Forex Trading Strategies – Unraveling the Mysteries of Candlestick Charts and Patterns

If you use technical analysis as one of your forex trading strategies, you are probably using candlestick charts. Candlestick charts are one of the three options (along with bar and line charts) and are the most popular among modern retailers as they give the brightest picture of what is happening on the market. But do you use them to their full advantage?

By studying the charts of the candlesticks you can get an immediate picture of the opening, closing, low and high prices for the period he has chosen. But that’s not all candles can reveal.

An experienced candlestick reader can gain a great idea of ​​the mood, strength and momentum of the market only by studying the shapes and patterns of candles. Some successful retailers reject all indicators and simply focus on what candlesticks reveal about price action.

The candlestick charts date back centuries to Osaka from the 18th century, when the legendary rice merchant Homa Munehisa used them to conquer the market. Japan’s long isolation meant that candlestick techniques remained hidden from the rest of the world.

But then merchant Steve Neeson studied the method of mapping candlesticks in the 1990s using old Japanese documents. Neeson hastened to appreciate the beauty of Zen’s candlestick trading method and continued to defend the system in a series of popular books.

Neeson’s books are extremely comprehensive, describing many candlestick formations, including a dark cloud, a hanging man, morning and evening stars, and the famous doji with his various incarnations, such as the dragonfly doji and the tombstone doji.

You may be overwhelmed by reading such books, but you actually need a small group of candlestick patterns to use with confidence and clarity every day. You just need to know which models to focus on and how to correctly interpret what they tell you.

Candles never lie, but predicting their message is not always easy. You need to take some time to understand what they are telling you. Make candlestick reading one of your forex trading strategies and prepare for success in forex trading.

8 Computer solutions at the forefront of the new economy

The last few years have seen new and exciting technologies that promise a more decentralized and secure economy. In this article, I have included some of the major players in this emerging market.

1. Golem

Golem is a decentralized open source computer network.

How Golem works

The Golem network is a computing power market where consumers can benefit from “renting” their machines or developing and selling software.

Within the network, users who employ computing power are called “suppliers” and users who acquire power are called “requesters”. Applicants use Golem for a variety of purposes, including graphics processing, data analysis, microservices and machine learning.

Benefits

  • The division of labor means that tasks can be performed simultaneously, which allows for shorter project deadlines.

  • The cost of doing business is less than cloud services.

  • Users can be paid instantly for their work with the Golem Network Token (GTM), a token in an Ethereum blockchain.

  • Golem builds his entire stack from the bottom up, an approach that usually results in great UX.

2. iExec

IExec is a decentralized cloud services market focused on blockchain-based distributed applications and affordable, high-performance computing.

iExecc Dapps

Unlike Golem, iExec (since the release of its v1) allows anyone to develop and run applications.

The iExecc Dapp store contains various applications. Given the experienced team behind iExec, their reason for choosing Dapp’s path is that there is probably less competition here. Once established in Dapp’s decentralized market, iExec plans to expand into decentralized computing tasks.

RLC

RLC stands for “Running on Many Computers” and is the natural token of iExec. There are currently 87 million of the ERC-20 token in circulation.

3. Ethereum

Ethereum is an open source platform based on blockchain that allows users to create decentralized applications. The calculations are performed in an isolated environment called Ethereum Virtual Machine, which is located in all nodes connected to the network. The product of the calculations is stored in the blockchain.

Features of Ethereum Blockchain

ether

Ether is the currency of the Ethereum blockchain. The cryptocurrencies ETH (Ethereum Hard Fork) and ETC (Ethereum Classic) are two Ether values.

Intelligent contract

EVM is able to perform “smart contact”, an algorithm that stores and automatically executes the terms of agreements. Both parties involved in the transaction agree to the terms written in the smart contract.

Bitcoin against the Ethereum platform

The Bitcoin blockchain focuses on a set of predefined operations, such as tracking bitcoin transactions, while Ethereum allows users to execute code of any complexity, making it suitable for any decentralized application, including cryptocurrencies.

Consensus mechanism

Computing on the Ethereum network costs more and takes more time than a standard computer due to parallel computing. In order to maintain consensus, all participants must agree on the order of all transactions, whether or not they have participated in the transaction.

