Tag: investing

Categories
Crypto Guides

How DeFi Is Solving The Problem That Bitcoin Always Wanted To?

Introduction 

Introduction 

Introduction 

When you hear the word ‘cryptocurrency,’ Bitcoin is the first thing that pops into your mind. For the longest time, bitcoin has been synonymous with cryptocurrency and regarded as the future currency. In the recent past, bitcoin’s monopoly has been diluted by the entrance of thousands of other cryptocurrencies.

The cryptocurrencies’ primary objective was to serve as an alternative, and down the line, a replacement to the global fiat financial system. This objective has failed to take off. This failure can be attributed to the skepticism cryptocurrencies have faced, which has slowed their role as a legitimate alternative to fiat currencies. DeFi has helped address some of these challenges and help make cryptocurrencies mainstream.

What is DeFi?

DeFi is the short form for Decentralised Finance.  At its core, decentralized finance is the provision of conventional financial services on platforms built on the public blockchain. Specifically, DeFi is based on the Ethereum blockchain platform.

DeFi is heralded as the most suitable alternative to the global financial system. This new enthusiasm about the decentralization of finance is owed to the fact that DeFi is seen as being able to solve the problems that bitcoin failed to solve.

Advancements Made by DeFi

Here are some of the advancements made DeFi, which bitcoin failed to achieve.

Creation of issuance and investing platform

These platforms operate like an ordinary stock exchange. DeFi has made it possible so that cryptocurrencies can be issued and traded like conventional financial securities. The platform brings together broker-dealers, legal advisors, and custodians, who will advise issuers through the process. Furthermore, the platform also makes it possible for asset and investment managers’ proliferation for crypto-based financial assets.

Establishment of a decentralized prediction market

A prediction market is one where individuals can bet on any future occurrences. With decentralized prediction markets, there is no form of censorship whatsoever. Therefore, it offers an incredible opportunity to hedge against future risks financially and speculate on all forms of social events globally.

Growth of open lending protocols

Decentralized open lending championed by DeFi involves the following: collateralization of cryptocurrencies; elimination of credit checks among borrowers; lending and borrowing of cryptocurrencies for trading purposes; and real-time settlement of transactions. The financial inclusion resulting from open lending is unparalleled.

Facilitated the issuance of stablecoins

DeFi made it possible for the issuance of stablecoins by facilitating the auditing of crypto reserves and ensuring manageable volatility of such cryptocurrencies. With DeFi, stablecoins can be pegged on another asset. Categories of stable coins that have been spurred by DeFi include crypto-collateralized stablecoins, fiat-collateralized stable coins, and non-collateralized stablecoins whose stability depends on an algorithm controlling the expansion and contraction of its supply.

Bottom Line

DeFi undoubtedly offers a higher potential for financial inclusion, censorship-free transactions, and improved privacy. Although DeFi is offered as an alternative to the centralized financial system, it is almost impossible to envision an economy where the centralized financial system ceases to exist. Thus, it is prudent to co-mingle the two systems to ensure complementarity, which will tone down the inherent risks associated with either system.

Categories
Forex Market

Buy Now Because It´s ALL Cheap!

“Buy now because it’s ALL cheap!” This is a sentence we have heard hundreds of times and it must be said that the basis is correct. In the markets, you should buy when a stock is cheap and sell when it is expensive, Easy? Yes, but not simple. Many small investors with little travel on […]

“Buy now because it’s ALL cheap!” This is a sentence we have heard hundreds of times and it must be said that the basis is correct. In the markets, you should buy when a stock is cheap and sell when it is expensive, Easy? Yes, but not simple. Many small investors with little travel on […]

“Buy now because it’s ALL cheap!” This is a sentence we have heard hundreds of times and it must be said that the basis is correct. In the markets, you should buy when a stock is cheap and sell when it is expensive, Easy? Yes, but not simple.

Many small investors with little travel on the stock market think as follows:

Stock A a year ago was worth $20, today it’s worth $10. The small investor hastens to attribute this fall in price to the crisis, to the slump of the sector, to the inability of others to see the bullish potential of that multinational, etc… But there’s one thing you don’t take into account, why was that action worth $20 a year ago? It is not because of the crisis, the crisis is a consequence of the reason why it was worth 20$ the previous year, the real reason is a bubble, speculation, or price inflated by a false feeling of growth and well-being, call it what you want.

