Bitcoin 2016 Outlook

Since my last post, $BTC surged to $500, then had a dramatic dump to $300 before climbing back up to $400. In terms of the bigger picture, Bitcoin has broken the 18-month downtrend in October 2015 by surging above multi-month resistance at $300.

@jackfru1t #bitcoin monthly chart looks amazing. Probably be some correction soon, January maybe, before supermoon pic.twitter.com/WH09cP6DOp

— Jack Sparrow (@jackfru1t) December 17, 2015

I hope you're familiar with the crash cycle market structure by now, which I introduced in my 2014 post about market cycle, structure, and manipulation. Based on my interpretation of the crash cycle in Bitcoin, it would seem like we are nearing the end of the cycle, or beginning the new pump cycle. According to Jack, the price action we've seen in BTC over the past year or so places us somewhere at the 'disbelief' stage.

If $500 was the top of a successful test pump...we could be here. #bitcoin pic.twitter.com/sy08n8nUdS

— Jack Sparrow (@jackfru1t) November 5, 2015

Crash Cycle Comparison

If you've been following my blog and twitter account, you'll understand very well that market crash cycles can be found in every corner of the market. With the only similarity between all markets being the human beings behind the money (price), it would be sensible to think that the psychology & emotions behind these humans play a pivotal role in understanding markets and trading.

If we can break this market structure down into 4 easy-to-understand parts, we would come up with something like this:

1. Accumulation 
2. Launchpad 
3. Pump 
4. Dump 

Relating this to Bitcoin , it seems like the year long accumulation period is over, as $BTCUSD broke above major resistance $300 in October 2015. Based on this, I believe we have now moved into the launchpad phase with our current price action raging between $294 and $502.


If Bitcoin continues to be the leading blockchain network, it should become widely regarded and generally accepted as the base currency of other cryptocurrencies. My personal view is that Bitcoin and the blockchain are not going anywhere anytime soon.

In the shorter term, the bitcoin halving happening in Q3 2016 will set the stage for a pump, and for that to happen, MMs must maintain the uptrend structure formed since October 2015. Any breaks below structure will either delay the pump, or lead to another downtrend. Upside targets are $710, $995, and $1163. Downside is $341, $280, $220, $160.

Click here to get a closer look at the crash cycle comparison.

What's next? #Bitcoin | Wall Street Cheat Sheet 3.0 $btcusd pic.twitter.com/9nWXTasxVY

— fractalhedge (@fractalhedge) December 28, 2015

Will BTC/USD break ATH in 2016? #bitcoin

— Alvin Lee (@onemanatatime) January 8, 2016

After the dump from $500, the shockwave and general sideways in the 3-500 range gave time for traders to consolidate their crypto holdings and we have since seen funds flow into altcoins.

Alternative Cryptocurrencies - Are altcoins back?

Are Altcoins back or what? I suppose it pretty much depends on big daddy Bitcoin. #moonsoon pic.twitter.com/nEv75bIFox

— Alvin Lee (@onemanatatime) January 24, 2016

Notice that the altcoin charts in accumulation all look like Bitcoin from 2015 Jan to 2015 Oct. Now that's what I call a bullish chart! Coincidentally, notice that Bitcoin's pump above $300 in Oct'15 was the same time when many altcoins had their final dump and formed a low, before slowly moving up to break out in December/January and later.

2016 Pump Schedule Jan - FCT -> DASH -> ETH Feb - DOGE -> VRC -> VNL Mar - XEM -> XMR Apr - BTC May - Dump it. - MM pic.twitter.com/JT7c5t4Tde

— Alvin Lee (@onemanatatime) January 14, 2016

Here's a look at some charts of the alternative cryptocurrencies that are the leading the charge in this pump. I would consider these to be Tier-1 altcoins. Presenting: Dash, Factom, and king Ethereum.