Ethereum nodes keep up-to-date on every smart contract, along with all Ether transactions. Because EVM is an isolated system, the code runs without access to the network or file system. So there is limited access even among smart contracts.

4. Hyperledger Fabric

Hosted by the Linux Foundation, Hyperledger Fabric is an open source distributed registry (DLT) technology that has a modular and configurable architecture that can be used at the enterprise level in a variety of industries.

Hyperledger Fabric features

Confidentiality, development and productivity

  • The Fabric platform allows an authorized private operation in which operators know each other and can be bound by rules such as a legal agreement.

  • Fabric supports smart contracts written in common languages ​​such as Java and Go, so no additional training is required to create smart contracts.

  • Efficiency is improving because, unlike Ethereum, only the parties involved in the transaction need to reach a consensus.

Woven knots

Also, unlike Ethereum, Fabric nodes have different roles and tasks in the consensus process. Nodes can be guarantors, customers or partners.

Local currency

Fabric does not have its own cryptocurrency. However, the chain can be used to develop local currency.

5. Tendermint

Tendermint has a blockchain consensus engine known as the Tendermint Core, and a common application interface known as the Application Blockchain Interface (ABCI). The software allows secure and consistent copying of an application on multiple machines.

Tendermint Core

Byzantine fault-tolerant (BFT) consensus engine intermediate software can reliably replicate the transition machine. The BFT middleware can tolerate one-third of failures, including hacker attacks.

Tendermint aimed to offer a more secure and efficient consensus algorithm than Bitcoin’s PoW (Proof of Work). The software forms the basis of important research by the Casper consensus protocol team: a fault-tolerant circuit, such as Tendermint, can make good decisions about who makes a unit, while a less reliable circuit leads to a chicken and egg problem.

The software is easy to use, copies applications written in any language, and has multiple applications.

6. Shine

Lisk is a decentralized and distributed platform that allows users to develop applications and maintain them with custom blockchains.

Features of Lisk

Developers can use Lisk’s JavaScript-based Software Development Kit (SDK) to build both the backend and the front end of their application. However, Lisk does not offer protection against indeterminate behavior. In addition, the platform cannot prevent endless cycles and measure memory consumption.

Lisk’s consensus mechanism

Lisk asks developers to follow “rules” for contracts to ensure consensus. For example, they ask developers “not to use Math.random ().”

7. Corda (V 3.0)

Corda is an open source distributed book (DLT) platform serving the financial industry.

Features of Corda

The Corda network is an authorized network – it is not open to all node operators. The nodes work on Corda and CoDapps and communicate from point to point with each other.

The “gatekeeper” of each network sets the admission rules for nodes that want to join the network. Like Fabric, Corda offers more privacy due to its fine control of access to records and better permeability due to limited consensus between the parties involved.

At Corda, contract developers also add legal prose to their contract. This function consolidates the contract by legitimizing it with the related legal prose. The platform does not have its own token.

8. Substrate

Rootstock (RSK) is an open source smart contract platform built on the bitcoin blockchain.

Pad characteristics

Intelligent contracts

RSK activates a smart agreement in the Bitcoin network. It uses the complete Turing virtual machine (RVM) for smart contracts. A two-way peg allows users to send bitcoin directly to the Rootstock chain. RSK coins can be used with smart contracts and Dapps. RSK contracts copy “proof of existence”, which is used to prove the existence of a document (or title).

Security

The RSK blockchain has a digging pool that gives it the same level of security as Bitcoin in terms of settlement finality and double spending.

SBTC

RSK is a side chain of bitcoin. The bitcoins in the Rootstock blockchain are called SBTC.

RSK fills the gaps in the bitcoin network by allowing faster transactions. In addition to being user-friendly, it also helps keep the size of the Bitcoin block within limits.

Overview of the initial coin offering (ICO)

ICO is a fundraising tool with unregulated funds for various cryptocurrency ventures. This is something that start-ups use to circumvent the regulated and rigorous capital raising process that banks and venture capitalists require. In such a campaign, a percentage of the cryptocurrency is sold to project supporters very early on for other cryptocurrencies or legal tender.

How is it done

When a company wants to raise money using the initial coin offering, there must be a white paper plan outlining the details of the project. He must outline what the project is for, what the project needs, what it aims to complete. He must also indicate the money that will be needed to undertake the whole endeavor and how much the pioneers will receive to keep.