But well, the small investor is on the sidelines of all this and will make a lethal second step, the world’s biggest stock market fallacy will say:

“Man, a company this big and solid will sooner or later be worth $20 again.”

We could find a few thousand graphics with prices that have been quietly 3 or 4 years that have not been touched and may never touch again. Never fall into this fallacy, prices need not return to the levels of a few years ago, and if they do inflation and opportunity cost will have eaten away your investment in an overwhelming way.

To give you an example I propose a TEST:

Company X is listed at $300, 5 months later it is listed at $100:

  1. a) Buy shares because 100$ is cheap because it is three times cheaper!!
  2. b) Do not act because the stock has lost 66.6% of its value.

Company X is now listed at $50, what do you do?

  1. a) I buy shares because now company X is 6 times cheaper than before and clear, sooner or later we will be back to 300$ or more. I have also read some very positive news for the sector and an article where they leave this company as the one with the greatest potential.
  2. b) You are still on the sidelines, although everywhere you read that this action is a real bargain, Who would be the fool who would not buy at such a low price?

The action keeps cutting prices and now it’s only worth 5$ (Maybe I’m already exaggerating, right?)

  1. a) Man, at 5$, if before it was worth 300$ this is a safe investment, the day that this goes up I will retire directly.
  2. b) There is no sign of the price that the stock wants to go up and even knowing that the stock now “only” is worth 5$ you decide not to buy and let your friends laugh at your poor eyesight to invest in “safe securities”.

Finally, the share price is $1 What do you do now?

  1. a) You laugh and think “But how exaggerated, how will it cost $1 a share that was trading at $300?” “If this is like saying that Google quotes $1!”
  2. b) You’re still on the sidelines, we don’t have anything to buy even though the value has been devalued by 99.9% of the initial value and it looks like it can’t be worse.

Well, gentlemen, the story ends with quotes in the area of $0.2 or what’s the same, the price of 4 chewing gum per share.

Any one of you who has opted for option A in any of the cases would be almost bankrupt right now. Imagine the friend who bought 10000 shares at 1$ (10000Acc * 0.2$= 2000$). It has lost 80% of the money, nobody can stand a loss of this size, and surely in the 50-60% of losses, most of us would be out of the market complaining about the crisis, the governments, and the manipulation of the market.

I’m no longer talking about who bought for $100 or $50 by making a “long-term investment,” you can imagine that he will never see his money again. Well, maybe I was a little over the top when I said that the price could drop from $300 to 20 cents, something like this would never happen on the market… Would it? Remember, always use a system with technical foundations and operate with knowledge, never open an operation if you do not have clear where to place your Stop Loss.

Categories
Crypto Daily Topic

Algorithmic Trading Strategies Explained

Algorithmic trading is an advanced form of trading that uses a computer program to automate the process of buying and selling of either stocks, cryptocurrencies, FX currency pairs, options, or futures. Unlike trading assets directly through a broker, algorithm trading is more accurate and result-oriented as it is designed with a predefined set of instructions that guide it on how to execute trades.

Algorithmic trading is an advanced form of trading that uses a computer program to automate the process of buying and selling of either stocks, cryptocurrencies, FX currency pairs, options, or futures. Unlike trading assets directly through a broker, algorithm trading is more accurate and result-oriented as it is designed with a predefined set of instructions that guide it on how to execute trades.

Algorithmic trading is an advanced form of trading that uses a computer program to automate the process of buying and selling of either stocks, cryptocurrencies, FX currency pairs, options, or futures. Unlike trading assets directly through a broker, algorithm trading is more accurate and result-oriented as it is designed with a predefined set of instructions that guide it on how to execute trades.

The trades are executed at the exact price and trade volume. This helps eliminate the time lag between placing and execution of the order. Also, all trades are free from human emotions, which may otherwise make a trader give up on profitable trade due to fear or make losses in pursuit of profits. Although the trades are executed automatically, the algorithms used have to be generated by traders in line with their investment goals. The traders key in variables like price, volume, time, and other indicators, which trigger a buy or sell order when specific conditions are met. 