Dashing $DASH charts. Feels like $BTC in Aug-Sep 2015. @22loops @pterion2910 pic.twitter.com/gKSwvel9FH

— Alvin Lee (@onemanatatime) December 25, 2015

Woah it's been 1 month since the $FCT pump started. Amazing work. @factomproject pic.twitter.com/vna6egY2X5

— Alvin Lee (@onemanatatime) January 24, 2016

MMs painting textbook crash cycle formations all over #altcoins. Pump mode much? $ETH #Ethereum @feudalmondays pic.twitter.com/Ip5hscB0nt

— Alvin Lee (@onemanatatime) January 13, 2016

And you should have noticed about 3 days ago that MMs decided to pump just about every coin out there:

It's easy when everything's just going up.. #altsareback pic.twitter.com/FkptScs4ti

— Alvin Lee (@onemanatatime) January 26, 2016

So here's a few other coins I thought are a good pick for the upcoming altcoin pump. I would consider these to be Tier-2 altcoins, based on technical factors such as trading volume and other fundamental factors like technology, innovation, developer, and community. These include: Monero (XMR), MaidSafe (MAID), VanillaCoin (VNL), and our old buddy DogeCoin (DOGE).

While everybody is busy looking at $ETH and $DASH, panic buy $XMR! @Poloniex pic.twitter.com/MoGAcFaXvg

— Alvin Lee (@onemanatatime) January 23, 2016

#Vanillacoin making moves and moving into Top 10 highest volume on @Poloniex. Got Bags? $VNL $XMR $MAID $DOGE $BLK pic.twitter.com/dEavq0n1J5

— Alvin Lee (@onemanatatime) January 25, 2016

Of all those charts out there, I'm liking $MAID's chances of blowing a 10x from here. 5k on the verge of breaking. pic.twitter.com/A8hIxIEMkp

— Alvin Lee (@onemanatatime) January 26, 2016

Other Tier-3 alternatives would include, DigiByte (DGB), BlackCoin (BLK), VeriCoin (VRC), as well as other "Crypto 2.0" alternatives such as New Economy Movement (XEM), NXT, Lumens (STR), Ripple (XRP), Counterparty (XCP), Bitshares (BTS).

With this, it seems like we're still on schedule for the pump leading up to the 2016 Halving in Q3, and it is likely we will see profits from the BTC pump flow into the altcoins. Did you notice that Altcoin volume has surged since October 2015, in the same way that Bitcoin volume has dramatically increased since August 2015? I'm picturing MMs and bulls beefing up their stacks, getting ready to slaughter the bears once and for all.

The altcoin market is very much different than how it was two years ago. There are now so many choices in the market, with all kinds of different innovations, it's hard to keep track anymore. There's hardly 10 coins that look like they can last another 5 years, while the rest are mostly junk clones with various marketing gimmicks, and I believe many of them will die out; those with little innovation will eventually be weeded out by the stronger coins such as Ethereum, and the market should normalize towards having only 1% of the altcoins dominating 99% of the market. And who knows what's to come in the coming years?

In line with the BTC halving in 2016 Q3, ZCash is launching and they're currently the strongest contender for leading the pump for the altcoin markets then, with many big names backing it. So stay tuned and keep a close eye on this one.

Zcash, an Untraceable Bitcoin Alternative, Launches in Alpha https://t.co/3zZ1jYTR56 #zcash #privacy @zooko pic.twitter.com/odVOf4fyFD

— Alvin Lee (@onemanatatime) January 22, 2016

My advice is to be versatile and stick to coins with good liquidity, and don't get yourself emotionally attached with any particular coins. Remember that at the end of the day, your goal is to grow your number of Bitcoins, or to increase the FIAT value of your portfolio. Markets, they go up, they go down, so always take profits and forget about the "what ifs". Good luck and may the force be with us.

P.S. Don't forget to sell at the end of the pump. Dump it. All of it.

Money Markets

I know the cryptocurrency markets have been going crazy the last couple of weeks/months, but let's not lose track of the money markets that are driving our current economic system. I'll just briefly touch on three major markets: Crude Oil, Gold, and the S&P 500 Index.

