Shopping for Shitcoins with The Dood

Disclaimer: Nothing here is meant as financial advice. I'm not a financial advisor nor do I pretend to be one on the internet. All information is posted in a public forum in the spirit of good conversation with like minded individuals. Please seek a duly licensed financial professional for financial advice, not some cartoon character on the internet who calls himself The Dood!

When the market turns bullish like this I like to go shitcoin shopping and build some bags. Here's what I look for when I go shitcoin shopping.

There are two ways I do this. The first way is to go through your favorite exchange and research one coin at a time. I begin my research on CoinGecko although any marketcap site will work fine if they can answer all your questions. This is how I find the hidden gems and projects the rest of us may have overlooked. These plays can pay out handsomely and it's really worth the effort it takes to do the research.

The second way is to look for popular accounts on Twitter or other social sites that ask people to shill their favorite shitcoins. This can give you an idea about the excitement and community support around a project, but most times the project has already been hyped and now you're showing up late to the party. Still, every once in awhile somebody may shill something that's new or not yet popular.

Time To Do Some Research

Now it's time to research these coins. This is an all day affair. Put on some coffee.. YOU'RE GOING TO NEED IT! Find some music you like, I tend to lean towards LoFi hip hop, downtempo chill, deep house or of course The Creedence Clearwater Revival! Now that we have our coffee, and some music, lets research some shitcoins. I like to start my research with CoinGecko. Any marketcap site will do though. First thing I look at...

Is it a token or coin?

I'm currently focusing mainly on coins and buying very few tokens. I think the bottom is going to fall out of the token market soon unless the gas fee issue is addressed and taken care of. This also depends on what blockchain the token is on. I'm personally avoiding most of this Ethereum and DeFi stuff. I'm probably leaving money on the table but this market has been hyped and pumped IMHO. I'm not looking to chase tops I'm looking for hidden gems that have a lot of growth potential.

What is the coin supply?

For me this matters a lot. I tend to focus on coins with a supply of less than 1 billion. I prefer projects with supplies under 500 million.

Coin supply and marketcap can give you a decent idea of price potential. Supply and demand dictate price action, coins with lower supplies tend increase in value much quicker than projects with huge coin supplies. There are some coins out there with 100,000,000,000 coins. That's a lot of coins. There are always exceptions to the rule, but I tend to lean towards lower supply coins.

Has The Coin Already Pumped?

Now lets see if the coin has already pumped. I look at the price in both USD and BTC.

Due to bitcoins meteoric pump many coins have climbed in USD but not in BTC. Most decent projects will adjust to BTC as well. If the coins already pumped in USD and BTC I move on. Sure it might continue to rise, but why chase tops. I'm looking for hidden gems, with plenty of room to grow with upward price movement.

In the above WAVES chart you can see the price in USD in blue is much higher than the price in Satoshis. There is room for growth here. The rising BTC price has dragged the dollar price up with it. The BTC price in satoshis is still near an all time low. I've posted about this theory in the past. You can read more about this here.

Look At Price Growth

Most marketcap sites will show you growth percentage in day, week, month and year. If the coin price has grown 300% to 3000% in the year, I walk away. There are times to enter trades like this, but this is not what I'm looking for right now. Maybe add this to a list of coins to look into later, research where the hypes coming from and maybe wait for a better entry if you like the rest of the technicals and fundamentals.

How many exchanges is it on?

Once I get the coin supply out of the way and I'm comfortable with its level of growth, I look to see how many exchanges it is listed on. I tend to avoid coins that are only listed on one or two exchanges. The ideal coin will be listed on at least 3 decent HIGH volume exchanges.

If it's only listed on 1 exchange and gets delisted you're now stuck with a shitcoin you cant sell.

If it's listed on several exchanges a delisting can be devastating but you'll still live to fight another day and you don't get stuck holding a bag of shitcoin with nowhere to sell it.

Trade Volume Is Important!