Common Algorithm Trading Strategies 

Here are some of the most used automated trading strategies that you can explore: 

#1 Momentum-based/ trend algo 

Momentum and trend is the simplest algorithm trading strategy that aims at capitalizing on a long-running market trend. The idea is that if the market has been moving in one specific direction, upwards or downward, it’ll continue to do so until it’s affected by opposing factors that change its trajectory. A simple momentum-based algorithm, for instance, will invest in the best performing indices based on their performance within a specific duration of time. A more complex strategy blends momentum over time, making use of both absolute and relative momentum indicators. For instance, when the 30-day moving average goes above the 80-day moving average, a buying order is executed; conversely, when the 30-day moving average goes below the 180-day moving average, then a selling order is executed. 

As such, momentum algo trading makes use of technical indicators such as the historical price data and trading volume to execute orders. Further, the strategy allows traders to rebalance the system on a weekly, monthly, quarterly, or even yearly basis. 

#2 Statistical Arbitrage trading 

Statistical arbitrage is an opportunistic trading algorithm strategy that capitalizes on the price differences of assets as listed on various exchanges or markets. For instance, say a security trades at $10 on exchange Y and goes for $9.86 per share on exchange Z. The algorithm will identify this price difference and take a long position of the security in exchange Z, then quickly takes a short position of the same amount of the security on exchange Y. 

To realize reasonable profits using this trading strategy, you need to execute high trade volumes frequently since the price differences are almost negligible. However, for the cryptocurrency market, the price differences can be significant due to the difference in demand for crypto within a specific geographical location. For instance, you can buy low-priced crypto from your local exchange and sell it in an overseas exchange where the demand is higher. 

#3 Mean reversion 

Mean reversion strategy can be used in conjunction with the momentum/trend algorithm to avert losses when the market trends change drastically. Here’s how – while momentum strategy assumes that an asset’s price will continue moving in the same trajectory as it’s currently trending, mean reversion, on the other hand, works under the principle that an asset will always return to its mean value at some point in time regardless of its current high or low trend. The idea here is that the price of an asset will always go back to its historical average price after extreme deviations. Often, these deviations are caused by overselling or overbuying of the subject asset, influencing its price movement.  

When using the mean reversion strategy, the algorithm seeks to identify the upper and lower price limits of an asset. When the price is below the lower limit, the algorithm takes a long position and sells when the price goes above the higher limit in anticipation of the price returning to its average value. 

#4 Weighted average price strategy 

In this strategy, large orders are executed based on either volume-weighted average price or time-weighted average price. The strategy can be executed manually, but the large orders have to be released in small parts, which cannot be humanly possible with as much efficiency and accuracy as that of an algorithm. Besides, to make above-average profits, the orders have to be executed as close as possible to the volume-weighted average price or time-weighted average price to reduce the impact on the market. 

#5 Sentiment analysis 

Sentiment algorithm trading is quite simple as it doesn’t rely on complex mathematical models to execute orders. It involves examining the general market movements based on the opinions of major stakeholders and traders’ behavior. As such, the algorithm analyzes all types of data from media reports, to social media, to earning reports – and uses this information to predict future price movements upon which orders will be executed. 

#6 Building a custom algorithm trading strategy 

There are various websites such as CryptoHopper and Bitsgap that offer a variety of trading algorithms which you can then connect to the exchange site of your choice. But, you still have an option to design a unique trading strategy, one that works with your understanding of the market and investment goals. To build an algorithm trading strategy, you need to have proficient programming skills in addition to a good understanding of the quantitative and fundamental analysis of the market. 

Once you have these skills, all you have to do is feed your code input variables such as price, trade volume, and other variances that will trigger the execution of orders. Note that, before using your strategy to trade on the real market, you need to run a backtesting program that involves testing the performance of the strategy using historical data. If the strategy brings good results, you can confidently use it to trade in the real market. 

