Crypto: The High Volotility Stock You Need To Invest In

Obviously stocks, bonds, and mutual funds are great for growing your wealth but even those have drawbacks and sometimes just don't provide the return you're looking for. I've covered a great deal of this info on a previous post so you can check that out here.

When it comes to stocks, however, there are some high reward options that you need to consider before investing all your money into "super safe" accounts with minimal returns. Now you can find some stocks that provide great returns either by way of dividends or just capital gains based on how volatile they are, but few can match crypto.The option in question for this post is going to be cryptocurrencies but leave a comment if you want to learn about some more great options in a future post!

I'm sure many of you have heard of cryptocurrencies before like Bitcoin, Litecoin, and Dogecoin but what is it, how is it used, and why is it such a great investment?

What Is It

Essentially, cryptocurrencies are a means to transfer funds between people. Much like the US uses the Dollar Bill and the EU utilizes the Euro, cryptocurrencies provide a vehicle for value to be transferred from one account, to another. In general, cryptocurrencies are traded through the internet in exchange for other cryptocurrencies, products, services, or exchanged for fiat money (like the US Dollar)

I won't really go to much into how the currency works but I will leave a link. I am just more into the money making part as I'm sure you are too. I'd probably skip through the explanation part if I had clicked on this blog too!

But, I do think that you should understand just a little bit about how it is valued...

Just like any other stock, the value is determined by the amount people are willing to pay for it and how much people are willing to sell it for. Classic supply and demand right?

"This is a basic economic principle. If a cryptocurrency has a high token supply with little demand from traders and users, then the cryptocurrency’s value will drop. Conversely, if the supply of a particular cryptocurrency is limited and the demand is high, then the value of the coin will increase."

Exactly, I pulled that quote from another website, you can click here to read further, he explains the inner movements of the currency better than I ever could. 

Anyway, let's get into why it's so great and how you can make a TON of money trading it. But first, you do need to understand its fluctuations a little bit.

How To Make Money

Here's the part you've all been waiting for! How can you make money trading it. Well, the extreme volatility of the stock certainly helps along with the fact that it trades 24/7. Here we will discuss the strategies and tactics you can use to OWN the market and grow your investments!

As you can see from the image of Dogecoin's movements, it is quite sporadic but that is exactly what we're looking for. In a day, you can earn extreme returns by buying at the right time. Now, I chose Dogecoin as an example because this is what I started trading in because of the exceptionally low price. It makes the perfect starting point to get introduced because the risk is low as the price is so minimal but the volatility is still there. In fact, trading large amounts of Doge can even yield greater returns than Bitcoin.

This movement is just over a 1 hour period and you can see that, although it is a small number, when multiplied it can yield some pretty fantastic returns. Not only that, it is fairly easy to calculate and predict its movements with one very simple method.

First, we are going to check out a larger view so we can see it a little better:

So we are going to look at both the daily view (Top) and the hourly (bottom) to get a good idea of how the stock is moving. This will help you decide when to buy, sell, and hold to maximize your profit by trading Dogecoin. This process will work with pretty much all other cryptocurrencies as well as they all move similarly...

 We will start by examining the daily movements.

As you can see, the green dots represent the valleys on each movement and a line can be drawn in relation to them to see their general trend upwards or downwards.

The line begins as a pretty level but still positively sloped line until it gets to around the point where the orange line intersects. This sharp movement should throw up a huge red flag for you that you need to begin preparing to sell.

This is because, after studying the stocks movements for quite some time, sharp increases or decreases almost always lead to a contrary movement or movement in the opposite direction within the next hour. As you can see, the stock begins to rise rabidly and then begins to fall as it reaches the green circle. This is a great time to sell as it will likely fall to a point that will allow you to capitalize on that sale with a lower priced buy.

In this case, the next time to buy would be within the second green circle. Now these areas can get a little tricky because the area of turbulence, I have noticed, can go either way when it comes to predicting the next movement. However, you can still see that the general movement of the stock is positive when you look at the two valleys outlined by the green dots. This will allow you to assume that the stock will continue to increase (which it does).

We will now look at the hourly trading view and examine those movements to further assist in predicting the best points to buy and sell...

In examining the hourly cast, you will notice that sharp upwards motion we spoke about earlier, however, using this view, you can see much more detail regarding the movement of the stock over that period. The first green line is the same as the orange line in the previous image. It is obvious that the stock is especially growing at that point which should allow you to know that movement is coming.

Further examination of the next movements, outlined by the red line, you can see how the stock begins to plateau, but, upon closer inspection, the general trend of that plateau is actually negative. That means that it will most likely begin to move in that direction, so, now would be a good time to sell to capitalize on the growth before it falls again.

Now, we can begin to examine the plateau at the bottom of the negative slope. Referring back to the daily cast, you can see a similar area of turbulence. In the hourly cast, we will use the same strategy to see that the plateau is moving in a positive direction, meaning growth again will soon ensue. If you had sold at the top plateau, you would now be able to pretty safely buy and see that equity continue to grow.

Moving further, the valleys (highlighted by green dots) once again follow a positive slope which just assures you that you made a good buy.

Using this tactic, you will be able to see growth within just a day due to the extreme volatility. Additionally, the stock is so cheap that it allows you to just experiment with it without risking a large sum of savings.

All that said, I wish you luck in your trading adventures and I appreciate it so much that you came here for advice. Please remember to sign up for email notifications up top so you can stay up to date on our material. Also, feel free to:
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Thanks again for coming, happy trading!