Determining your trading methodologies

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Many successful traders use a variety of trading methodologies before finalizing their preferred few. In the world of cryptocurrency where the market is volatile, you may need to use a couple of trading methodologies to counter-confirm your chart analysis. The three most commonly used trading methodologies will be Fundamental Analysis, Technical Analysis and lastly, Market Speculation.

Methodologies Definitions
Fundamental Analysis
  • A method to evaluate securities by measuring the intrinsic value of a stock
  • For instance, a fundamental analyst will study every aspect of the company from the overall economy and industry conditions to its financial condition and management of companies.[1]
Technical Analysis
  • An evaluation of securities employing studying statistics generated by market activity such as past prices and volume.
  • For instance, a technical analyst will use stock charts to identify patterns and trends which suggests what a stock will perform in the future.[1]
Market Speculation
  • Purchasing an asset such as a commodity, goods or real estate, hoping that it will become more valuable at a future date.
  • A practice of engaging in risky financial transactions in an attempt to profit from short-term fluctuations in the stock market.[2]

Being a savvy amateur crypto trader, I will use all three methodologies to analyze a long-term investment. With reference from Coinmarketcap.com, there are a total number of 1614 coins/ tokens[3] in the crypto market at the moment. For them to stabilize and sustain their positions in such a volatile market, their overall economic conditions, technology adoption rate from corporate companies and reputation in the marketplace are essential. CNBC reported that reputable companies such as IBM are adopting Stellar network to develop a cross-border payments system together with some large banks. In the same online publication, CNBC also shared that Deloitte, a consulting firm is also one of the partners. [4]

For short-term trading or swing trading, I will use both Technical Analysis and Market Speculation to analyze chart patterns for double-confirmation. Chart patterns and trends can be determined efficiently using financial indicators. If the particular token/ coin you intend to invest is displaying positive market response, you are sure to receive profits in no time. Nonetheless, do be mindful of the sudden massive volume of buy and sell activities from market movers aka whales. They usually speculate fake news to stir emotions and actions of the marketplace in an attempt to buy huge volumes of token/ coin at a lower price and sell them all off when they have reached their targeted selling price.

Which trading methodologies do you think is useful in your opinion? Share with us your thoughts by commenting on this article below!

References

  1. Investopedia Staff. “What is the difference between fundamental and technical analysis?” Retrieved 24 January 2018.
  2. Wikipedia. “Speculation” Retrieved 24 January 2018.
  3. “Cryptocurrency Market Capitalizations” Retrieved 24 January 2018.
  4. Cheng, Evelyn. (2nd Jan 2018). “There’s a new hottest cryptocurrency of 2018 so far: stellar” Retrieved 24 January 2018.

Thanks for reading!


Ampliv.io is a consulting company dedicated to blockchain startups and enterprise projects. Our team with 10+ years experience brings your strategic next-gen blockchain innovation to the extraordinary level. Our key offerings are 1. Technology Research & Innovation and 2. Market activation in Asia.

Yuree Hong

Yuree Hong is an entrepreneur, speaker, and blockchain tech consultant working actively in the blockchain and cryptocurrency industry; Founder and CEO of Ampliv.io and SHEBlockchainers.Asia. Featured on Forbes, Yuree is a growth-oriented visionary with ten years of marketing experience in APAC and the US. Her key skillset covers marketing, blockchain startup consulting, blockchain tech research and corporate training. She founded SHE Blockchainers Asia in 2017 with her passion for female inclusion in the blockchain industry. Ampliv.io, blockchain consulting firm, helps tech startups and enterprises navigate the blockchain industry and make the real use cases. She believes in the power of technology emergence in our daily life that transforms business models. She is passionate about working with tech startups, who can leverage her experiences from top brands to agencies. She worked at Korean Telecom, Brandtology (Microsoft, Citibank, Estee Lauder), Omnicom Media Group (Intel) and technology startups in cybersecurity and digital health.

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