Oil has tumbled to a 12-year low of $28 a barrel on the 20th January 2016, amid tensions in the Middle East, and news of excessive supply. Someone said that this is good for the people because we'll have cheaper gas prices, but heck although oil prices have dropped almost 4-fold, my petrol prices here in Singapore are the still the same!


Gold rebounded strongly off $1050/oz, barely keeping structure above the critical psychological $1000 level.

@CryptOrca $GOLD Breakout from 1110 .... so far so good. pic.twitter.com/g76Uha1lFI

— CryptOrca (@CryptOrca) January 26, 2016

Will BTC/GOLD ever reach parity again? $btc $gld

— Alvin Lee (@onemanatatime) January 8, 2016

Since I last mentioned that $SPX was ready for a short back in early November 2015, it topped out at $2109.79 before sliding back down and breaking below the August 25th 2015 low of $1867.61 to form a new low at $1859.33 on January 20th 2016. Doesn't look too good on the $SPX, and this could spell the beginning of yet another major economic crisis.

Well.. you know. $SPX #lennyanalysis #TA pic.twitter.com/JqguHWWzpc

— Alvin Lee (@onemanatatime) January 14, 2016

$SPX longer term average sloping down has not been a good thing that last 2 times we've seen it #TA $spy @dogedradio pic.twitter.com/LSgGb6sPXT

— Kazonomics (@kazonomics) January 24, 2016

To end off, let me just leave you with this classic scenario:

Having a plan is one thing. Sticking to it is another. pic.twitter.com/e6cLoZLXCE

— Tom Dante (@Trader_Dante) January 15, 2016

Related Post: Uptrend Established Bullish Horizon for #Bitcoin: 2016 The "Pre-Halving" Pump (and Dump). $BTCUSD 

Related Post: $400 Bitcoin - Strong Bull Rally Final Target 600s. May the #crystalball be with us. 

Ladies and gentlement, the FOMO is real. $BTCUSD price action has been picking up steam over the last weeks, with a year long accumulation prior to the rise which has broken $318 convincingly.

Goodbye $300 Bitcoin! Hope we won't see you again for a long time. $BTC #Pump #Moon https://t.co/LeQRayAwGM pic.twitter.com/HiecJ2v10v

— Alvin Lee (@onemanatatime) November 2, 2015

Over the last week, we broke above $318 and made a high of $334.67 and consolidated for a moment before breaking above structure again, creating a new 2015 high of $342.06 on 2nd Nov. I went into greater detail on my Twitter post and Tradingview chart last night, saying that this move has legs and can potentially rally to $400 and beyond.

Bitcoin Major Resistance Broken: Short-term Uptrend Confirmation

Since then, we have rallied past the 340s and $BTCUSD (Bitstamp) is currently trading at yet another new 2015 high of $396. We're currently seeing the bulls and bears battle it out within the 386-396 zone.

Edit: Bitcoin has now broken $400 and is trading at $406.

Bitcoin Major Resistance Broken: Short-term Uptrend Confirmation - Trading at 400+

So what's the cause of this insane bitcoin price rise? There's been positive news about bitcoin going on for a few months now, mostly revolving around the "blockchain not bitcoin" idea. Some news include:

• Banks experimenting with Blockchain
• Gemini - $240s - Oct 8th
• Economist cover - $318 - Oct 31st

Do you know what blockchain technology is? It could make the future a very different place https://t.co/5TCBtnhG51 pic.twitter.com/NkF6xgZKZi

— The Economist (@TheEconomist) November 1, 2015

As I mentioned in my previous blog post: "this marks the beginning of a new uptrend as we head into 2016, with news outlets ready to paint a bullish picture as the market requires new buyers to get into pump mode."

I'm sure there's still plenty of news pieces in store, ready to be unleashed at appropriate times over mass media channels in the next months to attract new money into the bitcoin economy.

Looking forward to next week's weekly candle and seeing this Triple EMA turn green. Everything has been looking good since re-entering bitcoin in August and with the crazy price action since breaking out of $240.

