What the FOMO?


Advanced tips for FOMO trades

FOMO stands for "Fear of Missing Out" and a FOMO trade is simply a trade you enter out of fear of missing the move.  A FOMO trade is not defined by any specific chart setup, nor is it related to the cryptocurrency itself. A FOMO trade is based on a trader's mindset. What may be a FOMO trade to one trader may be a golden setup for another. Therefore, these types of trades are defined by a trader's rationale.

Follow these 5 tips for trading FOMO and the odds are stacked in your favour.

  1. WAIT - You have missed the initial move higher, and we know that your not going to research why the price jumped, so ignore that urge to jump straight in and wait.

  2. WATCH -You must watch the price action closely, looking for a retracement and consolidation within a tight range over a short period of time, usually forming a pennant structure.

  3. PLAN - You then need to plan your entry and exit levels, buy the break of the pennant structure, and target a profit area within a distance approximately equal to the length of the initial flagpole from the break of the pennant.

  4. EXIT - You have been in and out within a short period of time and made off like a pirate, so sit back, relax and wait for the next FOMO trade.

  5. SELL - If you are more comfortable playing from the short side, repeat the steps above, however looking to sell a break of the pennant support line as opposed to buying it, FOMO trades move both ways so there is something for everybody.

FOMO Trading.JPG

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

What are Security Tokens?


What are Security Tokens?

If 2017 was the year of the utility token, 2018 will be remembered as the introduction of an entirely new ecosystem of platforms, exchanges and funds looking to capitalize on the new global opportunity in tokenized securities. Tokenization is becoming increasingly popular amongst more traditional issuers and investors as increased crypto market regulation continues to help bridge the gap between the crypto universe and traditional financial markets assets.

However, before we jump straight into security tokens, let’s recap on the basics first.

What are tokens?

A token is a unit value that exists on an existing blockchain. Tokens do not have their own blockchain but depend or exist on an existing blockchain of a cryptocurrency. Eg, Ethereum, Bitcoin etc. A token has a unit value, that value is tradable. The value can be in the form of coins, points, certificated, in-game items etc.

Tokens are often used to raise funds in an ICO (Initial Coin Offering) or crowdsale which can be compared to IPO (Initial Public Offering) of companies going public on stock exchange. In case of ICO, the companies go public on blockchain. 

Just as you buy a share in a company in IPO, in ICO or Token Crowdsale the tokens you buy can be used to represent a share in the company or can be your voting rights for decision making. The tokens therefore are also called cryptocurrency assets or crypto assets and crypto equity. 

The major difference between a cryptocurrency and a token is that cryptocurrencies have their own separate blockchain on the other hand tokens are built on a blockchain, such as Ethereum, Bitcoin etc., that facilitates the creation of decentralized applications.

Difference between ‘Security’ Tokens & ‘Utility’ Tokens

Security tokens represent equity or debt of the new company and Utility tokens represent the right to use of a product or service, or cater to a specific function in the ecosystem of the new company.

The purchase of security tokens is seen as an investment because they represent ownership therefore, they are subject to National securities regulations. On the other hand utility tokens are not considered as investments as they provide access to the product of service.

Security Tokens:

  • Represent equity or debt of a startup.

  • Purchase of security tokens is seen as an investment.

  • Security tokens are subject to federal securities regulations.

Utility Tokens:

  • Represent the license to use the product.

  • Purchase of Utility tokens is not seen as an investment.

  • Utility tokens are not subject to National  securities regulations

Why tokenize?

Advantages of tokenization include fractionalization of larger assets, increased liquidity, lower issuance fees, and greater market efficiency. However, the greatest benefit that security tokens provide an issuer is access to a global pool of capital. As these tokens can be sold and traded internationally (when compliant with regulations), they become more fairly priced and, therefore, attractive to investors. This regulated compliant offering is appealing to both institutional investors for it’s more recognizable structure, and to crypto investors for its technological innovation.

New Term to Know:
’STO’ — a security token offering. Similar to ICO for utility token offerings.

How to identify trend reversals: the blow-off bottom


How to identify a blow-off bottom? 

It's always a three-candle sequence, that's all there is to it, the first two declining, the second candle's volume greater than the first, the third candle closing up with a higher low than the second candle.

  1. The first candle in the sequence closes down. Volume doesn't matter

  2. The second candle in the sequence close down If it rebounds as shown below, it is a stronger formation than just going above and closing at the lows of the range. But it doesn’t have to rebound

  3. The volume for the second candle in the sequence must be greater than the previous candles volume. This is a key factor, it is what you should always look for in a declining price formation. The bottom is almost always signalled by a strong rise in volume.

  4. The third candle in the sequence must close up

  5. The low of the third candle in the sequence must be higher than the low of the second candle in the three candle sequence.

The buy point is after the third candle is formed and finished, we prefer weekly candles as the longer time frame is more accurate for analysing larger trend reversals, however it works on every time scale. Then if a blow-off bottom has occurred it's time to buy, the exit is up to the individual trader.