THE TRADING STRATEGY
THE TRADING STRATEGY
We use a multitude of buying strategies and avoid falling for hype or buying when the price is skyrocketing. Our standard is to wait until the rate declines to the nearest support level or a Fibonacci level of 50%, even 61,8%, before purchasing any cryptocurrency. The trading can be followed in real time through our website and all of the trades are published through API Interface. All the data in our website is through the interface, direct from the largest stock exchange in the world, our aim being the highest possible level of reliability and transparency.
We favour the use of support- and resistance levels in conjunction with Fibonacci level. These two ways of trading are presented below. We also have expertise on other strategies of trading of which there will be examples in the member news.
SUPPORT / RESISTANCE LEVELS
The highest previous peak of the exchange rate forms the resistance level. After the rate on the next climb exceeds the resistance level it turns into a support level. Often after breaking the resistance level the rate declines immediately, testing the new support level as shown in the picture. After that it often keeps on climbing towards the Fibonacci level of 100%.
Best, and the least risky, time of trading is the time of new decline, reaching the Fibonacci level of 50%, which in the illustration above is the new support level. Often the rate declines even further, all the way to Fibonacci level of 61,8%, which in this illustration it hasn’t quite reached. We mostly focus on the support levels when purchasing stocks and the resistance levels whilst selling.
THE LONG TIME TREND OF CRYPTOCURRENCY IS UPWARDS
Cryptocurrencies are the so-called megatrend of the moment and we believe that both, their demand and value, is about to grow explosively. Yet we aim to trade with the best possible prices and only trade in the most popular cryptocurrencies, the ones with large enough trade volume. Bitcoin and Ethereum are stable parts of Cameleoncoin, as we have an especially strong belief in the long term value rise of both of these cryptocurrencies.
CAMELEONCOIN IN PRACTICE
In short, Cameleoncoin is the sum of the Bitcoin index, the index of the most popular cryptocurrencies, and our trading strategy. The rise of the market value is solely dependent on these factors. However, the popularity of cryptocurrencies grows continuously and we strongly believe that the long term trend of all the major cryptocurrencies is upwards. In the "CHART" page our registered clients can participate in the discussion and have their hand on which currencies they feel should be part of Cameleoncoin composition. Part of our strategy is to keep a keen eye on the forums of discussion, and if a particular cryptocurrency keeps being mentioned in positive it ends up on our watchlist. Then follows an analysis of the currency, deciding what rate it could be bought and what percentage of Cameleoncoin could it comprise. We are continuously working to raise the value of Cameleoncoin in the best possible way.
OUR USE OF FIBONACCI LEVELS 50% AND 61,8%
The illustration shows how a downward trend turns in to a rising one, the lowest point of the decline forming the Fibonacci level of 0% and the highest peak of the first upward climb forming the level of 100%. We usually do our first purchases when the rates reach level 50% and buy some more again on level 61,8%, illustrated by blue colouring. Fibonacci level 100% forms a new resistance level, and once it breaches it becomes a support level. The support level holds well, but the rate eventually falls below to test the Fibonacci level of 50%, which holds. After that the rate continues upwards. The blue areas illustrate profitable levels of buying, the first one being on the Fibonacci level of 61,8% and the second blue area placed on Fibonacci level of 50%.
THE PSYCHOLOGY OF TRADING
As mentioned earlier, we do not buy into the hype of buying when the rates are rising fast, the “Wow, am I smart” point of the above illustration. We wait patiently, often buying during the panic sales or the "How could I have been so wrong?"-point of the illustration. Fibonacci levels of 50% for the first purchases and 61,8% for the second are automatically good times to buy, also in a psychological sense.