Conclusion 

Algorithm trading strategies are ideal for both novice investors and traders who are yet to understand the factors influencing market movements. Even the experienced traders can also benefit from the accuracy and efficiency of algorithm trading strategies, which ensures that they don’t miss out on any trading opportunity. However, it is vital to understand that each strategy works differently, and therefore it’s advised to choose one that meets your investment goals. 

Categories
Crypto Daily Topic Crypto Education

The Bitcoin Halving Aftermath – Trends and Implications

The third Bitcoin halving event, which happened on May 11, brought mining rewards from 12.5 BTC down to 6.25 BTC per block. This halving raised many questions, mostly on the topic of how the price will react to the halving and if Bitcoin has already “priced in” the halving.

The third Bitcoin halving event, which happened on May 11, brought mining rewards from 12.5 BTC down to 6.25 BTC per block. This halving raised many questions, mostly on the topic of how the price will react to the halving and if Bitcoin has already “priced in” the halving.

The third Bitcoin halving event, which happened on May 11, brought mining rewards from 12.5 BTC down to 6.25 BTC per block. This halving raised many questions, mostly on the topic of how the price will react to the halving and if Bitcoin has already “priced in” the halving.

Many analysts have made their predictions, ranging from Peter Shiff’s bearish prediction of Bitcoin going to 0 due to it having no underlying value and utility, all the way to some analysts who called for $1,000,000 Bitcoin. However, the market should pay attention to the short-term price implications and trends, as well as tools that can measure them.

What does the public say?

We can have a general representation of what the public thinks about when it comes to the Bitcoin halving by looking at Google Trends.

While a brief check of the term “bitcoin halving” will show an enormous increase in interest, we don’t know where that interest is coming from (in a non-geographical sense). We have to dive deeper and see if the ones interested in the halving are existing investors or rather new ones.

If we take a look at the number of searches for the terms “buy bitcoin” and “sell bitcoin” we can see that there hasn’t been much of an increase from before the halving, though some difference exists (“buy bitcoin” and “sell bitcoin” charts look almost exactly the same, so there is no need to show both).

We can also spot one more difference between the two pictures above, and that is countries with the most interest in these terms. While the term “bitcoin halving” sees most interest from highly-developer countries such as Switzerland, Netherlands, and Austria, “buy bitcoin” and “sell bitcoin” terms see the greatest interests from less developed countries or countries that have inflation problems.

We can also see that the Fear and Greed Index does not show any signs of a mega-optimistic market that could spark up an explosive price increase that happened after the first two halvings either.

What does all this mean?

This analysis brings us to the conclusion that, while there is an enormous interest in the bitcoin halving itself, it mostly comes from already existing cryptocurrency enthusiasts. Meanwhile, people that are interested in buying and selling Bitcoin are mostly coming from unstable regions and use Bitcoin as a “monetary escape” from their native currencies’ inflation rather than as an investment opportunity, which got that much better due to the halving.

This analysis does not claim that there is no new interest in Bitcoin, but that people should be conservative with their short-term predictions, as the crypto market will most likely not see such an explosive price increase as it has seen after the previous two halvings. However, the price is bound to increase over time due to the natural laws of supply and demand, though that price increase may be slow and gradual.

Today’s crypto market major flaw

While the Bitcoin market has its ups and downs, it prides itself on being revolutionary, as it strives to unite the world under one decentralized deflationary currency with a fixed supply. However, financial institutions such as the Chicago Mercantile Exchange have created the Bitcoin Futures market, which may prove to be detrimental to the future of cryptocurrencies.

While these financial institutions are well-known and bring more interest to Bitcoin, they trade Bitcoin futures that do not settle in Bitcoin, meaning that they trade thin air that is correlated to Bitcoin through their platform. This causes a major problem to the actual Bitcoin community as it essentially “prints” Bitcoin and creates a place for infinite supply as well as price manipulation.

When talking about the Bitcoin halving, its main purpose is to act as a deflationary force. However, with Bitcoin futures not having to care about the Bitcoin supply whatsoever, the deflationary effect of the Bitcoin halving gets drastically reduced.

How to approach Bitcoin investing?

