This article addresses the idea of applying technical analysis to HYIPs.
Applying such analysis requires extensive research into past programs
and significant programming. The purpose of this article is to present
the concept and not the actual methods.
In the HYIP arena, the term “due diligence” is
thrown around a lot. It is understood that research into a program must
be done before investing. Ideally this would involve talking with the
CEO, seeing screenshots of trading accounts, and other proof of actual investment
holdings. What if this information is not available? What if the site
appears to be a pyramid scheme? Avoid it and move on right? Not
necessarily. It is well known that the vast majority of public HYIPs are
pyramids and will turn to scam sooner or later. You can still make money
investing in scams, so long as you time your investment correctly.
This can be done through fundamental and technical analysis.
In the stock market, fundamental analysis refers to
researching a company’s business plan, earnings reports, press releases,
etc. After analyzing this information an investor comes to the
conclusion that the company should see increasing or decreasing stock
prices and trades accordingly. Since this information isn’t generally
available for HYIPs, fundamental analysis is a bit different. This
includes due diligence, researching domain and hosting information,
reading reviews on HYIP listing sites such as HYIP-Navigator, and
support provided by the HYIP itself. While fundamental analysis is an
important step in the process of HYIP research, it doesn’t provide the
whole picture. Domains can be registered anonymously, reviews can be
faked, and site admins can make up information. Where do you go from
here? Technical analysis.
Technical analysis refers to numbers and mathematics.
By tracking past performance technical analysts hope to predict the
future of an investment. There are volumes about applying technical
analysis to stocks. So how do you apply it to HYIPs? A HYIP is a very
different investment vehicle than a stock. Stock prices rise and fall
and such price fluctuation is tracked on a stock market. The key is to
“buy low, sell high”. The key to HYIPs is to
“invest early, stay late”.
You must time your investment early enough so that you generate a
reasonable profit before the program collapses.
To apply technical analysis to HYIPs requires past
performance tracking. How can you track a program that just opened?
Simply, you can’t. You must compare it to other similar programs,
otherwise you will be comparing different things and your results will
not be accurate. The more programs it is compared to the better. So what
should be compared? Previous program lifetimes, site scripts,
design, hosting and plans. For example: If the average lifetime of
similar previous programs is shorter than required to make a profit your
risk will be very high. If every program running a certain script or
hosted with a certain provider turned out to be a scam, the probability
of the new program being a scam is extremely high. Incorporating these
factors can be used to generate a risk level chart. Remember, the goal
is to find the key point to invest in a program. You want to calculate
Risk VS Time, and invest at the time where risk is lowest.
This is called “trend analysis.” The current program
is compared to previous trends to determine the optimal investment time.
An important thing to consider is that trends frequently change. The
trend for one period may not be the same as another. HYIPs in 2003 may
have been run differently than HYIPs in 2004. Another thing that must be
considered is that many scams are run by the same people. They know
what puts the most money in their pockets. They frequently follow the
same format, such as using the same script, offering similar returns,
etc. This provides very good trending data. So long as you follow the
correct period, trends should allow some excellent timing data.
This type of research is not a widely practiced concept.
It requires significant effort to develop successful
analysis methods. However, this effort does not come without its
Dan DeFelippi, CEO The Perfect Apex Group Inc.