and include 30 coins, it's web based so no need to run software on your computer - they handle all that, then you get the results on their site.
How it works, and why it makes sense:
Imagine you're not just an investor - you're starting a cryptocurrency trading fund. First thing to do is hire your research team.
You hire someone whose only job is to analyze daily trading volume, another person to focus only on price movements, another to analyze using all historical data, another to scan social media and gauge public sentiment, and another who reads every news article about cryptocurrency every day.
At the end of the day, you call a team meeting. You go through the list of coins your fund invests in, and each team member answers based on the data they looked at - will the coin go up or down in price? If most of the team says a coin is going up, it probably will.
Now - replace all of these people with artificial intelligence and machine learning algorithms running non-stop on a network of high powered computers, endlessly consuming and analyzing new data as it's available - this is Quantamize!
Called a multi-factor approach, for each market fundamental (daily volume, sentiment, etc) Quantamize develops a proprietary version of their artificial intelligence that only looks at the 1 cryptocurrency it was built for – there are unique AI algorithms for every cryptocurrency that Quantamize analyzes.
Let's circle back to the introduction where we discussed pump and dump scammers colluding to create false excitement around a specific coin to artificially 'pump' the price up.
First, Quantamize's AI dedicated to scanning social media posts will detect that currently there is a large increase in positive things being said about this coin. But - the AI's analyzing market fundamentals may see this coin has been on the decline for some time, daily trading volume has been low, and for months the long term outlook has been negative.
The end result would be a 'do not own' signal - because tricks that rely on using human emotion to make someone buy or sell simply won't fool the algorithms.
Using the data:
You still do all your own trades, on whatever exchanges you currently use. You don't put your cryptocurrency in the control of artificial intelligence or group of traders, you simply see what Quantamize is suggesting and decide if you want to act upon it or not.
Quantamize presents the data to be used in 3 different ways.
● Signals - All this research summed up and shared as a simple list of the 30 coins, with a green "buy" or red "do not own" (sell) next to it.
You don’t need to be a day trader to use these, the term 'signals' is often associated with high frequency traders who watch for signals changing minute by minute - Quantamize’s signals represent a 3 day outlook.
I consider myself a trader who manages his own portfolio, most cryptocurrency investors are. So for myself and most of you reading this, Quantamize's signals are a resource to check before you press that buy/sell button - make sure Quantamize isn't seeing something you may have missed.
● Portfolios - Quantamize uses their research to suggest full portfolios for those who may want to build one from scratch based on Quantamize’s research. There’s multiple options depending on if you who want to play it safe, or willing to take larger risks for potentially larger rewards.
If you're looking for a complete strategy where all you need to do is follow suggestions - this is for you.
● Research reports - in depth look at the news affecting the market, and in depth reports on specific coins and projects. If you've been hearing about a coin and want to really dive in and learn more, this is the place you would find the information.
Take a look, try adding this data to your decision making process, and see if it leads to better, more profitable trading. For 3 weeks of full access for free visit:
https://www.quantamize.com