Will have my sight set on $600+ if 420/450/480 levels are blown through. 657/670 will be my final targets for this run and I may be looking for a short into the 400s before loading up again. Trade safe, and may the power of the #crystalball be with us.

Bullish Bitcoin: Weekly Triple-EMA Turning Green - First Time Since August 2014

I think we're gonna see the 2015 high broken a few more times, so remember, the trend is your friend. Get yourself in a favourable position during the bitcoin rally, and leverage this opportunity on OKCoin, BitMEX, or Bitfinex for margin trading up to 100x.

$BTCUSD Made New Highs Again! Capitalize on Bitcoin uptrend with 100x Futures @BitMEXdotcom https://t.co/2dmNMgcC1q pic.twitter.com/4CM8kqlDdp

— Alvin Lee (@onemanatatime) November 2, 2015

On a separate note, the S&P 500 ($SPX) looks almost ready for a short entry. I've been eyeing this one for a while now.

S&P 500 Index ($SPX) Daily Chart - Looking for a short position

S&P 500 Index ($SPX) Weekly Chart - Support & Resistance Triple EMA

Watching the Triple EMA on the weekly closely.

Capitalize on this with Bit4x, 1Broker, and SimpleFX, and trade in global capital markets stocks indices forex using bitcoins.


References:

UPDATE: Bitcoin In Uptrend, Breaks Major Resistance $318, $400 & Beyond https://t.co/QuFO4UIR7F $BTCUSD @tradingview pic.twitter.com/s4TKQ2p4vT

— Alvin Lee (@onemanatatime) November 2, 2015

Previous Blog Post: Uptrend Established Bullish Horizon for #Bitcoin: 2016 The "Pre-Halving" Pump (and Dump). $BTCUSD



Share your thoughts and questions in the comments section below, or send me a direct email by filling out the form at the bottom of the page.

Remember this? I bet the first time you saw it in December you laughed this picture off, but it's okay so did I. And if this is the first time you're seeing this, don't dismiss it just yet!

Because, well, the harsh truth is that its all real. And this market cycle, believe it or not, is present in every market out there, including these Bitcoin & Altcoin markets.

All markets work the same way. Can you see it? @QTMHoldings #QTM #wallstcheatsheet pic.twitter.com/BXEUlu1NfQ
— Alvin Lee (@onemanatatime) April 17, 2014

If you haven't already, check out my previous posts earlier this year about trading Bitcoins and Altcoins, which highlight technical analysis basics, fundamental analysis frameworks, margin trading, and tips on developing a cryptocurrency trading strategy and TA. Here, I just want to point out the importance of understanding market structure, introduce you to market manipulation, and show you how technical analysis can be applied to your cryptocurrency trading.

As you read on, keep these following points in mind as these rules apply even more closely:

• What goes up must come down
• Buy on rumors, sell on news
• All markets are linked to everything else

To take this one step further and understand the markets from an even wider perspective, the next thing to do is to put on your market manipulator hat. Check out these 2 really good resources covering this topic for a deeper understanding of what I'm trying to get at:

• Wolong's Game of Deception PDF: http://cryptofrenzy.files.wordpress.com/2014/02/god.pdf
• Pumps, Dumps, and Manipulated Markets: http://altcoinnewsletter.com/pumps-dumps-and-manipulated-markets/

The whole point of learning about how market manipulators operate is not to actually manipulate the markets yourself or conduct pump and dumps, but to actually spot when others are trying to do so. This can help your trading strategy in various ways such as to:

• Have a better understanding of the ebbs and flows of the market
• Avoid getting caught in their squeezes
• Identify a suspicious (potentially profitable) market
• Know what the "smartest man in the room" is doing, and follow the "smart money"

From Wolong's ebook, he broke down the market cycle into 7 stages, namely:
If you compare the psychology chart above and the Pump & Dump cycle pointed out by Wolong, to the market structure chart below, you can see how they have very similar structures even though they use different terms to explain the phases.