The plan should also mention the type of currency adopted and how long it intends to run the campaign. During such a campaign, supporters and enthusiasts of the initiative will buy cryptocurrencies using virtual currency or fiat. The coins are called tokens and are very similar to the company’s shares, which are sold to investors during the IPO. If the minimum required funds are not reached, then the money is refunded and the whole ICO is considered a failure. When the requirements are met within a certain period of time, the money can be used to start the scheme or even complete it if it is still progressing.

Investors who participate in the project early are motivated mainly to buy cryptocurrencies, hoping that the plan will be successful and will receive more value from it after launch. There have been many successful projects of this kind in different economies and this is one of the main things that motivates investors.

Similarities

ICOs can be compared to crowdfunding and IPOs. Like an IPO, a stake must be sold by a start-up company to raise funds that will help run such a company. The only difference is that IPOs deal with investors, while ICOs work closely with supporters who are very passionate about new projects, just like the crowdfunding event.

However, ICOs are different from crowdfund in the sense that ICO supporters are usually motivated by the fact that they can get a high return on investment. Funds raised through crowdfunding are mainly donations. For this reason, ICOS is called crowd sales.

So far, there have been many successful transactions. ICOs are an innovative tool in our digital age. However, it is important for investors to take precautions, as there are some campaigns that can become fraudulent. This is due to the fact that they are highly unregulated. The financial authorities are not involved in this and if you lose money through such initiatives, it is difficult to follow up to get compensation.

To this end, there are some regions that do not allow the use of ICOs at all. It is important to buy such currency only from trusted sources to be safe.

Blockchain web hosting

The remarkable recent rise in bitcoin prices has sparked the imagination of many investors, but Blockchain technology is not just about money. In this article, we will look at how significant this revolutionary technology will have on classic web hosting services.

The concept of cryptocurrency is not rocket science. In fact, this medium of exchange is no more complicated than the traditional currency. However, he still needs a secure and reliable environment in which to work, and this is provided by Blockchain.

What is Blockchain? There are many misunderstandings related to it, but for the purposes of this article we will simply define it as a distributed spreadsheet. We’re all familiar with Excel or Open Office spreadsheets, but what makes Blockchain so appealing is the way it spreads.

Just like the files in Torrent, Blockchain is a peer-to-peer network in which there is no need to guarantee trust between the parties. Thanks to modern cryptography, trust is instead maintained at the level of a record, not the host country.

Okay, now we understand the basics of the cryptocurrency revolution, but how, one might ask, does it affect web hosting services? In essence, in its simplest form, this would involve not only selling your services in your local currency, but also in bitcoin and other cryptocurrencies.

However, this is not the end of the revolution. Bitcoin and other digital currencies need e-wallets to work, and so there is huge potential for traditional web hosting providers. If you trust your customers and host their sites, then why not host their electronic maids?

Each cryptocurrency transaction is a de facto transaction between two electronic valet. Each exchange is maintained through a wallet and you can also provide an interface to access your clients. This factor is crucial to fully understand the impact that Blockchain can have on your web hosting business.

That said, Blockchain is not just about money. The latest versions of its protocols also provide for the possibility of concluding any form of contract between the parties, whether it is a cable TV subscription or in fact another type of account. They all need to be stored somewhere and there is room for web hosting companies.

Thus, the portfolio is the key to fully exploiting the potential of Blockchain. Once you understand this, what should be your next steps?

Advantages of scalping the Forex method

Scalping foreign exchange trading is one of the new methods that are becoming increasingly popular among traders. Instead of analyzing market conditions, looking for currency trends and hoping to make big money, this method focuses on short-term transactions, usually lasting only minutes. Profits may be small compared to long-term transactions involving large fluctuations in currency prices, but an effective scalping trading strategy can ensure a stable flow of profits.

The scalping trade requires massive knowledge of the market. Currency trading, of which one knows nothing, is suicide. The strategy of many scalping traders is to trade a large number of currencies at once, holding them for a few minutes and selling them when there is a slight but favorable movement. This also requires a lot of discipline, as there is always the temptation to let the trade run when things go wrong. By stopping trading even in a losing position, losses are minimized. However, there is always hope that some of the other deals will bring in profits, thus offsetting losses.

