7 Steps to Find the Next 100x Altcoin

Summary

In this video, the creator shares a technical strategy for finding high-potential altcoins, focusing solely on price action and ignoring fundamental analysis. The key is identifying altcoins that have experienced a significant drop followed by a period of sideways reaccumulation in large liquidity pools. This phase offers smart money the chance to fill buy orders while retail investors panic-sell. The video demonstrates this process using Chainlink and Atom as examples, providing insight on how to anticipate breakouts and execute profitable trades. The strategy emphasizes waiting for deviations or breakouts before making moves to target new all-time highs.

Takeaways

• 😀 Focus on technical analysis: The video emphasizes using technical analysis to find altcoins, with no fundamental analysis involved.
• 😀 Look for a big price drop: Identify altcoins that have experienced a significant drop in price, followed by a long period of sideways movement.
• 😀 Sideways reaccumulation: After a strong downward move, look for periods of sideways movement where 'smart money' accumulates long positions.
• 😀 Smart money is crucial: These larger players need time to fill their buy orders, often requiring liquidity from retail traders selling out of fear or boredom.
• 😀 Liquidity pools matter: The key to successful technical setups lies in identifying altcoins that are consolidating in large liquidity pools.
• 😀 Fake break of structure: A common strategy involves spotting fake breakouts that trap traders and create liquidity for smart money to exploit.
• 😀 Validating liquidity pools: Look for liquidity pools formed by failed breakouts or price actions that appear to have been manipulated.
• 😀 Targeting bottoms: These sideways ranges in liquidity pools are where smart money accumulates, signaling potential bottoms for altcoins.
• 😀 Anticipate breakout opportunities: Instead of waiting for confirmation, position yourself for a potential breakout by watching mid-range levels and liquidity pools.
• 😀 Risk-reward strategies: Use risk-reward ratios like 11x to determine entry points for long-term trades based on key price levels and structural shifts.
• 😀 Key entry points: Spot potential entries when price breaks above the range high or when there's a confirmed deviation followed by a shift in structure.

Q & A

What is the core strategy for finding promising altcoins in the video?

The core strategy involves using technical analysis to identify altcoins that are experiencing a large downward move, followed by a period of sideways reaccumulation. This pattern indicates that smart money is accumulating positions while retail investors are either panicking or bored and selling off their holdings.

Why is sideways movement important after a large downward move?

Sideways movement after a large downward move is important because it allows smart money to accumulate positions. This period of boredom or fear in the market causes retail investors to sell, giving institutional players the opportunity to buy at favorable prices.

What role do liquidity pools play in this strategy?

Liquidity pools are crucial because they represent areas where large players can absorb buy orders. By identifying these liquidity zones, traders can determine where smart money is positioning itself and where price reversals might occur.

What is a 'fake break of structure,' and why is it important?

A fake break of structure occurs when the price seems to break out in one direction but fails to follow through, often reversing. This fake move traps retail traders, creating liquidity beneath certain price points that smart money can exploit for accumulation.

How does the concept of 'stop-loss engineering' relate to this strategy?

Stop-loss engineering involves creating price movements that trigger retail traders' stop losses, allowing smart money to accumulate assets. This occurs when fake breaks of structure force retail traders to sell at specific price points, and smart money buys from them.

How does the speaker suggest executing trades based on the identified reaccumulation zones?

Trades can be executed by either anticipating a breakout from the sideways range (buying at key support levels or mid-range levels) or waiting for a confirmed breakout above the range high, and then entering on the pullback or confirmation of the breakout.

Why is 'anticipating a breakout' preferred over 'reacting to a breakout'?

Anticipating a breakout is preferred because it allows traders to enter the market before the breakout occurs, capturing gains early. Reacting to a breakout means waiting for confirmation, which might result in entering the trade at a less favorable price.

What is the significance of using a 'local low' for stop-loss placement?

The local low is used as an invalidation point for the trade, meaning if the price drops below this level, the trade is considered invalid. Placing the stop loss beneath the local low protects the trader from large losses if the market reverses against the position.

What does the speaker mean by targeting 'new all-time highs'?

Targeting new all-time highs refers to aiming for higher price levels than the previous market peak. This strategy expects the altcoin's price to break through resistance levels and reach new, historically high levels, yielding significant gains.

How can traders benefit from a swing trade in this context?

Traders can benefit from swing trades by entering positions during periods of sideways reaccumulation and targeting higher price levels, potentially achieving large returns due to the favorable risk/reward ratios (RR). This strategy involves patience and precise entry points for maximizing profits.