Buy low sell high; easier said than done. Familiarize yourself with market structure. @QTMHoldings #QTM pic.twitter.com/DlOJ4yF6fE
— Alvin Lee (@onemanatatime) April 18, 2014

And from this market structure chart, you can see that the stages can be further simplified to 4 phases:

1. Accumulation
2. Markup (Pump)
3. Distribution
4. Decline (Dump)

So why is this important, or how does it apply to the cryptocurrency markets? By understanding the market cycle chart, you will be able to better pick altcoins by spotting accumulation zones to join the breakout and profit, and to make your exit when you reach distribution zones. For example:

Hope you managed to get some #MYR at that 350-400 floor I mentioned #crystalball #QTM pic.twitter.com/W6NOjRFiBk
— Alvin Lee (@onemanatatime) May 2, 2014

Although many people disregard the profitability (or possibility) of using technical analysis to trade the Bitcoin and especially Altcoins markets, it is most definitely possible. I think the problem lies predominantly in the limitation that some of you have put on the term 'technical analysis'.

If Technical Analysis to you means chart patterns, candles, and indicators; you're missing the big picture. #QTM
— Alvin Lee (@onemanatatime) April 23, 2014

Every piece of information on that chart you use is part of technical analysis; but the bigger question is how to make sense of it all. To better understand TA, we should think of the price charts as simply a graph of human behaviour.

Although the tools to do so efficiently are sorely lacking at this point in time, here's just a few examples of TA used on Altcoins and Bitcoin.

Fundamental Analysis
I believe that for an Altcoin to be worth anything at all, it MUST first have technical aspects which are built with the future in mind. This is what solely determines if a cryptocurrency has the potential for the mid to long term. Even with 5 new altcoins launching everyday, you barely see 1 a month that can last even the mid-term.

Then, after that I judge the coins based on 7 mediating factors; developers, community, branding/marketing, popularity/virality, novelty, infrastructure, and liquidity. For more about fundamental analysis and an explanation of these factors, read up on the first few sections in my previous post about picking and trading the next profitable altcoin. In this post, I will focus more on technical analysis and trading strategies instead.

With so many coins out there, I like to use these above factors to weed out all the weaker shitcoins, and focus on altcoins which are substantially different from others, and more importantly, provide more value than other cryptocurrencies. After which, I use Technical Analysis to judge entry/exit positions for trading them.

What else do you think makes a cryptocurrency fundamentally better than another, and more sustainable as a currency?

#FoodForThought: What makes a cryptocurrency better than another? What purpose does Money serve? #Bitcoin #Altcoins pic.twitter.com/kdv5i072UM
— Alvin Lee (@onemanatatime) March 10, 2014

Technical Analysis

Many will probably agree when I say that the Altcoins market is akin to the "penny stocks" of cryptocurrencies. In this sense, most altcoin markets have much lower liquidity, but have much higher volatility. Since there are over 200 different cryptocurrency markets to date, I prefer to narrow down my list of altcoins to a small handful, and buy under-valued coins or trade the breakouts. You're going to find it really tough to be watching more than 5 altcoins at the same time, so I highly suggest keeping your list small, and adapt your watchlist to the fast changing markets.

If you're new to technical analysis, here's a really good beginner's video on daytrading Penny Stocks, which also explains the basics of chart reading and an introduction to basic trading jargon that I'll be using throughout this post. The important concepts to take note of are resistances & supports, breakouts that coincide with high volume, and the general idea that "what goes up must come down".


So after you get the basics sorted out, you should be ready to learn how to trade! I'm gonna break this intermediate technical analysis tutorial down into five main portions, and have compiled videos from other trading experts to give even beginners a better overall idea, and teach you all you need to know to devise your own Bitcoin & Altcoins trading strategy.

Use these basic resistance & support levels to judge entry/exit prices. In general, previous high and low points are new resistances or support depending on where the price is, and points where u can see big breakouts will be the new short term resistance/support. To get a better idea of what I mean, watch these videos by Jason Stapleton who explains top down analysis, resistances & supports, and structure.




