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Beginner Guide How to Choose an Altcoin to Invest In

Discussion in 'Beginner's Bootcamp' started by xyzzy, Aug 3, 2017.

  1. xyzzy

    xyzzy Master of None Staff Member Super Admin

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    Hey all, this is a quick intro to choosing which altcoins to invest in, inspired by the questions we receive from our members. Let's get started.

    1. The first step is to take a look at our handy dandy Coin Market Cap. Coin Market Cap ranks cryptos based on total market cap. All the market data provided by Coin Market Cap is important: market cap, price, circulating supply, and volume. Market cap is simply the price multiplied by the circulating supply. In classical stock markets, higher market cap securities are less risky, but coincidentally provide less ROIs. Lower market caps are more risky, but allow for greater ROIs. It's also good to remember the basic economics on supply: the higher the supply, the lower the value (and vice versa). The circulating supply is defined by Coin Market Cap as "the best approximation of the number of coins that are circulating in the market and in the general public's hands." This excludes coins that are unable to be used or traded. Finally, volume is the dollar amount of a crypto traded in a period of time (24 hours in this case). Take all these factors into consideration when looking for a coin that you want to invest in that will grow in value over time.upload_2017-8-3_16-46-19.png
    2. For the sake of example, let's say you wanted to invest in NEM (XEM). The first thing you should do is go to NEM's website and read what they are offering. THIS IS THE MOST IMPORTANT STEP. You need to figure out what's so great about the coin you're about to invest. DO NOT blindly invest in something due to someone else's recommendation. Do your own research and ask yourself important questions like:
      • What problem is the alt coin providing a solution for?
      • What value is it adding and who does it affect the most?
      • Who is the team behind this coin and what are their credentials and motivations?upload_2017-8-3_16-52-10.png
    3. Once you grasp the application of the coin and the team behind it, see what people are talking about in relation to the coin. To do this, click on the "Social" tab in Coin Market Cap. You will see tweets and reddit posts discussing the coin. Rummage through these and do your market research on how other traders feel about the coin you want to invest in.upload_2017-8-3_21-3-3.png
    4. Then, of course, the last step is to read the charts. We have a separate thread for how to read charts and chart patterns, and the subject is covered in much more detail in our e-book, Getting Started with Crypto Trading. Following these steps should allow you to make informed investment/trading decisions, rather than just blind hope or luck.upload_2017-8-3_21-5-14.png
    What other steps do y'all take when researching coins? Any other good resources that are helpful in making trading decisions?
     
  2. IQover9000

    IQover9000 Scholar Premium Member

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    Very, very helpful post.
    I've been doing just about everything you've mentioned.
    Looking forward to your ebook.

    I'm always willing to learn.
     
    KarenC likes this.
  3. NewMoney

    NewMoney Contributor

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    Heh funny thing you chose to use NEM as the example, I just bought some recently before the pump in price.

    All noobs need to read this though, when I first started I would look at the price of a coin and be like wtf this coin is only $0.10, buy a few hundred of them and start imagining how much I would make if it was to get to Bitcoin's price in the future before I realized how important the circulating supply was.
     
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  4. Sean Louk

    Sean Louk Scholar Premium Member

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    Good post. I've been kinda doing this already but this is a more organized procedure. I didn't even recognize CMC had a social tab until now...
     
  5. JakeA

    JakeA Contributor

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    I like reading the news and bitcoin forums about what they are saying about the coin. It can give some additional insight.
     
    xyzzy likes this.
  6. xyzzy

    xyzzy Master of None Staff Member Super Admin

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    Many coins will also have Slack groups you can join where the coin developers speak directly to the community. Probably the closest you can get to the horse's mouth :D.
     
    Edwardo and Sean Louk like this.
  7. Douglas

    Douglas Contributor

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    Good post.
    I didn't even recognize CMC had a social tab until now
     
  8. CryptoDoop

    CryptoDoop Scholar Premium Member

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    Really wel explained!
    CMC is really good. besides that i currently installed an app called - BTCnews for IOS, not sure if it's available for Android as well. but gives you pop-ups on lots of news about Bitcoin and Altcoins
     
    MarcusWolfenstein likes this.
  9. cryptospec

    cryptospec Beginner

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    Thanks for the info
     
  10. David Johnson

    David Johnson Beginner

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    This is a 2 min video on two tips to predict coin price surges and how to get in on it before they happen
     
    MarcusWolfenstein and Baklavinho like this.
  11. narghat

    narghat Contributor

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    Thanks for info.
    I had bought many random minor and cheap alt coins on a market just for fun.
    They were not worth a dime before, they not worth a dime now :p
     
    Dale likes this.
  12. xyzzy

    xyzzy Master of None Staff Member Super Admin

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    Hopefully they will be worth a dime soon :).
     
  13. johnrickdalaygon

    johnrickdalaygon Contributor

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    Very helpful information mostly to us newly in crypto. Thanks to you and now I'am able to understand this things.
     
    xyzzy likes this.
  14. CryptoRyuzaki

    CryptoRyuzaki Scholar

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    Thanks for the useful post on alt coins @xyzzy. To a newbie like me, this was extremely useful.
     
    xyzzy likes this.
  15. Cryptorated

    Cryptorated Beginner

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    Such an informative post for beginners. I am new to this market. I want to invest in Bitcoin from next month. Your post is really helpful. Thanks for posting ...
     
    xyzzy likes this.
  16. bertrandsocrates

    bertrandsocrates Contributor

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    These are the most valuable trading and investment insights I've ever come across. A lot of crypto investors and traders I'm listening to are doing their economic activities based on hype, FOMO and compulsion. Would you allow me to advertise our forum for educational purposes?
     
  17. Cryptorated

    Cryptorated Beginner

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    Sure..
     
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  18. armageddon

    armageddon Contributor

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    This is a very useful information for beginers like my friend. I was struggling around to explain and from luck I found this topic. Thx!
     
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  19. xyzzy

    xyzzy Master of None Staff Member Super Admin

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    Of course! Any other topics you'd like to see?
     
  20. armageddon

    armageddon Contributor

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    I would like to see from your point of view: What is the right time to invest in crypto?
     

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