All right jokes aside with the click baity title, I sort off wanted to start this piece and make a point right of the get go. Now that I have your attention, lets drive that point home
Media and generally anyone relying on web traffic to make a sustainable income, will tend to gravitate towards the drama and excitement that news brings. Afterall, the more engagement they get and the longer they have eyes on pages the more money they make.
Now correct me if I’m wrong, but doesn’t that mean that news isn’t in your best interest? Rather that sensationalism and dramatic stories seem to make headlines so much more often? My point is news isn’t designed to inform anymore, its designed to get as much bang for their buck as possible. Even at the cost of reputation ever so often.
How this effects the market
Funny thing here, it really doesn’t, not as directly as the media would like to claim. BTC _apparently_ just made 18 month highs recently with all the crypto talk in the space, only to quite literally turn around 2 weeks later and say it crashed because Libra was being questioned by the senate. Dont believe me?
I mean common, use some common sense. So what should you know about news and the market?
Well that is a much more dynamic in that news can be a catalyst, but very rarely a driving force. What I mean is, news can set off a price movement in the direction the market was already intending to go. The reverse is also true in that news can cause a wick where there’s a sudden surge of volume only to correct a few minutes later as investors remains bullish/bearish.
Retail traders really have very little effect on market price contrary to popular belief when dealing with assets like BTC and ETH. Smaller cap alts are exempt ofcourse as they simply carry much less liquidity.
Even in Forex where trading “news” is a strategy, you would see all to often it remains a coin flip. News can be very bearish only for price to surge or vice versa.
So what should you do?
Nothing, to be frank. If you trade using your framework with take profit and stop loss targets set, and you’re consistently able to read trend and play the market, you’ll be fine! Sure some news events may stop you out, but its really an outlier that causes short noisy volatile spikes. Looking back at a chart I’m sure its very hard to point to any specific candle and go “that was news”. Try it, you’ll notice trend was already place. news just catalyzed price to move more violently for 5 minutes and trend continued as was always intend.
So stop worrying, trade the markets and avoid trading news, rumours or announcements. There are many more profitable strategies that will consistently allow you to win without the guess work.