In early December 2016 we started researching and developing a strategy that would allow us to find under-the-radar coins, and pick them up before they pop.
If we had to put a name to this strategy, we'd call it something cool, but instead let's go with a name befitting the crypto industry maturity level and call it the 'SoonMoon strategy.'
The premise was simple, a lot of ICOs in October and November were not performing well (see this post for an update on how our portfolio did), and we felt that there were a lot more opportunities looking for projects that were fundamentally solid, but had not yet, or not recently, gone through a huge growth in price.
In other words, they hadn't mooned yet.
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Our theory was that by finding these projects and researching them to weed out the scam projects or sh*tcoins, we could develop a watchlist of coins that had good potential to increase in value later.
We'd then have to wait for a signal or trigger to buy those coins, because there are way too many to just buy them all.
An example of a trigger could be:
- The coin listing on a new exchange
- The coin making some significant progress in its development (such as mainnet release, public beta, and so on)
- A partnership agreement announcement
- Some other announcement (just as long as it's not an announcement of an announcement).
We also wanted to avoid pump and dumps or Mcafee inspired moons that were almost impossible to ride.
This was clearly going to be a work-in-progress and something we'd have to evolve over time.
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Here were the most obvious concerns and difficulties we imagined we'd come up against:
- The fundamental research of each project would take a lot of time
- Knowing what things to give weight to and what to ignore was going to require testing (for example, is the idea more important than first mover advantage? Do either of those things matter, or just sentiment?)
- Monitoring them for buy signals wouldn't be all that hard, but knowing what signals were stronger than others would likely be manual.
- Knowing when to take profits
We've already gained a lot of insights on the above though, and we're only going to get better as time goes by.
We feel pretty strongly that it's well worth developing this kind of strategy though, because even though ICO's are back and performing well, there are still opportunities to make a lot of money off alts this way. Plus, the more strategies you have, the more money you can make, regardless what the market is doing. If ICOs suddenly underperform again, we'll be ready.
Plus, we like the idea of developing a strategy that let's you earn a livable income. Most of our investing so far has been for long-term HODL type coins, and even though our portfolio might go up in value every month, we're not selling any of those coins yet, because we're thinking long term.
By having a short-term strategy to go with it, we can have coins that appreciate in value in a short term every month, and we can sell them to pay living costs.
As we mentioned before, we have income coming from other sources already that pay our expenses, so we don't need to sell our crypto, but there are a lot of people in our audience who would love to quit their jobs and live off crypto, so this strategy is for them.
Note: If you've never bought an altcoin before, read our article here about how to buy altcoins.
Stop Chasing Hype
Many people just run around chasing the latest hype coin. Back in August, we saw people posting in Facebook groups all the time about Neo, OMG, and whatever-other coin had just come onto their radar thanks to a moon.
Now, nobody ever mentions OMG (even though it doubled in price this month), and Neo gets less attention (even though it has tripled in price this month), but we see people posting about RaiBlocks, Verge, Cardano, and whatever-other-coin just came onto their radar.
Is this a bad thing? Not necessarily, but it's obvious that most people are just running around looking for the next train to jump on as it speeds past.
Why not get on at the station, when the train is just loading up passengers and you can get the best seat for the cheapest price?
Finding them early like this means you're going to have a higher failure rate in one sense, as some of the projects will never amount to much.
But the ones that actually leave the station? When they move, they really move. 3x, 5x, 10x, it's all possible.
Here's Loopring as an example, which went up 5x in a little over a month
VeChain, which went up 11x in about 6 weeks
And here's RaiBlocks, which went up 50x in one month
So you only really have to be right 40% of the time and you'll still come out ahead. That's much better than FOMO'ing into the next hype coin and either getting burned, or getting stuck wondering why you keep missing the majority of the ride.
So fast forward to the end of December.
By this time, we had developed a pretty good theory about where to find good candidate coins, and how to research them. We also had some good indicators for when to know those projects might be ready for a pop.
It was time to make some moves and set up some practice trades.
For this, we made a "paper trading" portfolio. Yes, we didn't actually deploy any funds for this. We wanted to be able to track the progress without emotion, and the more projects we could pretend to buy, the more we'd learn.
Starting on December 24, we "purchased" the following coins. Each one was bought for 0.05 BTC.
1.) The idea is to be able to put a small amount in, so that you don't miss it if the coin doesn't take off, or takes a while to move.
2.) We wanted to develop a strategy that anybody could follow, and 0.05 isn't a huge amount (It was about $600 USD at the time).
3.) We also wanted to use a uniform position size with each one, and in future when we put real money in, we'll have enough capital to spread it around. The logic behind uniform position size is simple. You don't know which coin is going to moon and when, so you want to make sure you can benefit from any sudden rises in price, and also not get hit too badly if the wrong coin dips.
So here's what we bought:
- 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
This post isn't going to go into details about why we picked those seven, that's better left for another time. However, what we will tell you is this:
- All of those projects passed our fundamental research tests
- We felt all of them were due a moon (SoonMoon!) of some sort in the coming weeks.
- Technical analysis will likely play a part in the future, but for this phase of the test, we only looked at fundamentals.
So in total we spent 0.35 BTC or $4,597 (based on btc prices at the 3 buy-in times).
As of right now, the portfolio is now worth $15,540 USD.
That's a profit of over $11,000 in around 16 days.
If we had kept the money in BTC, it would be worth around $5,500, so a much, much smaller gain.
Some of these projects haven't even taken off or mooned yet either.
Here's how many BTC each of them is currently worth:
- SHIFT - 0.08 - 60% gain
- EBST - 0.45 - 800% gain
- POE - 0.2 - 210% gain
- XEM - 0.076 - 50% gain
- MCO - 0.041 - 16% loss
- ENJ - 0.99 - 99% gain
- BMC - 0.087 - 75% gain
- TOTAL - 1.04414 - 210% gain
So as you can see, not all of them were winners. Also, this is just a snapshot. Tomorrow it could look a lot worse, or better.
We could have made more profit by exiting them all at the top of the market, or by not picking Monaco, but let's be realistic here, we're not going to get all them right. Monaco still has a chance to do well anyway.
eBoost (8x in 16 days!) and Po.et (3x) are the clear winners, but given another 16 days, how different will this look?
We'll do another update at the end of January for how this portfolio performed over 30 days. We'll also talk more about some of the moves we could have done to maximize this even more.
Now, as we mentioned above, we're going to bypass specifically how we picked these coins - for now.
We DO want to share it with you eventually, but we don't want the opportunities to vanish as a result of us blabbing about it, so we're going to make this subscriber-only content in future. We also need more time to test it before we can explain it, because we don't want to just have a fluke month and pretend we know what we're talking about.
Speaking of which...
Late December and January so far has been an incredible market and alts have been booming all over the place. While we're pretty confident this strategy is solid, there's a reasonable possibility that we just got lucky and benefitted from the market. If you invest in enough coins, a few of them are going to moon, surely?
So with that in mind, please take these results with a pinch of salt and do your own research, and don't take this as investment advice.
That said, we will be continuing to develop this 'SoonMoon strategy' and posting our results periodically, so let's hope it withstands the test of time.
Remember, subscribe to our email list in order to keep up to date with this strategy as we develop it more.
UPDATE: We've now added this a key part of our monthly newsletter.
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