The cryptocurrency market is a space where people invest their money because of two main reasons:

  1. Speculation (they want to leverage the volatility of the markets and make a profit and do not care about Bitcoin’s “mission”)
  2. Support (they truly believe in the technology and want to make a profit by “betting” on the future)

In both cases, the fundamental reason for investing in the market is profit. Miners mine for profit, traders trade for profit, everyone is here to make a bit of money. However, many people get stuck in a certain mindset (which is especially the case with Bitcoin bulls or bears) and stick to it no matter the market circumstances, which ultimately makes them lose money in the long run.

People should approach crypto trading and investing with caution and without emotion. They should assess the circumstances and use the tools at their disposal (as well as the market sentiment) to create the best prediction of where the market will move. They should also expect less and less explosiveness as time passes. However, the Bitcoin halving is certainly a solid indicator of where the price might move in the future, simply due to the natural “laws” of how self-sustaining markets work.

 

Categories
Crypto Daily Topic

How to Build a Long-term Cryptocurrency Portfolio

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

Historical data shows that the crypto market has returned over 900% since 2017. Of course, the journey hasn’t been all smooth, as evident from the often unprecedented dip and high trends of the market. But in the long haul, its valuation has been increasing as more investors join the trade. 

With this in mind, the idea of targeting long-term gains is more appealing than chasing short-term profits, which are often not as much as the former. 

While investing in the long-term promises greater returns, it should be noted that the method requires patience and keeping your emotions under check in all market tides. To achieve this, you should only invest an amount that you can live without; so no matter what happens, you won’t have the urge to sell your cryptos to sustain yourself. Also, having a cushion to fall back on will prevent you from panic-selling. 

Why Should you Consider long-term Crypto Investment? 

Foregoing the short-term profits in favor of long-term gains is not only highly rewarding but also less risky. As such, you don’t have to worry about missing out on leveraging into a position or timing the market.  

Day trading/short-term investment is characterized by numerous transactions whose fees can quickly accumulate and eat into your profits. But when investing in the long-term, all you have to do is pick a few cryptocurrencies and then wait. This helps reduce the number of transactions, saving you the fees that come with active trading. 

Indicators of Long-term Value

Building a long-term portfolio boils down to the type of digital currencies you invest in. With over a thousand cryptocurrencies in the market, it can be overwhelming to choose one that pays off in the long run. Here are a few factors to consider when choosing cryptocurrencies for your long-term life portfolio: 

1) Market Cap

Generally, the market cap of a digital coin is its trading price multiplied by its circulating supply. Usually, cryptos with a higher market price are less volatile compared to those with a lower market cap. 

Large market cap coins like Bitcoin and Ethereum dominate the crypto market, which is an indication of their long-term viability. Even in bear markets, these coins tend to weather the storm and keep their value relatively higher. 

At the same time, it doesn’t mean that you shouldn’t invest in cryptos with a lower market capitalization. In fact, such coins may eventually outdo the dominant coins in terms of returns since they are still in the budding stage.

However, the lower-cap cryptos tend to be risky since not all of them grow exponentially as anticipated, with some even being fraud projects. As such, it makes sense to scrutinize the viability of lower-market cap coins before investing in one. 

Besides their potential to offer great returns, coins with a lower market cap are an ideal diversification tool. Rather than allocating all your funds to the dominant coins, you may consider allocating a certain percentage to the lower-market cap coins. But first, you need to assess your risk tolerance. In this case, if you are a conservative investor, allocate a higher percentage of your funds to coins with a higher market cap, and the vice versa is true. 

2) Utility Value

The true measure of a coin’s ability to survive for long in the market is whether it has a real-world user base or a concrete project backing it up. 

A coin’s utility value can be determined by its user base. For instance, Bitcoin has the largest number of users in the crypto market, thus holds more utility value compared to a less used digital coin. In the case of ETH, the coin derives its value from the Ethereum blockchain, which allows developers to build decentralized apps. Other cryptocurrencies with real-world use include Stellar, Ripple, and WanChain.

Other worthy considerations to help you determine a coin’s value include its governance and market opportunity. In this case, a coin’s governance means a solid framework regulating its supply, for instance, the mining process of the coin. Market opportunity, on the other hand, refers to a coin’s ability to provide a solution to the problem it intends to solve. 

