Last Updated on Apr 17, 2020 by James W
The jury may be out on whether or not bitcoin is going to boom again in the near future but one thing that came out of 2017’s price surge was a renewed interest in investing. With casual observers spotting an opportunity to make some money, anyone with an internet connection started to look into the world of trading. Today, unlike before, investing in a commodity, tangible or otherwise, is easier than ever. Even though trading cryptocurrencies is slightly different from more traditional commodities like gold, oil and forex, the premise is still the same: buy low, sell high.
However, as anyone that’s dabbled in the markets before will now, getting from point A (low) to point B (high) is easier than it sounds. Even though the internet has given people more access to financial markets and more, that doesn’t mean you can make money without any effort. Indeed, to make full use of the tools available, you need to develop a solid investment strategy that combines a variety of strategies. Perhaps the most important thing you need to do when you’re sizing up an opportunity is what’s happening in the world around it.
Know the News
If you’re looking at bitcoin, you need to stay on top of the latest trends. To do this, you need to read the headlines on dedicated news sites in the same way you would if you were interested in sports. For example, you’d never know that Indonesia was now going to treat cryptocurrencies as commodities if you didn’t read about it on Coinlist. Similarly, without keeping abreast of the latest stories coming out of the industry, you wouldn’t be aware of Ripple’s quest for more business partners in Asia. Basically, without keeping your finger on the pulse of what’s going on in the crypto industry, you’ll never know when bitcoin’s price is about to rise or fall.
Away from the headlines, an appreciation of the stats is also important. Because news stories can have a certain bias or focus, you need to infuse them with hard data in order to come up with a rational overview of the market. The obvious place to start is the price charts for the commodity you’re interested in. Let’s say you’re considering a move into the world of currency trading (forex). The first thing you’ll need to know is the daily prices. Indeed, you can’t hope to buy at the right price if you don’t know your starting point. Even if you’re not a member of an online trading platform, you can use a site like XE.com to check that day’s prices.
Data Will Drive Your Investments
Once you’ve established a starting point, you can then review the historical data to see whether the daily price is above or below what it was the previous month and so on. Beyond the obvious stats, another measuring stick for the potential of a commodity is Google. Reading through a recent bitcoin story in The Express, Google analytics firm DataTrek Research was cited as a marker for the commodity’s potential growth rate. By tracking the number of search queries for a specific product, you can get a flavor for how popular it is. Even an amateur investor will know that the price of anything is always dependent on how popular it is.
If you can use raw data to spot a trend, you’re more likely to be ahead of the curve and make a solid investment. Indeed, if you can do this, immerse yourself in the latest industry news and make use of how easy it is to invest online, the world could be your oyster. Sure, investing in anything is never a sure-fire way to make money. However, with some forethought and careful planning, it’s possible and that’s what matters if you’re looking to make money online.
