The cryptocurrency craze in 2017 has not just been affecting the cryptocurrencies themselves. Stocks that have been associated with the cryptocurrencies have been seeing the same and sometimes even bigger momentum than the cryptocurrencies themselves. So what do you need to know to capitalize on the momentum in blockchain stocks?
What Is A Blockchain Stock?
We have seen a wide variety of blockchain related catalysts in the past few months. These stocks will often have very little to do with cryptocurrencies, but they will often breakout on just a press release involving some random association with the blockchain world. Most of the catalysts on the stocks running are very exaggerated. Some have been as ridiculous as just changing their company name to incorporate the word "Blockchain". Others will claim they are buying mining rigs, without ever showing any proof of making any purchases. Regardless of what the catalyst is, any mention of cryptocurrencies or blockchain has been sending stocks up hundreds of percent.
How To Trade Blockchain Stocks
Blockchain stocks have a probability of going up huge, but you still have to learn how to find patterns that will give you a good entry while managing your risk. A common characteristic of these stocks with blockchain catalysts is that they gap up big. This means that you need to wait a few minutes after the market is open for a pattern to form on the stock before trading it. Stocks that gap up big in premarket will often sell off at the open, as people take their profits. Once you see the stock start to consolidate, make higher lows, and start to reclaim VWAP you can look for an entry. These stocks are so volatile that if you chase blindly you will risk losing a big portion of your account in a very short period of time.
Examples of Recent Blockchain Stocks
We can see all of these stocks have a similar pattern. Most of them offer great momentum plays to the longside for the first couple days after the big gap up, but they tend to fade off soon after. This is because they're usually running on some nonsense PR that just mentions blockchain randomly like we discussed above. You have to be careful playing these to the long side after day 3 after the initial gap up. You don't want to marry these kind of plays. We go through even more examples in our recent webinar:
Blockchain Stock Watchlist For 2018
Update From Today
I don't want to say I told you so but I told you so. Today was another huge day with Blockchain stocks. OSTK, XNET, and CNET were great profitable trades today and all three are Blockchain Stocks. Check out my trading day performance a day after our Blockchain stock webinar. CNET was especially a monster today. This trend is only going to continue in 2018 and I want to help get you prepared to take advantage of these opportunities.
60 Day Trading Bootcamp Starts January 9th
We teach our students how to trade these type of plays in our 60 day bootcamp. Our next one starts January 9th. We will help you learn how to trade from A-Z and put together your very own trading plan so you can go out and take advantage of plays like this. To claim your seat for our next start date please email Maribeth@bullson.ws.
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