Step One: Identify a coin in its accumulation phase
a. It has decreased over 79% from its peak.
b. The sell orderbook is generally thin, or constantly changing.
c. Large asks, near or just below the currently traded prices
Step Two: Observe the market
a. See what the current climate surrounding the coin is
b. Read the ANN thread
c. Identify your entry point
a. Place your trade, and wait.
When you are in the process of choosing your coin, there is a multi-step verification process that you should entertain before preparing to accumulate. A coin has to have a good ANN thread, hands down. If the announcement isn’t good other traders won’t be attracted to it when they see the coin on the top of the market list on the exchange due to huge volume that happens in a pump.
Coins in accumulation phase are experiencing no hype, no love from the trader community. That’s when you’ll see a pattern of accumulation:
As an example, let’s take Litecoin. This is currently in the accumulation phase. There has been a long period of selling off, as traders capitalize on their losses after the excitement of the most recent pump. Now, it is trading at its usual (over the last 2 years) low. .0059-.0069, down 85% from its most recent high. This is the perfect time to accumulate LTC along with the rest of the large holders.
Most traders who have been holding LTC for a long time are scared. They aren’t seeing their “beloved” coin make any gains and it’s scary. These “weak hands” get excited about the smallest increases, and frustrated at 5% drops – after the coin has been dropping for months! This extremely negative loser’s-mentality allows them to be scared, and when they are controlled by their emotions, it increases the holdings of the largest whales.
The most recent accumulation phase for Litecoin began on June 22. There have been very few days of large volume for it since then, and the days that were large volume are the ones that stand out on the chart. All it will take is some “news” or blip of excitement to light the match that starts a sharp increase in price. Once the upwards momentum starts, it’s a self-fulfilling cycle, as slow traders enter in due to “good fundamentals” and you can take advantage of them all the way up – selling as they buy with excitement.
I recommend buy orders at .0062, .0059, .0057, and .0055 for the current Litecoin accumulation phase.
You should stagger the total amount of bitcoins you’re investing in the possibility of a pump. This is difficult because the more a coin has decreased from its last peak, the more likely it is to pump. Staggering your buy orders allows you to both diversify your coins and pick up coins in the bottom of the accumulation range.