- In traditional markets, the news is the most important when making a trade.
- In crypto, the news cycle is much faster than in traditional trades.
- News requires a special kind of skill to nail it and use it in trades.
When you’re new to trading cryptocurrencies, it’s easy to get caught up in the FOMO (fear of missing out). You see a coin on CoinMarketCap that’s pumping and you want to get in on the action. But before you start buying, it’s important to remember that trading crypto is more complicated than just following the news.
In traditional markets, the news is one of the most important factors to consider when making a trade. But in crypto, the news cycle is much faster, and often times the market has already priced in the news by the time it hits the presses.
This was certainly the case with Bitcoin’s price pump in late 2017. By the time mainstream media started covering the story, the market had already made its move and prices were beginning to correct. This means that every trader is should get a firm understanding of technical analysis and charting before going ahead and trying to trade on news.
While news can provide excellent trading opportunities, it requires a special kind of skill to nail it. So, if you’re a new trader, it’s best to stay away from trades that are in response to news and focus on learning how to read the markets. The best way to do this is to practice on a demo account or with small amounts of real money until you’re confident in your ability to read the markets. Only then should you start trading with larger amounts.
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