How to Pick & Trade the Next Profitable Altcoin: An Insight into What Goes Through my Mind

Congratulations on owning some Bitcoins and being a part of this Global Revolution! If you don't already own one, buy one easily from an exchange like,, or from someone near you at Once you own Bitcoins, you can easily trade them for any available Alternative Cryptocurrency from an altcoin exchange like Cryptsy. I like to use Cryptsy because they have so many available coins, and I also find them to be quite reliable.

So you've been seeing tons of people making money trading Altcoins, while you've been losing tons of Bitcoins buying high and selling low? Whether you're simply frustrated with your "bad luck", or just want to learn more & make more Bitcoins daytrading, I'm here to help! So here's an easy-to-understand guide to picking and trading Bitcoin and Altcoins profitably, and of course, more essential daytrading tips to help us all become profitable cryptocurrency traders.

I know you're all eager to make money, but keep in mind that nothing comes for free and I can only help you so much. Just because you've made 5 good trades doesn't make you a profitable trader, and neither does making 5 bad trades necessarily mean you're a lousy trader. Anyone can flip a coin and see 'heads' 5 times in a row. What we want to look for is consistency, and to do that you'll have to start forming Your Own trading strategy. Before I go on, keep these following points in mind when building up your personal Trading Strategy:

  1. Learn the basics; read my last few blog posts, and also other trading resources to learn more about Technical Analysis and other trading tips. "I don't think that you can write music if you don't know how to play an instrument. You have to know the basics, then you can go forward." ~Alber Elbaz
  2. Discipline is key; be patient and build up a fundamental understanding of the markets, and more importantly, hone that keen trading sense of yours. We all have it in us, just takes a little discipline and practice.
  3. Markets are ever-evolving; don't treat it like its static because past actions are not an indication of future performance. Always be open to and learn from other's opinions, be objective about it, and constantly adapt and improve your strategy.
  4. Lazy = poor; Nobody can help you but yourself, don't expect to be spoon-fed. Be an active learner and constantly seek new ways to improve your strategy. Reflect on what went wrong and don't make the same mistakes again. When in doubt, ask Google.
  5. There's only so much you can learn from reading; you don't learn how to ride a bicycle by reading a book, go out there and put your knowledge into practice. Start small to test your strategy and build your confidence.

How to Find new Altcoins?

So the first thing is to actually find new altcoins and to read up more about what it has to offer. To begin with, I always browse through the Alternative Currency announcements page on Bitcointalk to see what's popular. All new coins are definitely posted here so you shouldn't miss anything, and since threads with the newest post always appear on top, you usually don't have to look further than 2 pages. Things to look out for include the added value a coin brings (as I'll explain more in the next section), as well as the popularity and virality of the altcoin (i.e. high number of pages in a short time).

Another place to look at is Cryptocointalk where you can find a long list of altcoins available, sorted according to new coins or by algorithm. This list is not completely updated, but is organized much better if you want to find out more about a particular coin.

Secondly, you also want to cross-check your information about these coins on social media sources such as Reddit and Twitter. Start off on Reddit by doing a search for the coin, as well as looking at the number of subscribers on the altcoin's subreddit. I bought a ton of Dogecoin at 30 satoshi when I first saw the /r/Dogecoin community grow to 2500 subscribers 1 week after launch, which was way more than most other coins at that time (most new altcoin subreddits get less than 50 subscribers in 1 week). Dogecoin has even surpassed Litecoin to be the second largest cryptocurrency subreddit with over 50k rich shibes right now. I'd love to go on talking about why Dogecoin has much future, but I'll leave that for another post.

And of course, search for the altcoin on Twitter and see what other people have to say about it. If you aren't already on Twitter, I must say that you're missing out on the best available source of cryptocurrency news. Start following a few users like those listed in the Tweet below, and also follow my Bitcoin Trading Tips and Altcoin Trading lists where I try to compile the best Cryptocurrency trading advice available on Twitter. Leave a comment below or tweet me @onemanatatime & tell me who else should be on those lists!

