Oct 9, 2017 06:42 PM
(This post was last modified: Oct 9, 2017 06:57 PM by Eagerkid.)
Bookmark this thread for future reference
INTRODUCTION
THE MARKET IS DOWN....AHHHHH
The worst thing you can do is panic when the market is down, that is not to say your investment will be safe or that you picked the right coins. All it does is allow you to make a more educated decision on the situation and it allows you to better evaluate the market. Below I will explain how to evaluate coins and so if you are invested in coins already you should take a step back and reevaluate them to make sure you are making the best possible decision.
Do you understand Blockchain Technology? Most people investing in crypto currency dont understand blockchain technology and how it works exactly. That is like buying a car before you have a license or understanding of its safety precautions. If you dont know how crypto currency works or blockchain technology then you need to pull out of the market and do some research. Blockgeeks has a good article for the basic understanding.
How are you receiving your investing advice? Are you buying into it because your friends are jumping up and down from 1 successful 5x in a short amount of time? Or are you investing because you see potential from actual research and not "news articles". The best way to invest of course is from your own personal knowledge and the combined thought of others. News articles are good but come with a great responsibility! Use it as a guide but not advice. Often times, people will read a "buzz" article about a coin and then go on and invest into it without doing ACTUAL research on the coin. This causes a lot of problems and will make your crypto currency investing experience horrible.
Do you understand the risk of crypto currency? 99% of these coins that are out on the market today will fail. Most of them are like politicians and promise innovation that is not technologically possible or a whitepaper that looks good but does not actually work out for one reason or another. With that knowledge that most of the coins are going to fail, you should really think about how your ROI and EV will be effected.
EV is very important when thinking about crypto currency coins and potential investments. You can read about Expected value here.
A example of EV:
When you are driving into a parking lot, do you take the first spot you see that is the closest to the building. Or you do you drive up past your vision and hope their is a better spot? The anwser is simple, it is +ev to pick the closest spot that you can see, rather than driving past your vision. ( this is in terms of time ) You will spend more time looking for a spot that is past your vision and not finding a spot and having to circle back around, than you would if you just picked a farther spot and decided to take the initial longer distance. This is taken at a large population of times. If you did this 1000 times, what would work best? Taking the closest spot you can see. Of course luck does play a role like it does in many business situations, however when you think about variance luck does deteriorate as time goes on. If you play that scenario 1000 times, regardless of your luck you would find that parking your car closer would be more beneficial in terms of your time. ( Which is your most valuable resource)
How much are you spending every day researching? The crypto currency market changes every day and new information and regulation comes out so you need to be on your feet if you want to succeed as a active investor. I would recommend spending 1 hour a day reading up on recent news, and spending time to reflect on how that information will effect your coins or the crypto currency market.
When you hear about a coin, what is the first thing you do? Often times people will see pumped news about a coin that gained 100% over the weekend, and because you are a money hungry machine you want to jump onto it because you are scared you will miss the wave. Lots of people will go to CoinMarketCap and look up the coins ticket and take a look at the chart and become "superhero graph readers" and invest based on how the market is moving.These people are the same people that will not last long in the crypto currency world. Yes, the graph does play a role but more importantly the coins market value. I would suggest getting out of the investing game if you did any of the above things. You can always get back in when you are ready, but if you are doing the above you are not heading in the right direction.
What should you do?
1. Take out a piece of paper ( Yes. If you want to make money and seriously make a long term profit you will need to do some hard work. However if you are investing for the shits and giggles then you can just skip over this thread )
2. The second thing you should do when you hear about a "new investment look" is look the coin up on Coinmarketcap and check out the coins MarketCapital and write it down on a piece of paper.
3. Instead of jumping to a news article that will potentially be pumping the coin, go to the actual website of the coin and read the white paper and take notes on your piece of paper.
Basic questions you will need to anwser to evaluate a coin. Click The Spoiler
Spoiler (Click to View)
*This is very important and is especially important when deciding to invest in a ICO. You will notice when you look through ICO's that they are basically a hidden "crowdfund" and not a good investment. They will talk about how they will make so much money with their application, but you should note that just because they are profiting doesn't mean your coin will increase in value. When buying a coin, you are most likely not receiving a equity in the company.
After answering these questions, you are probably exhausted with information. Take a small break and then continue on with this guide.
4. The fourth step is to look at all of this information and decide how much the coin is worth in terms of evaluation. You will use the above information to decide how much the coin is worth, and you will need to do some research into the market that the company wants to enter. If the coin wants to transform the "music" industry, you should think of how the coin could change the industry. What are some problems in the industry? And how could this coin solve them?
Evaluating the coin is very hard because you need to analyze a lot of information to come to a good guess.
5. Once you have evaluated the coin, you can look into the news and listen to others on their analysis and see if you can transform your own personal opinion. The hardest thing to do, is the actual research. It is easy to visit CoinDesk or a news site and read about a millionaire who does or doesnt like the idea. The real power is researching it yourself, because when you do this you will be confident in your investment. And once you think the evaluation of the coin is reached, and you think it is too high you can sell your coin and make a very large profit. :)
Thinking about crypto currency in a more educated light
TABLE OF CONTENTS
INTRODUCTION
Do you understand Blockchain Technology?
How are you receiving your investing advice?
Do you understand the risk of crypto currency?
How much are you spending every day researching?