Here's another video which points out some keys to being a successful trader; namely to learn the set-ups, and to learn risk-management. Watch it here: "3 Keys to Day Trading Success: http://www.youtube.com/watch?v=TzsVTvA9DoE".

2. Retracements

The concept of retracements is, in my opinion, the most important one that any trading enthusiast must grasp in order to understand how the markets flow. In essence, a retracement is a temporary price movement against the established trend, and helps us understand that the markets move in wave patterns as highlighted by the Elliott Wave Theory. One way to look at it, as highlighted by this video below, is that most price-actions follow a pullback rule to fibonacci retracement levels (38%, 50%, 62%).


The most important concept to take away from this is "what goes up must come down"; that price movements in one direction are always followed by retracements in the opposite direction. Of course, not all movements will follow the same pullbacks, and these levels should only be used as a guide. Here's another video: "Understanding Fibonacci retracement lines: https://www.youtube.com/watch?v=KzHjxPxGzMw".

So the question then is, how will we know if this counter-movement price action is a retracement or a reversal? There is no way to say for certain, but there are several patterns that have a high probability in indicating a reversal; such as double tops/bottoms & head-and-shoulder patterns, and large selling volume after periods of bounded movement. Keep in mind that trading is a game of probability, consistency, risk-management and profitability over the long-term; not about making the right trade every single time.

3. Trading on Volume

Another important concept you need to understand is that large price movements almost always coincide with high trading volume. Take the recent spike in Bitcoin price on 3rd March 2014 for example:

Bitcoin price spike coincides with high trading volume: 3rd March 2014. (Bitcoinwisdom.com)

With this in mind, this is where the liquidity of an altcoin also comes into play; the higher the trade volume of an altcoin, the lower the spreads, and the more likely you will be able to make some profitable trades from it. In general, the trade volume is a good indicator of, and is proportional to the popularity of the altcoin at the current time.

Apart from the actual trading volume itself, another good indicator is the change in volume over time; if you realize that the trading volume of an altcoin has been steadily increasing over the last few days, it could be an indication that a big price movement is coming up. "24 Hour Volume" data is usually shown on the exchanges, such as MintPal or Cryptsy, while another good website to use is Cryptocoinchart's Market Comparison Chart, Coinmarketcap, and Crypto Coins Table.

Do also check out these 2 videos about trading on volume, that I'm sure will be useful for your altcoins and bitcoins daytrading:

1. Trading Volume Indicator on Your Day Trading and Swing Trading Charts: http://www.youtube.com/watch?v=byrjmP7DQJc
2. How to Analyze Stocks Trading on Volume: http://www.youtube.com/watch?v=lzfo-mh1Zv0

The last concept I want to share is breakout patterns. Although most people are familiar with this concept, many do not know how to profit from them. This is one of the best tools to use for planning your entry positions, while there are various ways to do so, which are highlighted by these first two videos below:



On hindsight, these breakout patterns always look like the perfect indicator for entry positions. But how do we really pull it off? How can we enter positions pre-formation of a chart pattern? Watch these videos to further refine your entry & exits on your altcoin trades.

1. Do You Trade Breakouts ? Trade Chart Patterns Simple Indicators: https://www.youtube.com/watch?v=XyR-m8aUY3I
1. Breakouts on Triangle patterns:
1. Ascending triangle - Trade long
2. Descending triangle - Trade short
3. Symmetrical triangle - Prior to forming triangle: only take long trades on the way up, and short on the way down
2. High Profit Trades found with Candlestick Breakout Patterns" - Stephen Bigalow http://www.youtube.com/watch?v=1fB3EF7XeXU

5. Advanced Trading Strategies

Learning #Bitcoin #Altcoins trading by watching Forex & Stocks trading videos on YouTube is like learning to skateboard w a bicycle manual.
— Alvin Lee (@onemanatatime) March 26, 2014

Now comes the fun part: how can we take all that we've learnt so far and put into good use for trading Bitcoin/Altcoins? Here are some pointers for you:

• What we've learnt is more of a tool to make better entry and exit positions.
• Keep in mind trading the bitcoin & altcoin markets as you watch the rest of these more advanced videos, and I hope you'll be able to gain some insights to build up your Bitcoins & Altcoins trading strategy.
• Granted, forex & equities trading is much different from bitcoin or altcoin markets. However, the fundamentals are the same, and you should learn to draw lessons from the strategies talked about in the videos to supplement your bitcoin/altcoins trading strategy.

