I've been trading bitcoin since 2013, and trading ETH since the summer of this year (mining ETH as well on multiple GPU rigs), along with trading many of the alt coins with a multi-market auto trading bot.
Here is my take on the OP's question:
This is a highly speculative strategy, akin to penny stock trading, or venture capital investing i.e. invest in 15 different things, 14 of which will lose or at best, break even, and 1 of which will make more money than you lost on the other 14.
Here is how to do it:
1) Focus on the alts with the highest liquidity. You can get the list of alt-coins, sorted by market cap as a proxy for liquidity.
2) Look at the top 20 or so coins on this list. Possibly filter out coins that are too expensive. Expensive is somewhat subjective - it depends on if you insist on coins being cheaper than $10 or something because the idea here is to buy them really cheap, and hold them for a long time looking for that 10x or 100x gain as Bitcoin did.
3) find the coins that have something that fundamentally differentiates them from other coins and provides some value to miners, holders or people using them for transactions, etc. For example, ETH is ASIC mining resistant and has a contract component as part of its fundamental structure that differentiates it from BTC
4) watch these coins and look for a volatility breakout. Be wary of pump-and-dumps though. After the VB, see if there is any news on why there was a VB. Wait for the coin to start making new highs above the VB peak, and buy in. As a back up entry, buy at the highest historical high. The general idea here is to not waste money on coins that are not showing any signs of life. Avoid opportunity cost.
5) Hold them for a long time. Hold them OFFLINE and not in an "exchange". Use a paper wallet, digital cold storage wallet, etc. The idea is to protect yourself from another Mt.Gox type of event. Also, note that this means holding the coins 8+ years. This is not a short term trade. Recall the Bitcoin for pizzas story: 2 pizzas were purchased for 10,000 BTC back in 2010. Someone in 2010 bought 2 pizzas with 10,000 bitcoins — which today would be worth $20 million Today those would be $194 million dollar pizzas. That is some f'ing expensive-a$$ peperoni!
6) Exit strategy: I'm a trader, so I would attempt to time the exits at the periodic peaks on the way up. I would not cash out my entire position. I would cash out some so I can enjoy the profits (and redeploy them somewhere else), but continue to hold some of the coins.
Here is my take on the OP's question:
This is a highly speculative strategy, akin to penny stock trading, or venture capital investing i.e. invest in 15 different things, 14 of which will lose or at best, break even, and 1 of which will make more money than you lost on the other 14.
Here is how to do it:
1) Focus on the alts with the highest liquidity. You can get the list of alt-coins, sorted by market cap as a proxy for liquidity.
2) Look at the top 20 or so coins on this list. Possibly filter out coins that are too expensive. Expensive is somewhat subjective - it depends on if you insist on coins being cheaper than $10 or something because the idea here is to buy them really cheap, and hold them for a long time looking for that 10x or 100x gain as Bitcoin did.
3) find the coins that have something that fundamentally differentiates them from other coins and provides some value to miners, holders or people using them for transactions, etc. For example, ETH is ASIC mining resistant and has a contract component as part of its fundamental structure that differentiates it from BTC
4) watch these coins and look for a volatility breakout. Be wary of pump-and-dumps though. After the VB, see if there is any news on why there was a VB. Wait for the coin to start making new highs above the VB peak, and buy in. As a back up entry, buy at the highest historical high. The general idea here is to not waste money on coins that are not showing any signs of life. Avoid opportunity cost.
5) Hold them for a long time. Hold them OFFLINE and not in an "exchange". Use a paper wallet, digital cold storage wallet, etc. The idea is to protect yourself from another Mt.Gox type of event. Also, note that this means holding the coins 8+ years. This is not a short term trade. Recall the Bitcoin for pizzas story: 2 pizzas were purchased for 10,000 BTC back in 2010. Someone in 2010 bought 2 pizzas with 10,000 bitcoins — which today would be worth $20 million Today those would be $194 million dollar pizzas. That is some f'ing expensive-a$$ peperoni!
6) Exit strategy: I'm a trader, so I would attempt to time the exits at the periodic peaks on the way up. I would not cash out my entire position. I would cash out some so I can enjoy the profits (and redeploy them somewhere else), but continue to hold some of the coins.
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