Scalpers are not looking for markets that are very volatile. Because they are small market players, they cannot afford to play in a market that can destroy them in a matter of seconds. They want a market that is stable, where it is possible to enter into simultaneous and multi-currency, but less risky transactions.

The liquid market is also a good time to trade scalpers. With more money around, there are always small fluctuations that lead to some modest profits. And he will not always start trading at the beginning of the day. He will first monitor the market. It is useless to trade when market conditions are not right.

It is easy to see that the success of forex scalping depends on knowledge of market conditions. Once the trader has acquired this and started trading with a well-prepared trading plan, scalping is much easier.

Currency exchange market

Introduction
The currency exchange market is a unique tool for investing your finances. This type of investment requires you to trade between two currencies based on their past performance in the foreign exchange market. Many people now invest in this market either as long-term investors or as short-term investors.

Uniqueness of the foreign exchange market
The trading volumes in this market are quite incredible. There are over a million deals that are made on a daily basis and this is what makes this market a popular investment choice. The foreign exchange market is also liquid and this allows investors to make profits as long as they make the right forecasts. Anyone in any part of this world can participate in currency trading, as it deals with world currencies. Most countries have their own local forex centers, where traders and interested brokers conduct their trading. Thanks to modern technology, investors have the opportunity to purchase and install expert advisors in their computer systems.

These systems make the whole business much easier and more efficient. Depending on the settings you make for them, they can predict market trends and trade on your behalf. Another unique aspect of forex trading is the long hours of trading except weekends. Trading never closes on weekdays, as traders are usually wary of any investment opportunities. In fact, many of them work twenty-four hours a day. Another feature is that exchange rates vary depending on a number of factors. Some of them include market speculation, sentiment and currency trends. Changes in some of the variables can lead to differences in exchange rates. Investors in this trade can also receive leverage from brokerage firms or individual brokers.

Currency trading
Currency trading is quite a risky investment, especially when one is making long-term investments. This is not always a guarantee that you will make huge profits or significant profits. While some investors may make profits, others may incur losses depending on how they have speculated in the market and the forecasts they have made for the currencies they trade. Trading is not an easy activity, because you need to understand how the market works in different trends. To get information on how to exchange currency, one can create demo accounts to allow them to get information on how the market works. In order to make a profit, one must know how to study past currency trends and make predictions based on this information. Trends do not always remain constant; they change at some point due to various factors. Market sentiment also plays a role in determining the predictions that people are likely to make in the market.

Summary
As the foreign exchange market involves taking high risks, this is a unique opportunity for investors. They do not have to trade alone, as there are “expert advisers” who are effective in increasing their chances of winning. Consulting with your brokers or traders can help you learn more about how the market works.

Attractions of Mexcel Trader from FxDialogue

Metatrader from FxDialogue is an extremely user-friendly trading solution that does almost all the things a user has to do with Metatrader4, simplifying it by integrating the trading platform with Microsoft Excel.

Metatrader4 is used by online speculative Forex traders (foreign exchange) as a software program and in Forex terminology; it is called an electronic trading platform. This software uses the MQL4 scripting language, which allows Forex traders to develop scripts, custom indicators and most attractively create expert advisors. Many brokers who used other trading software have replaced or started using Metatrader4 as an alternative trading software. It is very efficient as it provides real-time graphs, trading operations and technical analysis. The Metatrader4 platform is heavily focused on margin trading.

The internal programming language used in MetaTrader 4 is like “C”, which is a machine language that allows software users to program their own signals, trading strategies and indicators. And to interact with Excel, users must first create a C ++ library that is accessible from Metatrader4. Empowering Metatrader 4 with Mexcel Trader makes it significantly easier because it gives more flexibility and minimal language problems.

Mexcel Trader has some very important features included, along with tools that help the user to formulate Forex strategies, charts and charts without the knowledge of MQL, and the best thing is that to use this, the user must have only knowledge of Excel. Using Metatrader 4 with excel requires a lot of programming and would take a huge amount of time to do a small job, but Mexcel trader from FxDialogue eliminates this cumbersome process by using the very efficient computing capacity of MS Excel with historical prices, real-time data and appropriate features, making it a perfect alternative to the insidious programming process.