In the next videos, more advanced trading strategies and chart patterns will be shared. These strategies may seem very specific, but my goal is to give you better understanding of how these analysis tools are used, and to give you an idea of how different tools can be used to develop a single trading setup. The specifics are not important; what I hope to achieve is to open up your minds to new ideas, expand your trading knowledge, and ultimately encourage you to explore a diverse variety of trading strategies.

Read up more on some of the main ideas discussed:

• Fibonacci Analysis
• Fibonacci Extensions vs Retracements
• Elliott Wave Theory
• Harmonic moves/pattern

If you have more time to spare, watch these 2 very good (but lengthy) videos by Steve Nison for more trading strategies:

• Profiting in Forex Disc 1: https://www.youtube.com/watch?v=RCTr8WGQDIw
• Secrets To Becoming A Samurai Trader, Steve Nison [1/2]: https://www.youtube.com/watch?v=VKtGeZUjLWo

What other trading strategies and chart patterns do you use for Bitcoin & Altcoins trading? Share it with me! I'm always up for a discussion and would love to learn more & improve my trading strategy. Leave a comment below or tweet me at @onemanatatime.

Cryptocurrency Portfolio

Although I've been talking about conslidating my portfolio into a largely BTC/LTC one since January, I didn't really do it until earlier this month. For me, it's back to basics: use technical specifications as the basis & utmost important factor for long-term sustainability.

Hence, my cryptocurrency portfolio now consists of a largely Bitcoin one, with a large portion of the other half in longer term altcoins such as Peercoin, Litecoin, Vertcoin, and Dogecoin. Lastly, I also leave about 10-20% of my portfolio to daytrade altcoins. I have listed my cryptoportfolio on the right column of this blog, and will continue to update it as the markets evolve.

Also, keep a lookout for my Cryptocoinchart's Investment Club profile, where I share new altcoin trades.

There are many available trading strategies to choose from to suit your own needs, such as daytrading, position trading, swing trading, fundamental trading, momentum trading, or scalping, just to name a few.

Although the Bitcoin and Altcoins markets are very similar, I trade them very differently. With Bitcoin and trading on Bitfinex, I would say my trading strategy is mainly a position or momentum trading one, and largely technical. On the other hand, my Altcoins trading strategy is largely fundamental although technical aspects play a role in selecting altcoins, and consists of a combination of swing and momentum trading.

In general, I use simple technical analysis concepts like a top down analysis, resistance/support, and structure to read charts and find entry/exit positions. On Bitfinex, I typically trade using resistance/support levels, coupled with breakouts on high volume. While for most altcoin markets, I first look for rising trading volume, and typically try to predict breakouts with fundamental analysis, or buy on retracements when momemtum kicks in.

Timing is everything in trading, and I typically keep my watchlist to 5 or less cryptocoins at any one time, and only spend about a day or two trading each one. In fact, I was only looking at 5 different altcoins throughout the whole month of March, but that's more than enough if each one made profits of 100-1000%. The altcoins that I were watching this month include: Heavycoin, Blackcoin, Digibyte, Fluttercoin, and Hirocoin.

Lastly, I just want to share some of the tools I use for trading these dynamic Bitcoin & Altcoins markets. If you have a useful tool I didn't list here, share it with me!

• Charts - Bitcoinwisdom.com, Cryptocoincharts.info
• Exchanges - Bitfinex, Cryptsy, Mintpal
• I try to keep off other exchanges. Although i do also use them on occasion, I keep my coins in there for a minimal amount of time, and withdraw it into a local wallet as soon as I've completed my trade.
• Charting - Tradingview.com
• Other resources for altcoin data (e.g. volume) - Cryptocoinchart's Market Comparison Chart, Coinmarketcap, and Crypto Coins Table.