3) Industry

The industry in which a coin is tied to not only predicts its long-term growth but also offers an opportunity to spread your risk. Apart from Bitcoin, most of the cryptocurrencies are designed to offer solutions to a particular industry. For instance, Vechain and Waltonchain intend to improve the supply chain industry. If, from your analysis, you believe that the two coins will steadily increase in value, you may consider investing additional capital in them. 

You can also spread your investment across other coins linked to the computing, networking, and financial industries to achieve a diversified portfolio. 

Don’t Be Too Rigid 

Now that you understand the essential steps in building a long-term portfolio don’t confine your earning potential to the structure of your portfolio. This means that you don’t have to completely stay away from short-term profits. When you spot a rising trend early enough, be sure to sell part of holdings to make a profit. 

It’s easy to be carried away by the quick profit to the point of disrupting your long-term portfolio. For this reason, you may consider adding a few low priced coins in your portfolio. These coins tend to offer better short-term gains, especially in a bullish market. Most importantly, adding them into your portfolio means that you won’t have to sell your long-term holdings in pursuit of the quick rewards. As such, you won’t compromise your long-term goal. 

Conclusion 

While the above tips will help you build a long-term portfolio, you should note that the crypto-market is highly volatile. To keep up with the trends, it demands that you regularly track and rebalance your portfolio in line with your objectives. Also, it’s a good idea to keep tabs on market events such as government laws in your jurisdiction regarding cryptocurrencies. These events usually have an impact on price movements. 

Categories
Crypto Videos

What Happens After An ICO? – Get Rich Quick Or Scam

https://youtu.be/8lGywGdgjLw

What happens after an ICO
Initial coin offerings became an extremely popular subject as people saw the crowdfunding and profit-making potential is brought to the market. Companies create

https://youtu.be/8lGywGdgjLw

What happens after an ICO
Initial coin offerings became an extremely popular subject as people saw the crowdfunding and profit-making potential is brought to the market. Companies create


What happens after an ICO

Initial coin offerings became an extremely popular subject as people saw the crowdfunding and profit-making potential is brought to the market. Companies create an ICO where they sell their tokens in exchange for funds. On the other hand, investors give their funds to the ICO project as they believe that it will solve a certain problem or simply bring a profit. The creation of ICOs meant that companies could finance a project based on just the idea.

ICO stages

ICOs usually have more than one stage. The first one is private and inaccessible to the public in most cases. It is available only to the big investors and companies that are willing to support the project. They get special deals as well as bonuses depending on the support they are willing to provide, and the amount of money they are willing to invest.

The Pre-ICO stage is next in line. In this stage, early investors get a chance to acquire the biggest bonuses available to the public. After that, the regular ICO can be divided into a few stages, with each one giving different bonuses, depending on the time of investing (the earlier, the bigger the bonus), and/or based on the amount invested (which is rarely the case).


ICO caps

Most ICOs have soft and hard caps to measure the funds required for their projects. The soft cap is the minimum amount of investment required to be acquired to even start the project. If the ICO doesn’t manage to get enough starting capital, they shut down the project and return the money to the investors.
Hard cap, on the other hand, is the polar opposite of the soft cap and represents the maximum amount of money an ICO needs. If reached before the offering is finished, the ICO stops as all the required funds are acquired, and no more funds are needed. The best project ideas tend to sell all of their available tokens in a matter of minutes.

ICO aftermath

After a project finishes crowdfunding through an ICO, the second stage of a project starts. The acquired funds are used to pay for project development or improvement (if the project had any form of a product before the ICO), marketing, and branding the idea that the ICO was based on in the first place.
The first move is, in most cases, to list the token on as many exchanges. By doing this, projects quickly enable profit-making from their tokens as the invested funds grow in market value, turning profits for the investors and making them happy, as well as making a profit to the project managers and developers, so they can have more funds to work with.
Buying into an ICO is much like investing in a company through a stock market. The main distinction is that a company that is listed on a stock market is most likely well-developed already, while an ICO represents an investment into an idea.
That idea is described in a whitepaper. When time is added to the equation, we get a roadmap for the project. The roadmap includes the project’s schedule of improvements, public and official launching of the product, and major exchange listings of their coin or token. If the project wants to be successful, they have to keep up with their timeline, or the investors will not be satisfied, therefor reducing the market price of the coin or token they bought.


