Watch it on youtube in the link below. There are over different altcoins, and the liquidity of these markets can range from peanuts, even some with 0 trading volume over 24h, to highly liquid cryptocurrencies like Ethereum, and more recently Factom, Dash, Monero, MaidSafe, and several others that have also been trading at significant daily volumes of BTC and above.
However, the number of coins that fall into this category only make up a small proportion of the total population of altcoins in existence. With that said, there are also several top tier alternative cryptocurrencies that are sufficiently liquid, enough to trade it without too much worry, as I have shared above. There are also less liquid coins which usually have less than 25 BTC or even 10 BTC trading volume per day, but also have potential for greater gains even though you will be limited to investing BTCs due to the liquidity of the coin, and you’ll have to keep a much closer watch on them.
Keep in mind that the lower liquidity a market has, the higher the risk associated with it. With that in mind, and if you’re ready to dip your toes into this exciting world of cryptocurrency trading, here are some general guidelines to trading altcoins, especially applicable if you’re new to all of this: Trade altcoin markets that have significant volume.
With altcoins, trading volume is a must. As a rule of thumb, don’t trade an altcoin market that has a 24 hour volume under 10 BTC, or up to 50 BTC if you’re more risk adverse. A market with little trading volume is easily manipulated by insiders, pumpers, and bigger traders. Stick to the liquid coins and you’ll have an extra layer of protection. Trade altcoins that have community support.
Trade altcoins that offer innovation over existing coins. Forget all that you currently know about trading. Only two things can happen in a trade, either the price goes up, or it goes down. Simple as that, and everything else is just a matter of perspective. You will need to first decondition yourself from any prior understanding of trading, and undo any bad habits you have accumulated.
The following chapters, especially about the technical analysis framework that I’m about to teach you is designed to decondition your mind to see price action and charts for what they simply are; a representation of human behaviour, while price is simply put; the perceived value of a stock by its market participants. Keep these very important points in mind as you read the remainder of the post.
Even for beginners, this should give you a good idea of what goes through my mind as I plan and execute my trades, and how technical analysis can be effectively applied to trading. And at the end of the post, I’ll discuss about developing a trading strategy that is both effective and tailored to your own style. I personally stick mostly to high market cap coins and those with higher liqudity, because risk is much lower with such coins.