Mexcel trader is user-friendly and allows the user to build their own price history database to check trends over any time range. It also provides live streaming of Forex currency data. Another advantage for consumers to feel absolutely confident while choosing Mexcel Trader as their Forex trading company is that FxDialogue has partners authorized in the UK, EU and USA. Consumer funds are held in the reputable JPMorgan Chase Bank and the user can receive 24-hour trading support.

One dynamic feature of Mexcel trader is that the user can use a common platform to communicate with multiple brokers, so users do not have to switch between different platforms to communicate with multiple brokers in a short period of time, and do not need to understand the platform. which the broker uses. This really makes it very easy for the user, eliminating any kind of complexity.

Forex trading can be controlled from home and for that we will just need a computer and software to access the online currency market. To this end, there are some ambiguities in traditional systems, which are quite complex to a large extent. To overcome this complex solution, FxDialogue created the Mexcel tool for Metatrader 4, which, by eliminating the need for users to write any complex programs, opened up a number of possibilities for using all the useful features of Meta trader and at the same time, updating real-time pricing by displaying multiple time frames for each currency pair used in single-window or window trading.

5 ways Blockchain will transform the life of the average person

With all the media full of news about cryptocurrency prices, you may be wondering how this affects the average person. Blockchain technology is at the heart of cryptocurrency and other digital currencies.

There are various industrial and administrative problems that technology can solve for the average person. Do you own a small business, but often feel that there is a lack of transparency due to traditional methods of communication? Have you ever had higher than usual medical bills? As a business owner, finding legitimate candidates is a problem for you? These problems affect entrepreneurs, start-ups, small businesses, individuals and technology Blockchain seeks to provide solutions that make the life of the average person much simpler through simple solutions.

Banking

Banking in almost all countries is still very focused on paper transactions for any money transfer, record keeping or other back end functions. Blockchain technology can reproduce this in digital format and create a decentralized book that allows not only bankers but also customers to access a single source of information. This system allows banks to eliminate the chances of fraud, as documentation and proof of asset ownership can be checked digitally by bankers in the blockchain book, which can be accessed at any time in a fixed format.

Identity theft is also a major problem in the banking sector, with citizens’ information being stolen and used to open fraudulent accounts for illegal activities. According to the Federal Trade Commission’s online complaints database, more than 13 million complaints of card fraud and identity theft have been filed, 3 million of which were filed in 2016 alone. Through a blockchain system, customers can see all accounts directly. held on their behalf, and immediately notify their respective banks in the event that they notice any suspicious activity in their bank details. Some well-known examples include the IBM-supported Hyperledger Fabric project and UBS’s Utility Settlement Coin.

Healthcare

Blockchain technology can simplify healthcare in amazing ways and make managing medical data much easier. Providing widely available patient files can allow for much more convenient drug development research and also reduce the effects of counterfeit drugs. Clinical trials and their results can be provided in a decentralized network, allowing healthcare professionals and researchers to conduct research and find solutions for better healthcare. Accenture is one of the largest companies to offer innovative healthcare solutions for the healthcare sector for secure, fraud-free transactions.

Fraud with Medicare can also be eliminated by managing blockchain invoicing, as the invoicing system can be fully automated, without any scope of fraudulent intermediaries. With more than 56 million people under Medicare by 2017, more than $ 1.3 billion has been hijacked by the government through fraudulent activities from rehab facilities and home health services. Blockchain systems can effectively protect citizens seeking medical help from healthcare providers who overestimate the services offered through fraudulent billing practices. Centralized data not only helps healthcare professionals suggest treatment based on the patient’s history and his / her family, but also eliminates the chances of the patient remembering past symptoms or disorders incorrectly.

Public records

One of the most important functions of the government’s civilian administration is to record all information about its citizens. This includes information about individuals and companies regarding their assets and activities. Most of the recorded information is stored in paper databases, which makes data management extremely difficult even in developed countries.

Blockchain-based systems, such as Ubitiquity, can encrypt all public records in a digital register to protect citizens’ data from fraud. Identity theft is a problem that can be very difficult for the administration to deal with, and digitizing all public information to protect it from falsification can help prevent such criminal activity.

Voting

One of the biggest limitations of the voting system in almost every country is that even today, voters have to be physically present at the polls to vote, and it can be difficult for people to travel on election day. More importantly, there are no means to verify the results of the survey for the average citizen.