More trading Tips

With that, let me just leave you with a few wise words and trading tips from @TraderHMS on Twitter.

1. What goes up must come down
Again, I just want to emphasize this, because I constantly get asked about chasing bubbles and if an altcoin is a good buy after rallying 500%. Every big price movement is followed by a big retracement, and the next retracements will gradually become smaller and less volatile; until new movement breaks the sideways momentum & starts a new cycle.

2. Money in the pocket is always better than potential profits
I typically don't hold a short-term altcoin for more than a week. In fact, I usually only spend 1 or 2 days trading a particular cryptocurrency. For now, my rule for trading shitcoins is "fast in fast out", and to always "sell too early and never buy at the bottom".

Losers postpone taking losses: Trading Card 96 pic.twitter.com/bvbPv3Fnqu
— Trading Cards (@TraderHMS) March 7, 2014

3. Trading is 99% watching and 1% trading
And another 1000% planning/learning/preparing. It is important not only to know "how" to trade, which I hope this post has helped you with, but also to know "when" to trade!

Trading Card 268: You need good technique and also good tactics pic.twitter.com/vBQqm56ceV
— Trading Cards (@TraderHMS) March 11, 2014

4. A good balance is essential
Do not be blinded by one particular type of analysis technique. Always try to couple a few different indicators in your trade setups, to improve the profit probability of your strategy. Finding a profitable strategy is easier said than done, but keep in mind that trading is a long term game where consistency is key. Think of profiting over the next 100 trades, and not just about the next 5 trades; and make sure to consider various types of analysis in your trading strategy, namely fundamental analysis, technical analysis, and market tone.

Think in terms of the next 1,000 trades you are going to make: Trading Card 165 pic.twitter.com/jjljUNeUn6
— Trading Cards (@TraderHMS) March 25, 2014

The Best Trades: Trading Card 266 by Michael Marcus (hedge fund manager profiled in Market Wizards) #investing pic.twitter.com/t6IhrEY7Km
— Trading Cards (@TraderHMS) March 5, 2014

5. What is your trading strategy?
A trading plan is essential if you're thinking about becoming a profitable trader! But what constitutes a good trading plan? Firstly, fundamentals; you need a basic plan for SELECTING the coins, you don't want to be trading any old shit coin. Secondly comes the technicals to help you pick an entry/exit; devise a holistic trade setup which considers a variety of factors. And lastly, consider the market tone; is there enough liqudity in the market, or is there growing interest from the community?

So, can you answer this last question?

Can you answer this trading question? : Trading Card 267 $SPY $FB $ES_F $QQQ pic.twitter.com/rwEPnvn99N
— Trading Cards (@TraderHMS) March 10, 2014

I hope this post has helped you on your cryptocurrency daytrading journey, and that you continue to learn and improve your strategy. Combine different analysis techniques, such as the ones mentioned above, and find a style that suits you; and you should be well on your way to developing your own profitable Bitcoin & Altcoins trading strategy!

If you have any questions at all, feel free to tweet me at @onemanatatime, or leave a question on ask.fm.

All the best & good luck!

P.S. If you're new here, make sure to check out my previous posts about Bitcoin & Altcoins daytrading:

• Reddit discussion about this post in /r/CryptoMarkets
• How to Pick & Trade the Next Profitable Altcoin: An Insight into What Goes Through my Mind
• A Beginners Guide to Margin Trading on Bitfinex: Why you Shouldn't be Trading on Exchanges
• Embarking on my Bitcoin Trading Journey: Learn Basic Technical Analysis

1. Top Down Analysis

Firstly, lets look at the top down analysis method of reading charts. I always begin by trying to understand the market from a bird eye's view. Compare both charts from a long term period (e.g. 1d) against one from a shorter period (e.g. 15m) to get a holistic view of the market. This will help give you a general perspective of market trends, while peaks & troughs give you an idea of market resistances & supports.