This is an update on our previous post about the "SoonMoon" strategy. If you've not read that yet, you should do it now to get some context.
When we first published it, we initially promised to write an update at the end of January, so this post is nearly three weeks overdue.
It's not like we've missed much though! The market started to tank the same day we published that update, and it has been nothing but bad times since then.
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We didn't delay the post in the hopes that the market would suddenly become bullish again and we could show off our gains. Instead, we were waiting to see exactly how the portfolio performed through all this, so we could put some kind of lesson at the end.
If we'd written the post on February first, it probably would have gone something like: "Yeah so the market is going down still, we'll get back to you next week".
At least now it looks like we might be starting to trend upwards again. Last week was the first recovery week, which means alts might only be a few weeks or less away from their next bullrun. It's a good time to continue talking about this strategy.
So, to give a quick recap, what's the purpose this strategy?
The SoonMoon Strategy
The basic idea is to find under-the-radar coins that are about to release some roadmap development, such as their Mainnet, or about to announce some partnerships. When this happens, prices can skyrocket.
Of course, the theory is so much simpler than the reality.
In reality, we don't always know when news is about to be released, and a lot of things like MainNet release are already priced in before they actually happen.
So the key is to research a LOT of under the radar coins, filter out the junk from the ones with potential, and then create a watch list.
At that point, if a project you are watching suddenly does release an announcement or starts gaining in price, your job becomes a lot simpler.
Instead of trying to FOMO into a project that you don't understand, or end up buying at an all-time-high, you should already know whether a coin is worth entering, and you just have to wait for the right moment.
So if you're monitoring a coin and you see on Twitter that they've just made an announcement, your only job is to decide whether or not that announcement is something worth picking up the coins for.
You can also do this if a coin suddenly tanks, like we did when Rise got delisted from Bittrex.
The reasoning behind this strategy is that ICO's can sometimes take a while to yield you a huge return, especially if the coin hits an exchange during a bear market. Look at projects like CoinFi and Polymath for example. If they'd hit exchanges in December, they'd likely have had parabolic growth by now.
What Will Make A Coin Rise Quickly?
So while ICO's are definitely a large part of our strategy, if the market conditions aren't right, we want to be able to deploy capital in other places, and the SoonMoon strategy is just one area we're exploring. Instead of finding coins and hoping they'll go up some time, you find coins and wait for them to signal that they're about to move up. This means you can utilize your capital more effectively, because you don't have Ethereum constantly tied up in coins.
However, like we said, the theory is a lot simpler than the reality and we're still developing this strategy. Right now it's not easy to know for sure what piece of news is going to cause a coin to Moon. We're also learning that the overall market conditions need to be right as well.
We've seen a lot of coins release interesting announcements over the past few weeks with not much results. Kyber had a boost after announcing their Mainnet release date, but even that wasn't a huge boost (although Kyber isn't really what we'd call an under the radar coin).
To recap, here are the coins we picked up in late December:
- SHIFT (SHIFT) - Dec 24
- eBoost (EBST) - Dec 24
- Po.et (POE) - Dec 24
- NEM (XEM) - Dec 24
- Monaco (MCO) - Dec 25
- Enjin (ENJ) - Jan 2
- Blackmoon Crypto (BMC) - Jan 2
And here's how well they had performed by the middle of January (price shown in BTC):
As we mentioned in that first post, these coins were picked up because we felt they were all good projects, and they all had potential to grow over the next few weeks. SoonMoon is a relatively short strategy, looking to take profits in the 4 week range, give or take a few weeks.
Because these were paper trades, we let the trades ride as long as we could, so we could see how they played out. In reality, we would have sold EBST shortly before the two week update, when it reached 10x in price (we likely would have some some at 5x as well).
Since that day, the market has tanked, and this is where everything stands right now:
All gains/losses are vs BTC.
So as you can see, going from a 800% gain to a mere 97% gain with EBST would have been depressing and in total we are looking at a small gain overall, compared to the $10,000 gain we had after two weeks.
This highlights a few things:
- 1When a coin makes a big gain, you should take profits as it goes up, unless you plan on holding very long term.
- 2The market can turn at any time, and alts seem to get hit the hardest when this happens.
- 3Some coins are never going to get the boost you expect, like Monaco (MCO), so it's important these projects are still ones you class as quality. Otherwise, if you do end up having to hold longer than expected and you've bought a garbage coin, you'll regret it.
- 4If you're trying to gain USD, you're a bit more subject to Bitcoin's moves. In our example above, BlackMoonCrypto (BMC) has gained vs Bitcoin but because Bitcoin has lost a lot of value, if you sold now you'd actually be down in USD terms.
We feel that after around 7-8 weeks of these trades we're happy with what we learned. It's clear that taking profits when a coin has made a large gain is important, even if you only sell 50% of the coins.
Even though our portfolio isn't in great shape right now, the majority of the coins we traded did end up gaining at some point, so we are confident in our ability to pick them.
We'll continue to develop this strategy and grow our watch list, and in the next two weeks we'll release a list of coins we expect to do well in March/April, so make sure you're subscribed to us.
This is something we want to eventually offer as a service along with our other upcoming offers (such as group buys and masterminds) so we are committed to developing the best strategies for multiple situations.