Blockchain development companies like Followmyvote are coming up with solutions that seek to make online voting a reality. This will allow citizens to see accurate information about the ranking and results of surveys and various other statistics publicly. This also leads to safer voting for citizens of countries in internal or external conflict, and criminal activities to force citizens to vote for specific candidates can be completely avoided.

Hiring a business

Businesses of all sizes find it difficult to find the right staff. Using blockchain technology, it is possible for companies to verify the identification data of all candidates through a digital database. Blockchain technology can be used to create a decentralized database of professionals with proven qualifications in a secure book that businesses can rely on to hire candidates. Learning Machine is a New York-based company that seeks to address this problem, which focuses on recording verifiable information for workers.

Tax or employment fraud accounted for 34% of all identity thefts by 2016, and the blockchain system makes the hiring process much more secure for any business, as the company will only have access to valid applicants, reducing the risk of hiring fraudulent employees. It also helps applicants by speeding up the recruitment process and helping them find eligible jobs and have a smooth application process.

The use of blockchain technology helps both individuals and businesses and also protects personal information while making important data publicly available. While blockchain has the best application in cryptocurrency, its use can be extended to other sectors to provide meaningful solutions to citizens around the world.

Currency position

Banks participate in foreign exchange transactions. When buying / selling them, an asset (requirement) is formed in this currency and there is a liability (liability) formed in another. Therefore, banks have claims and liabilities in several different currencies that are strongly influenced by exchange rates.

The probability of loss or gain as a result of adverse changes in exchange rates is called currency risk.

The ratio of the bank’s assets and liabilities in foreign currency determines its currency position. If the requirements and obligations of the bank in a certain currency are equal, the currency position is closed, but if there is a discrepancy – it is called open. The closed agreement is a relatively stable state of the banking sector. But it is impossible to profit from a change in the exchange rate with this agreement. The open one, on the other hand, can be “long” or “short”. The position is called “long” (if the requirements exceed the obligations) and “short” (the obligations exceed the requirements). The long position in a certain currency (when the Bank’s assets in the currency exceed its liabilities) carries the risk of loss if the exchange rate of this currency falls Short currency position (when the liabilities in this currency exceed its assets) carries the risk of loss if the exchange rate of this currency rose.

The following operations affect the currency positions of banks:

• Receipt of interest and other income in foreign currency.

• Conversion operations with immediate delivery of funds

• Operations with derivatives (forward and futures transactions, settlement forwards, swap transactions, etc.) for which there are requirements and obligations in foreign currency, regardless of the manner and form of settlement for such transactions.

To avoid currency risk, we must strive for a closed position for each currency. It is possible to compensate for the imbalance of assets and liabilities with the volume of bought and sold currency. Therefore, commercial banks need to create effective systems for managing currency risks. The authorized bank may have an open currency position from the date of receipt by the National Bank of a license to conduct operations with currency values. To avoid risks or losses in foreign exchange transactions; The central bank sets the standards for an open currency position. This approach to currency risk management is based on international banking practices as well as the recommendations of the Basel Committee on Banking Supervision. In the UK, the parameters of the open currency position are limited to 10% and 15% of the bank’s capital, and in France 15% and 40%, respectively in the Netherlands – 25%.

Currency positions are recorded in the account at the end of the day. If the bank has an open currency position, changes in the exchange rate lead to profit or loss. Therefore, the Central Bank is taking measures to exclude sharp fluctuations in the exchange rate

The stages of market mania

What is mania? It is defined as a mental illness characterized by great agitation, euphoria, delusions and overactivity. When investing, this is expressed in investment decisions driven by fear and greed, without being mitigated by analysis, reason or balance between the results of risk and rewards. Mania usually runs in parallel with the development of the product business, but time can sometimes go awry.

The technology.com boom of the late 1990s and today’s cryptocurrency boom are two examples of how a mania works in real time. These two events will be highlighted with each stage in this article.

Stage of the idea

The first stage of the mania starts with a great idea. The idea is not yet known to many people, but the potential for profit is huge. This usually translates to unlimited profits, as “something like this has never been done before.” The Internet was one such case. People using paper systems at the time were skeptical, “How can the Internet replace such a well-known and well-established system?” The backbone of the idea is beginning to take shape. This has become the modems, servers, software and websites needed to turn the idea into something tangible. Investments in the idea stage start poorly and are made by people “familiar”. In this case, it could be the visionaries and the people working on the project.

