Important thing to consider in ICO Trading
Step in ICO Trading
- Research Extensively on Upcoming ICOs
Extensive research is vital in ICO trading since it is the only means by which an investor is guaranteed a return on his or her investment. An investor should look at resources or outlets that feature the latest ICOs. Knowing which ICOs are coming up will enable an investor to plan, especially for ICOs that have a whitelist. A whitelist ICO enables prospective investors to register in advance to participate in the ICOs, which are usually hallmarks of popular ICOs that have a limited number of coins to offer. The best websites to research upcoming ICOs are Top ICO List and ICO watchlist. At the time of writing, Top ICO List had placed TRIPBIT, COTI, and Qurrex as the top lucrative upcoming ICOs to invest in, while ICO watchlist had noted Payera, Xsolus,and Global Reit as the top upcoming ICOs. Therefore, prospective investors should carry out extensive research before deciding on which ICO to invest in.
- Act Diligently
In the previous chapter, we discussed how ICOs are prone to frauds such as exit scams and Multi-Level Marketing Systems. Due to this reason, investors should perform their own research to ascertain that an ICO is a good and credible project and hence avoid being defrauded of their hard-earned investments. Research done should involve reading reviews and analysis done by others to verify the potential of the ICO. There are so many good ICO review resources that can be accessed at Crush Crypto and Reddit websites.
- ICO Participation Process
The ICO participation process entails three main steps.
- Opening an Exchange Account
After extensive research and assurance in the credibility of an ICO, the next step is to open an exchange account to participate in the ICO process. The account should be able to accept fiat cryptocurrency to convert the domestic fiat currency into popular cryptocurrenciessuch as Bitcoin (BTC) or Ethereum(ETH).
- Opening a Wallet Account
A wallet is essential to participate in an ICO. Participating in an ICO requires an investor to send BTC and ETH from their personal, private wallets. If they send it from an exchange, they will not be able to access the ICO tokens since the transfer originates from the wallet of exchange and, technically, they do not own any wallets in an exchange. Note, exchange accounts such as Poloniex, Bittrex, and Kraken are not personal wallets. There are numerous wallets available but the most recommended wallet is MyEtherWallet (MEW).
- Follow the ICO Instructions to Trade
In most ICO trading platforms, a step-by-step guide to participating in the ICO is usually provided. A means of communication is also provided for the latest updates and to answer questions in real-time. Investors should ensure they follow the instructions to participate correctly.
- Exchange to Trade ICO Coins
You should exchange coins to make substantial profits. You can hold coins for the medium- to long-term, depending on your price target i.e. (two times, three times,10x the capital. Alternatively, you could just flip the coin and sell it once it reaches an exchange that usually lists an ICO. Also, if you missed out, an ICO can be bought at an exchange.ICO coins can be listed on various platforms such as Ether Delta, Bittrex, Poloniex, and Binance.
Tips on Trading ICO Coins
After you’ve opened an account, let’s now go over some of the essential tips in trading ICO coins for maximum profits.
Have a Reason for Entering each Trade
You should only start a trade when you know why you are starting and have a clear strategy afterward. Not all traders make gains from trading since the trade is a two-way traffic, i.e. for everyone who benefits, someone else loses on the other side. You should also understand the risk involved in trading and the risk of costly mistakes.
Focus on Coins that are on Reputable Sites
Coins from reputable sites guarantee you of their credibility. Trading in non-reputable coins is risky as they are associated with fraudulent schemes to extort traders of their hard-earned investments. As discussed above, sites such as Top ICO list and ICO Watchlist are renowned for dealing with credible coins.
Target and Stop when Starting a Trade
For each trade, you must set a clear target level for making a profit and more importantly, a stop-loss level for cutting losses where the trade will be closed. It is important to consider several factors when choosing a stop-loss level correctly. Most traders end up taking huge loses because they are unsure of the top level.
Do not put all Your Eggs in one Basket.
To be a profitable trader, you must manage your risk by looking at the peak of the movement. You should look for small profits which will eventually accumulate to large profits. You should spread your risk across your portfolio. For example, you should never invest more than a small percentage of your portfolio in a non-liquid market with very high risk. Also, invest with various cryptocurrencies such as Bitcoin and Altcoins which have inverse relationships, i.e. when the value of the Bitcoin rises then Altcoins lose their value against Bitcoin and vice versa. In this way, you are guaranteed a profit in the volatile market common with Bitcoins.
Secure Bonus Token
Most ICOs tend to offer some sort of bonus to incentivize investors to contribute early. For the LiveEdu pre-ICO, for instance, there was a minimum required investment of $3. However, investing $50 or more qualified you for a bonus of at least 25 percent. Savvy investors should look to get involved in ICOs from the pre-ICO stage. If you can get a bonus, then you will receive extra tokens for your initial investment.
Hold, Sell, Hold Some More
This is a very good idea to increase your investments. For instance, on receiving your tokens, it is wise to exchange them for other cryptocurrencies such as ETC or BTC. The cryptocurrency market is highly volatile and dynamic and you can release a higher return on investment.
Set Goals and Place Sell Orders
Always set your goals by placing sell orders. A successful strategy regarding this is placing very low buy orders. For instance, the Augor coin was down to 25 percent of its value. After a short while, the market recovered slightly and anyone who had low buy these low orders could easily double or triple their investment. Placing buy orders requires special care .Do not wake up when you are far away from the market to find your buy order is suddenly higher than the current market price!
Buy the Rumor, Sell the News
ICO trading requires you to always be informed on the current trends. When major news sites publish articles, it is usually at exactly the right time to actually get out of the trade and you will realize an immense return on investment.
Enjoy the Investment Process
Enjoy the dynamism of the whole investment process and this will enable you to put your ego aside, which is necessary for making profits. The goal here is not to be right on your trades, but to make a profit. Do not waste resources (time and money) to try to prove that you should have entered that trade. Remember, there is no trader who never loses at least sometimes. The equation is simple—get the total profits to be higher than the total losses.
Keep It Simple
While investing in ICOs, it is important to minimize over thinking and the worry of losing your hard-earned investments. Also, think critically about the most suitable ICO investment for you after extensive research.