Fundamental analysis: Increase in prices
Speculating on a price increase can often be achieved using news reports. The bitcoin rate is influenced by important and global news stories. Less important articles will have minimal affect on the bitcoin value.
The following extract is about one of the largest banks in Britain that accepts bitcoins.
Figure 1: Investing in bitcoins – Positive news article.
This extract puts bitcoin in a good light. The chance that the demand for bitcoins will increase has risen. An increase in demand can mean that the value of a bitcoin will also rise. The figure bellows shows and example of a rising bitcoin rate.
For this example, we used the stop loss and profit call functions. With a stop loss, you can specify the maximum amount you want to lose if, perhaps, the price doesn’t end up increasing. Because it can happen that you speculate that it will increase but it doesn’t actually happen. The profit call allows you to set a return that would make you happy. Imagine you open a position worth £40, you would be happy with a win of £10. This is a 25% return. You would then set the profit call to 25%.
We chose a 30% profit call. In our case, the position did reach a 30% profit so our position automatically closed and we secured this win!
Figure 2: Investing in bitcoins – bitcoin price increasing.
This is not the only technique that you can use to trade online. Furthermore, this technique does not guarantee that you will be successful at trading.