ICO regulation

Many countries have decided to take a look at ICOs, how they operate, and how they should be regulated after the 2017 ICO craze. Many of the ICOs were just money grabs or scams while others were decent projects with good visions, but unable to deliver on their vision properly.
Even though the whole idea of cryptocurrency is based on decentralization, regulation can be a good thing, especially in the ICO sphere. Some countries, like China and the USA, have made strict regulatory actions towards ICO. However, both of these countries are now easing up on regulation and trying to come up with a solution on how to utilize ICOs.

KYC – know your customer

KYC laws were introduced in 2001 in the USA as part of the Patriot Act, which was passed after 9/11 to provide a variety of means to deter terrorist behavior. The section of the Act that pertained specifically to financial transactions added requirements and enforcement policies to the Bank Secrecy Act of 1970 that had thus far regulated banks and other institutions.
There are many fully legal reasons to invest in an ICO, ranging from belief in the utility of a new piece of cryptocurrency infrastructure to speculation on a coin’s rising value. Outside of these legal motivations, there are also illegal practices such as laundering fiat currency through ICO projects. Unfortunately, the ongoing lack of regulatory clarity and regulation means that people who wish to invest in a project for its intrinsic utility to disrupt established industries for the better feel they risk being treated as money launderers.
This is why the KYC system is what all of the ICO investors usually have to go through to be able to invest in an ICO. KYC is completed by submitting your information (name, address, country of origin) and then providing one or more documents to prove the information provided.

Final word

Investing in ICOs can be highly lucrative, but only if the investment is well thought out, and the project is successful. Much time has to pass until an ICO proves its worth, so investors need to have a lot of patience. The roadmap is the holy grail of investors and should be considered as such by the developers, too, for the sheer positive thinking in the times of waiting for the project to come to life.

Categories
Ichimoku

The Three Principles – Price Principle

The Three Principles – Price Principle
This will be the shortest article over the three principles, mainly because it is the same as many other Western styles of price projection.

Price Principle - N Price Target
Price Principle - N Price Target

The Three Principles – Price Principle
This will be the shortest article over the three principles, mainly because it is the same as many other Western styles of price projection.

The Three Principles – Price Principle

This will be the shortest article over the three principles, mainly because it is the same as many other Western styles of price projection. I do not need to go into any significant detail here. If you want further detail into this method, I would suggest Nicole Elliot’s book, Ichimoku Charts – An Introduction to Ichimoku Kinko Clouds (2nd Edition).

Elliot identified four price target methods from Hosada’s work: V, N, E, and NT. Elliot does mention that she (myself included) does not use this analysis and relies instead on traditional Western methods. However, she does cite that for investors and traders with short time horizons that this Japanese method of the Price Principle is superior to many techniques.

 

V Price Target

V = B + (B – C)

Inverse: B – (B+C)

Price Principle - V Price Target
Price Principle – V Price Target

 

N Price Target

N = C + (B – A)

Inverse: C – (B + A)

Price Principle - N Price Target
Price Principle – N Price Target

 

E Price Target

E = B – (A – B)

Inverse E: B + (A + B)

Price Principle - E Price Target
Price Principle – E Price Target

 

NT Price Target

NT = C + (C – A)

Inverse NT: C – (C – A)

Price Principle - NT Price Target
Price Principle – NT Price Target

 

 

Sources: Péloille, Karen. (2017). Trading with Ichimoku: a practical guide to low-risk Ichimoku strategies. Petersfield, Hampshire: Harriman House Ltd.

Patel, M. (2010). Trading with Ichimoku clouds: the essential guide to Ichimoku Kinko Hyo technical analysis. Hoboken, NJ: John Wiley & Sons.

Linton, D. (2010). Cloud charts: trading success with the Ichimoku Technique. London: Updata.

Elliot, N. (2012). Ichimoku charts: an introduction to Ichimoku Kinko Clouds. Petersfield, Hampshire: Harriman House Ltd.