This sharing is meant for trader and not investor. So take this with you if it applies to you else simply ignore this thread.
My criteria for identifying trading opportunities are as follow:
The crypto has move up in pricing previously breaking new highs (fundamental of the crypto is not my concern as I am a trader, I only trade for profits or take my losses)
The crypto has pulled back and drop in pricing
Bottom out scenario has occured ( refer to diagram below whereby I enter my trade on the 15th)
Cutloss of 30% strict rule must be enforced, holding period of max 30 days.
Trailing stop loss applies (this depends upon your exposure level and this is a subjective moving target.)
Personally I prefer to to trade on crypto on big exchanges (though lesser known or china exchanges gives much profit potential) due to liquidity concerns. I usually enter a min trade size of $20k and this amount is enough to cause big price movement for low liquidity exchanges and crypto.
In the above case, I enter my position on the 15th Dec after seeing signs that the drop has bottom out. Refer to 12th-13th Dec whereby price is appreciating as a guide. The candle on the 8th Dec is important as the daily low for this particular candle cannot be breach in order for this trade to stand. 12th - 13th Dec shows proof that the candle low on the 8th Dec has not been broken. Thus I decided to enter my trade at the closing candle price of the 8th Dec.
I tend not to chase winners unless price break out occurs. Usually this means that a price movement of at least 30% for 2-3consecutive days. I noticed that usually price will go even higher due to market anticipation of positive news.
Note: You can treat this as nonsense if this does not helps you in anyway. I will be glad if the above sharing helps you.