HYIP Technical Analysis Theories

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/limited partner (they do have a business structure right?), 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 simple scam? Avoid it and move on right? Not necessarily. It is well known that the vast majority of public HYIPs are scams. 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, templates, hosting, and owners. 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.

It is important to note that no formal research has been done for this article. While there is at least one site providing HYIP timing information (www.hyiptiming.com), it is not a widely practiced concept. It requires significant effort to develop successful analysis methods. However, this effort does not come without its rewards.

Dan DeFelippi, CEO The Perfect Apex Group Inc.