I also look at trade volume on the exchanges. Don't jump in if people aren't trading the coin. I tend to stay away from projects that don't have at least a six figure daily trade volume. I stay away from projects with really low trade volume. The only exception to this rule is if it's a brand new project that may have flown under the radar and is just getting started! Sometimes these plays work out, other times they don't. Make sure you're wins out perform your losses when entering new projects! Early entry can often find a 10 cent coin that moons to 10 dollars. Don't count on that happening all the time, but it does happen occasionally and it's absolutely wonderful when it does!

Start A List

Once I'm happy with the coin supply, the exchanges it's listed on and the trade volume it's recieving, I then add it to a list of prospects. Included in the list is the coin name, the ticker symbol, and website address of the coin.

Almost all the info you need should be on the marketcap site you're using.

Time To See What This Coin Does?

The first question I ask myself is, "What does it do and how well does it do it?" Go to the website and see what the coin is all about. What is its usecase? If I don't like the usecase, I generally wont jump in.

Does the coin have a lot of competitors doing the same thing? If so does this coin do it better? Can it compete? If I like the answers to those questions I'll put a star next to it on my list.

Currently we have a coin for everything! I'm not even going to lie. If the coin has a completely retarded usecase but it looks like a lot of "dumb" money is entering the trade I'll put a question mark next to it instead of a star! This is why you DYOR (do your own research). DUMB MONEY OFTEN PUMPS REALLY STUPID PROJECTS. If you don't have an ethical issue jumping into a project you know probably wont survive but like the rest of your technicals you may consider buying for a short term trade. Set a target price and when it hits, get out! If you can't set a target or don't see growth potential, don't even add it to the list. Move on to the next coin. We're looking for long term hodls with potential 10x returns!

Time To See If There's Community

We've covered the basics of the technicals I look for. Now lets take a look at some fundamentals. First things first, is there community? Look at the social media accounts. How many people are following? Is the dev actively giving updates? Is the community happy? Can you find any FUD or unhappy investors? If so what are their gripes?

I try to gauge the level of happiness in the community. I like to see enthusiastic and happy followers that believe in the project. Checking social media sites like telegram, twitter, reddit, facebook and the like, can really tell a huge story. If I find a ton of FUD and unhappy community I tend to walk away. DON'T ENTER A SHITSHOW! Move on!

Time To Make A Choice

Now that I've covered some of the basic technicals and looked into the community fundamentals I'll decide on buying a position. I always start small and DCA in (dollar cost average) a little at a time. I'll add to my position on the way up, and possibly increase my position on the way down depending on my confidence level. (Cutting out the losers is a post for another day) Obviously if the bottom falls out you need to look into why. You can usually find some clues in social media. Then make a choice to stay in while buying more and averaging down or get out and cut your losses. (a future article for sure)

Other Things I Look Into As I Grow The Position

Find the wallet rich list. These are the top wallets on the block explorer for the coin you're researching "The Rich List". See if only one or two people own the majority of the circulating supply. If so, stay away.

See if you can research the history of the dev team. Are they ethical? Have they rug pulled projects? Can you find any crypto scams they participated in? Do they have a history of exit scams?

Stay On Top Of The Investment

At this point I'll buy in slowly a little at a time. I'll follow the social media accounts waiting for news or FUD that will dictate whether I add to the position or scale it down. I'll check out the wallet and make sure it works properly. You'd be surprised how many projects have crappy wallets that barely function. If you discover a shit wallet, get out! Chances are the exchanges aren't going to put up with that shit wallet for long and will delist it.

These Are The Basics

This covers the basics for the most part. Obviously the more research I do the more comfortable I become. Once you start holding really large trading positions, you start sleeping less and less. Anything I can do to insure I sleeep better at night, I DO! The more confident I can become with a project the stronger hands I'll have when the market turns. If things feel like they're going south and I'm in profit, I try not to hesitate to get out! I never get mad at myself for taking gains. Although it sucks leaving money on the table, it's worse getting stuck with a shit position because you were too stubborn or attached to exit the project.

And that is how The Dood goes shopping for shitcoins!