And yes, that's all. I probably use less resources than most of you, but what's important is quality over quantity. It's crucial to learn how to spot a needle in a haystack. Make use of power of Social Media (a.k.a. Word-of-mouth on Steroids - Gary Vaynerchuk); ask the right questions, and you'll always get the right answers.

What to Look Out For?

With so many alternatives out there, we really need to be picky when choosing the next altcoin because you don't want to spread yourself too thinly. Firstly, clones of existing ideas/coins are mostly not worth holding for anything more than the short-term. In this sense, there's a few different kinds of coins with their respective leaders in each category, each with their own pros & cons:
  1. Bitcoin; SHA-256.
  2. Litecoin; Scrypt.
  3. Quark; Multi-algorithm for higher security.
  4. Dogecoin; Memecoin, also Scrypt.
  5. Nxtcoin; 100% Proof-of-Stake coin - no mining involved.
  6. Ethereum; A Layer/Protocol separate from Bitcoin, called Bitcoin 2.0 by some.
  7. Mastercoin; Not really an altcoin, more like a Layer/Protocol on top of Bitcoin.
  8. Vertcoin; Anti-ASIC, using Adaptive N-factor in Scrypt.
  9. Peercoin; Proof-of-Work + Proof-of-Stake combination.
While their blocktimes do not really make much difference, anything below 2.5 minutes is good enough, and anything below 30 seconds is worth looking at. Special technical differences make or break an altcoin, and can really shine when they add sufficient value ontop of Bitcoin; you can see much interest in Anti-ASIC coins, Layers, 2nd generation POS coins, and (less so) Multi-Algorithm coins. Another interesting to note is that many altcoins are now updating with Kimoto Gravity Well (read the comments here for more), tl;dr difficulty readjusts after every block, improves difficulty adjustment and makes mining fairer, more secure, and smoother.

I just want to add that not all pre-mines are bad. As long as the pre-mine is well justified and actually carried out by the developers, I think it helps altcoins to better market themselves and build up a community. On the other hand, some developers use this as an excuse to insta-cash out early, so be weary. Secondly, although there's a lot of negativity surrounding insta-mines like QRK, I'd just like to point out that these coins actually help make prices much more stable more quickly, and will not be subjected to volatility as much as Bitcoin. Withholding judgement, these two instances can be seen as simply different attempts to tackle the rampant problem of unfair distribution in cryptocurrencies.

Lastly, besides the technical innovation and specifications itself, it's also important to analyze a few other Fundamental factors that may affect the price of an Altcoin. It's also important to recognize that these factors usually take longer to reflect in prices:
  1. Branding & Marketing. The most obvious case for Branding is Dogecoin, which literally went viral just because it was already a popular online meme. On another note, I also like the WorldCoin branding, and more so their marketing efforts. Although prices have been dipping for WDC, keep in mind that so has every other altcoin (Bitcoin up, altcoins up; bitcoin down, altcoins down).
  2. Community. This includes popularity among public, general consensus about the altcoin, as well as the supportiveness of the community. The last bit is important, and a prime example is Dogecoin's altruistic community, as well as the growing market for Dogecoin services. With no other coin can you find such a large & liquid pool of people waiting to sell all kinds of goods/services for crypto.
  3. Developers. Just like how technical specifications make or break an altcoin, developers are the backbone of the whole cryptocurrency's ecosystem.
  4. Infrastructure. With a good team of developers and community, infrastructure around the altcoin will quickly follow. I like to take Dogecoin as an example because they have grown so much and so quickly, but you'll see it pay off in the sense that the community and developers are working together to build all kinds of services for the Dogecoin ecosystem; USD exchanges, marketplaces, movements, apps etc.
Where to Buy?

