Many short-term traders make their decisions solely on technical analysis and price charts, regardless of which markets they are trading. It's typical for traders to completely disregard news events in favour of price patterns, support and resistance levels, and other technical indicator indications.
But in today's trading environment, news analysis is just as crucial as technical analysis. The markets can be greatly impacted by news releases about earnings reports, partnerships, project teams accomplishing milestones, and changes in interest rates and inflation.
Trading on news releases can prove vastly beneficial to traders and can significantly strengthen their trading strategy by adding economic announcements to their purely technical and charting approach. Learn how to trade the news and spot potential trading opportunities within the financial markets.
Regardless of your trading strategy, learning to trade the news is an essential skill for astute trading management and long-term performance.
In this article, we are going to detail all the things you need to know about trading the news in the crypto industry.
How to Trade the News
To understand how the market processes multiple signals that are relevant for determining the value of a coin/token, you need to understand news strength and its attentional attraction.
News can be broadly classified into two categories (i.e macro and micro news). To become a successful trader you need to understand them and how they impact the market.
Macro news: Macro news also known as macroeconomic news affects broad economic activities. Such news includes interest and inflation rates, a war between countries, central bank interest rates, job market statistics, etc.
Micro news: These are news that are firm-specific for example, a partnership, the project team reached a milestone etc.
How to Trade the Macro News
Typically, cryptocurrency traders would buy assets when newly disclosed data indicates macroeconomic strength and sell them when it indicates weakness.
Although it could seem easy, it involves patience and knowledge of economic data, thus it is more complex than it might seem.
How to Trade the Micro News
Trading firm-specific news is one of the most efficient crypto trading strategies. Traders adopt a systematic approach called "Buy the rumour, sell the news". What does it mean?
Buy the rumour, and sell the news is a trading strategy where a trader buys an asset based on speculation about an upcoming announcement, and then sells the asset once the news is made public. This could allow the trader to buy the security before everyone wants to buy it, and turn a profit by selling it when the demand and the price increase.
How do I Track News Releases
Finding relevant content used to be easy because there was such a small pool of content available on cryptocurrency. But as the industry expands, it has been harder and harder to acquire reliable information.
To get access to unbiased information and news here are some important links;
We also have a dedicated news channel (VIBRANews) on our Social platform in-app and most of our users share firm-specific news on the platform. Download the VIBRA to get exclusive crypto news