In the world of cryptocurrencies, the same question is asked: How can part of the crypto code replace our monetary system, contractual system and payment systems?

Opportunities

The first websites were rude, limited, slow and annoying. Skeptics would look at the words “information superhighway” that the visionaries uttered and said “how can this really be so useful?” The forgotten element here is that ideas start at their worst and then develop into something better and better. This sometimes happens due to better technology, larger scale and cheaper costs, better applications for the product in question or more familiarity with the product, combined with great marketing. In terms of investment, early consumers are getting involved, but there is still no euphoria and astronomical return. In some cases, the investment has given a decent return, but not enough to encourage the masses to get involved. This is similar to the slow internet connections of the 90s of the last century, the collapse of Internet sites or inaccurate information in search engines. In the world of cryptocurrencies, this is reflected in the high cost of digging coins, slow transaction times and hacking or stealing accounts.

Acceleration

It’s starting to turn out that this internet and “.com” is the hottest new thing. The products and the tangibility are constructed, but due to the huge scale, the cost and time spent would be huge before everyone uses them. The investment aspect of the equation is beginning to outpace business development as markets discount business potential with the cost of investment. The euphoria began to materialize, but only among the first adoptive parents. This is happening in the world of cryptocurrencies with the explosion of new “altcoins” and the big media press that the space is receiving.

The euphoria

This stage is dominated by the parabolic returns and the potential that the Internet offers. I don’t think much about implementation or problems, because “the return is huge and I don’t want to miss it.” The words “irrational abundance” and “mania” are beginning to become common as people buy out of sheer greed. Negative risks and largely ignored. Symptoms of mania include: Any company that has.com in its name is hot, the analysis is thrown out the window in favor of optics, investment knowledge is becoming less obvious among new entrants, expectations for 10 or 100 luggage returns are common and few people actually know how the product works or doesn’t work. This took place in the world of cryptocurrencies with stellar returns from the end of 2017 and incidents with shares of companies that jumped hundreds of percentage points by using “blockchain” in their name. There are also “takeover bids” in which front companies that are listed but are dormant change their names to something involving a blockchain, and the shares are suddenly actively traded.

The collapse and the burning

The business scene for the new product is changing, but not as fast as the investment scene. Eventually, a change in thinking occurs and a huge sale begins. Volatility is huge and many of the “weak hands” have been wiped out of the market. Suddenly, analysis is used again to justify that these companies have no value or are “overvalued”. Fear is spreading and prices are accelerating. Companies that have no profits and that survive with noise and future prospects are blown away. Incidents of fraud and fraud that are increasing to take advantage of greed have been uncovered, causing more fear and selling off securities. Businesses that have the money are quietly investing in the new product, but the pace of progress is slowing because the new product is an “ugly word” unless profits are convincingly demonstrated. This is beginning to happen in the world of cryptocurrencies with the folding of credit schemes using cryptocurrencies and the more common cases of coin theft. Some of the marginal coins decrease in value due to their speculative nature.

Survivors

At this stage, the investment landscape is charred with stories of losses and bad experiences. Meanwhile, the great idea is becoming tangible and for the business that uses it, it’s a boom. Begins to be applied in daily activities. The product is beginning to become the standard, and visionaries are quoted as saying that the “information superhighway” is real. The average consumer notices an improvement in the product and he starts mass acceptance. Businesses that have had a real profit strategy get hit during the collapse and burnout phase, but if they have the money to survive, they get to the next wave. This has not yet happened in the world of cryptocurrencies. The expected survivors are those who have a tangible business case and corporate support – but it remains to be seen which companies and coins will be.

The next wave – Business is catching up

At this stage, the new product is standard and the profits become obvious. The business case is now based on profits and scale, not on the idea. A second wave of investment emerges, starting with these survivors and extending to another early-stage mania. The next stage is characterized by companies for social media, search engines and online shopping, which are derivatives of the original product – the Internet.

The conclusion

Mania works on a pattern that manifests itself in a similar way over time. Once one recognizes the stages and thought process of each, it becomes easier to understand what is happening and investment decisions become clearer.