When you hear about a coin, what is the first thing you do?
What should you do?
INTRODUCTION
Do you understand Blockchain Technology?
How are you receiving your investing advice?
Do you understand the risk of crypto currency?
How much are you spending every day researching?
When you hear about a coin, what is the first thing you do?
What should you do?
*Basic questions you will need to anwser to evaluate a coin. *
INTRODUCTION
THE MARKET IS DOWN....AHHHHH
The worst thing you can do is panic when the market is down, that is not to say your investment will be safe or that you picked the right coins. All it does is allow you to make a more educated decision on the situation and it allows you to better evaluate the market. Below I will explain how to evaluate coins and so if you are invested in coins already you should take a step back and reevaluate them to make sure you are making the best possible decision.
Do you understand Blockchain Technology? Most people investing in crypto currency dont understand blockchain technology and how it works exactly. That is like buying a car before you have a license or understanding of its safety precautions. If you dont know how crypto currency works or blockchain technology then you need to pull out of the market and do some research. Blockgeeks has a good article for the basic understanding.
How are you receiving your investing advice? Are you buying into it because your friends are jumping up and down from 1 successful 5x in a short amount of time? Or are you investing because you see potential from actual research and not "news articles". The best way to invest of course is from your own personal knowledge and the combined thought of others. News articles are good but come with a great responsibility! Use it as a guide but not advice. Often times, people will read a "buzz" article about a coin and then go on and invest into it without doing ACTUAL research on the coin. This causes a lot of problems and will make your crypto currency investing experience horrible.
Do you understand the risk of crypto currency? 99% of these coins that are out on the market today will fail. Most of them are like politicians and promise innovation that is not technologically possible or a whitepaper that looks good but does not actually work out for one reason or another. With that knowledge that most of the coins are going to fail, you should really think about how your ROI and EV will be effected.
EV is very important when thinking about crypto currency coins and potential investments. You can read about Expected value here.
A example of EV:
When you are driving into a parking lot, do you take the first spot you see that is the closest to the building. Or you do you drive up past your vision and hope their is a better spot? The anwser is simple, it is +ev to pick the closest spot that you can see, rather than driving past your vision. ( this is in terms of time ) You will spend more time looking for a spot that is past your vision and not finding a spot and having to circle back around, than you would if you just picked a farther spot and decided to take the initial longer distance. This is taken at a large population of times. If you did this 1000 times, what would work best? Taking the closest spot you can see. Of course luck does play a role like it does in many business situations, however when you think about variance luck does deteriorate as time goes on. If you play that scenario 1000 times, regardless of your luck you would find that parking your car closer would be more beneficial in terms of your time. ( Which is your most valuable resource)
How much are you spending every day researching? The crypto currency market changes every day and new information and regulation comes out so you need to be on your feet if you want to succeed as a active investor. I would recommend spending 1 hour a day reading up on recent news, and spending time to reflect on how that information will effect your coins or the crypto currency market.
When you hear about a coin, what is the first thing you do? Often times people will see pumped news about a coin that gained 100% over the weekend, and because you are a money hungry machine you want to jump onto it because you are scared you will miss the wave. Lots of people will go to CoinMarketCap and look up the coins ticket and take a look at the chart and become "superhero graph readers" and invest based on how the market is moving.These people are the same people that will not last long in the crypto currency world. Yes, the graph does play a role but more importantly the coins market value. I would suggest getting out of the investing game if you did any of the above things. You can always get back in when you are ready, but if you are doing the above you are not heading in the right direction.
What should you do?
1. Take out a piece of paper ( Yes. If you want to make money and seriously make a long term profit you will need to do some hard work. However if you are investing for the shits and giggles then you can just skip over this thread )
2. The second thing you should do when you hear about a "new investment look" is look the coin up on Coinmarketcap and check out the coins MarketCapital and write it down on a piece of paper.
3. Instead of jumping to a news article that will potentially be pumping the coin, go to the actual website of the coin and read the white paper and take notes on your piece of paper.
Basic questions you will need to anwser to evaluate a coin. Click The Spoiler
Spoiler (Click to View)
*This is very important and is especially important when deciding to invest in a ICO. You will notice when you look through ICO's that they are basically a hidden "crowdfund" and not a good investment. They will talk about how they will make so much money with their application, but you should note that just because they are profiting doesn't mean your coin will increase in value. When buying a coin, you are most likely not receiving a equity in the company.
After answering these questions, you are probably exhausted with information. Take a small break and then continue on with this guide.
4. The fourth step is to look at all of this information and decide how much the coin is worth in terms of evaluation. You will use the above information to decide how much the coin is worth, and you will need to do some research into the market that the company wants to enter. If the coin wants to transform the "music" industry, you should think of how the coin could change the industry. What are some problems in the industry? And how could this coin solve them?
Evaluating the coin is very hard because you need to analyze a lot of information to come to a good guess.
5. Once you have evaluated the coin, you can look into the news and listen to others on their analysis and see if you can transform your own personal opinion. The hardest thing to do, is the actual research. It is easy to visit CoinDesk or a news site and read about a millionaire who does or doesnt like the idea. The real power is researching it yourself, because when you do this you will be confident in your investment. And once you think the evaluation of the coin is reached, and you think it is too high you can sell your coin and make a very large profit. :)
![[Image: RiVgfAL.png]](https://i.imgur.com/RiVgfAL.png)
