An Easy Crypto Trading Strategy
Buy the Rumor – Sell the News
This principle is fairly straightforward, but you have to know it: Each time there is some major news about a coin, it is followed by a breakout. If it’s good news, price pumps up, if it’s bad news, price will likely show a move downward.
When there are news items which let the price run upward, professional traders are prepared to sell quickly, somewhere on high levels. They know that a news pump is usually quickly followed by a reversal and they will be able to buy back lower.
On the other hand, if price crashes down because of any rumor, professional traders buy through the panic of the crowd, so they intentionally buy the lows of a panic crash.
Such news could be:
- A step further in the development of a crypto project
- An altcoin getting listed on a major exchange / broker platform
- Big companies showing interest in a crypto project
- Support for a certain beneficial system (like SegWit / Lightning Network in case of Bitcoin and Litecoin)
To know such news of course means that you have to get them as soon as they are published or at least soon enough to react accordingly in time.
How To Stay Up To Date With Cryptocurrency Projects
It’s hard to always be up to date at dozens of projects. But what you could do is to specialize in few. Let’s say you pic up to 5 coins, and look for the places online where their news usually get announced. This can be different channels, such as Twitter (check hashtags, project accounts), forums (altcoins have their own subforums/category within major forums like reddit, bitcointalk, bitcoingaden) and the news section on the project’s website. So either you get news feeds or just check your bookmarked pages on adaily base.
That way you may even get kind of a specialist for those projects and you can anytime shine with your knowledge – after having made some great trades because of the news you use.. 😉
Don’t Miss The Train – Sell Early Enough
Be aware that this strategy is also used by other professional traders. So in the moment when everybody has got the news and they are generally known it’s the latest moment to sell. The peak in price action is usually earlier than you’d think and the other traders dump their coins as soon as it makes sense to them and they’ve got enough profit out of the trade.