Contrary Point Of Bitcoin Trading - Does Bitcoin News Trading Work?
Bitcoin news trading speculates on how the market will answer the announcement of major news stories or the discharge of market data. This is because there'll be rumors about what the particular numbers to be released are going to be like. Traders will then place an edge supported by how they feel the market will respond if these rumors are true.
The bitcoin marketplace is open for trading 24 hours each day. With bitcoin news trading, a trader is essentially trying to take a position on the impact of the news announcement. There's no doubt that major news announcements can have a profound impact on the bitcoin marketplace. This is often why most bitcoin traders will attempt to maximize the discharge of major news announcements.
The contrary point of bitcoin trading is that the majority of investors already follow this strategy. Since many traders are investing based on the news, the market is quick to respond to the announcements' change. This quick change within the market limits the power for traders to take advantage of the news announcements. For this reason, many of us don't think bitcoin news trading may be a plausible strategy.
Unlike other trading strategies, bitcoin news trading doesn't require any technical analysis of the market. Since most news announcements happen very rarely, there's no technical analysis model which will be ready to account for the introduction of the news. This enables a trader to use objective reasoning to work out the way to place their trades immediately before and immediately after the major news announcement.
Most news announcements have a brief-term impact on the bitcoin marketplace. Only a few news announcements will have an extended-term impact on the market. With the new announcement having such a brief-term impact, traders will look to move in and out of positions quickly. The impact of the news could also be felt for less than each day or sometimes less. You are doing not want to possess an extended-term position if you trading supported news.
A good strategy to follow when bitcoin news trading is to put two orders on both ends of the present market value. If the market moves up, you'll keep the order that profits from the move and cancel the opposite order below the present market value. This enables you to profit no matter whether the market rises or declines. Building a profitable bitcoin trading strategy is often boiled right down to two key factors - knowledge and testing.
CBW - External Analyst