The only way to get new coins pre-exchange is through P2P trades. High risk of getting scammed. Don't trade with new users, always trade with trusted users and gain a reputation until you can get others to send first. I've been scammed 3 times and had to learn the hard way. Best way is to totally avoid this method unless you're really dying to get a coin pre-exchange.

First few exchanges that adopt a new coin vary, but they're usually the smaller ones. Very high risk. Always try to leave funds in there for as short a time as possible. I.e. freshmarket hack etc. Look for the relevant information on the altcoin's Bitcointalk thread, Google it, or ask someone on Twitter.

Second exchanges, and they take up new coins pretty quickly too, include sites like and Thirdly, the biggest exchanges include sites like ValutOfSatoshi, Cryptsy,, BTER. For a (updated but not full) list of which exchanges trade a particular altcoins, use

For Daytrading pairs of Bitcoin/Litecoin/USD, I highly recommend using Bitfinex where you can Margin Trade, i.e. Short sell or Long buy without actually having to own USD. Read up how on my previous blog post, and create an account with me to get 10% off trading fees for 30 days. If you have already created an account, but haven't used a referral code, you can still enjoy the discount by emailing and quoting the code 'aQBHcxVPzj'.

When/What's a Good Price to Buy/Sell?

For new altcoins, and especially clones, all you'll need is to find a good price to buy, since there's no charts for you to do any TA yet. I found a pretty useful formula for calculating a fair price, and have found it to be pretty accurate. Use it, let me know what you think about it, and how we can improve it to apply to different coin types etc. by Tweeting me or leaving a comment below.

Just to clear things up, by total supply, I mean maximum supply. Of course, this varies by coin type, but is a good starting point for calculating a fair value for a new altcoin. For a more accurate estimation, also compare to similar coins "of the same type", or coins with similar maximum quantities. Example:
  • Dogecoin & Kittehcoin - Memecoin
  • Quark & Particlecoin - Multi-algorithm
  • NXTcoin & NEMcoin - 100% PoS
  • Mooncoin & Astrocoin - Based off the same "to the moon" philosophy
Secondly, like it or not, you'll have to learn more Technical Analysis basics if you really want to find the sweet spot for entry/exit prices. It'll also help to have a better understand of how markets in general work, and apply the knowledge to your crypto trading.

How to Trade?

Obviously, the most important rule in trading is to "buy low sell high". Unfortunately, that's usually harder to execute than it sounds because of panic and greed. Haven't you learn enough from bubbles? Whatever goes up must come down. Markets will always look for a correction after a big spike. Don't chase the bubble! EVERY parabolic curve/rise is a bubble, and a chance for you to sell your altcoins for a profit. Just wait for it and always set sell positions ready to eat up those buys.

Although learning all the basic trading theories are important to give a more wholesome idea of chart reading, I really only use support/resistance to judge price levels. If you want to get more in depth into Technical Analysis, here's two very good resources and must-reads for people working in hedge funds & the financial industry (courtesy of @ActualAdviceBTC):

If you have the time, also invest some of it reading the whole of my blog, and also this 6 part series on Technical Analysis for Beginners from a fellow cryptotrader, ClydeMachine.

Trading Tips

#0: Don't join Pump & Dumps, period.
For someone to make money, someone else has to lose. Don't be the one caught with the short end of the stick.

#1: Always trade with a plan. Before entering a trade, plan not only your entry but also your exit. Don't fall into the trap of panic buying/selling. Once you get over that, everything will start to come together.

#2: Discipline. Be patient and wait for good setups. Plenty of opportunity everyday, don't spread too thin. On a side note, I can't wait for a margin platform for altcoins to be built. If you're building one, hit me up and let see how we can work together (I'm a Business Development and Online Marketing Major).

#3: Money management. Don't spend more than 5-10% of your entire BTC portfolio on a single Altcoin, unless you're damn sure it's gonna be profitable in the mid-long term.

#4: Understand human psychology. Here's a good 5 part series to get you started: